KALINGA TUBES LIMITED Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE petitioner is a public limited company having its registered office and factory at Chowdwar in the district of Cuttack. THE petitioner used to manufacture and sell and is still manufacturing and selling G. I, pipes of different sizes.

(2.) THE assessment year in question is from April 1, 1959, to March 31, 1960, and the accounting year is from April 1, 1958, to March 31, 1959.

(3.) THE word "ex gratia" means "act of grace". As "bonus" had not been statutorily prescribed, the management was of opinion that the payment was not compulsory under any statute and as it was paid to keep the workers contented, the payment of bonus was an "act of grace". Thus, the entry in the books of account showing the payment as "ex gratia" does not negative its character being bonus as it was stated in the order issued by the managing director on January 1, 1959.