Appeal No 855 of 1968
Appeal by Special Leave from the Award dated October 26 1967 of the National Industrial Tribunal Calcutta in Reference No NIT 3 of 1967
D N Mukherjee for the appellant
P section Khera and section K Nandy for respondents Nos 1 and 3
The Judgment of the Court was delivered by Vaidialingam J
This appeal by special leave is directed against the Award dated October 26 1967 of the National In dustrial Tribunal Calcutta in Reference No NIT 3 of 1967 holding that for the accounting year 1965 66 the quantum of bonus payable by the appellant to its workmen is 20 of the effective salaries or wages with a further direction to set on a sum of Rs 146252
The appellant Indian Cable Company Ltd hereinafter to be referred as the Company occupies a very prominent position in the Cable Industry of India having its Head Office at Calcutta and its factory at Jamshedpur
It has branches in Bombay Madras New Delhi Kanpur Ahmedabad and Bangalore
In addition to insulated cables the Company manufactures Aluminium Rods Radio Aerials Fuse Wires and other products
Its paid up capital is Rs 24865450
It employed workmen numberingover 5000
The gross effective salaries and wages of its employees for the relevant accounting year amounts to Rs 10532880
Its accounting year is from 1st April to 31st March of the succeeding year
For the accounting year 1964 65 the Company declared and paid bonus at 20 to all employes in accordance with the provisions of the hereinafter to be referred as the Act
For the year in question 1965 66 it calculated a sum of Rs 2368785 as available surplus
This amount was arrived at by the Company after calculating direct tax without deducting the provision for payment of bonus payable to its workmen
A sum of Rs 1421271 being 60 of the said available surplus was declared as bonus for the year 1965 66
This amount represented 13 51 of the wage bill
The workmen were dissatisfied with this offer of bonus at 1351 and demanded payment of bonus at the maximum rate of 20 as provided in the Act
In consequence they raised a dispute with the Company
In view of the agreement dated November 24 1966 between the parties to refer the claim for additional bonus for adjudication to a Tribunal the workmen received the bonus at 108 the rate of 1351 offered by the Company
The Central Government by order dated June 23 1967 referred for adjudication to the National Industrial Tribunal Calcutta the following dispute What should be the quantum of bonus payable to the Workmen of the Indian Cable Company Limited Calcutta for the accounting year 1965 66 The Unions contended before the Tribunal that the computa tion of allocable surplus by the Company has not been properly made in accordance with the Act and that several items shown in the profit and loss account as expenditure have to be added back to arrive at the actual gross profits
The Unions further alleged that the Company has spent large amounts for payment of liability for future years with a view to reduce the available and allocable surplus which in consequence has resulted in the reduction of percentage of bonus
The Company on the other hand maintained that it has kept proper accounts which have been audited by a reputed firm of auditors Messrs Lovelock  Lewes and that the computation of allocable surplus has been properly arrived at having due regard to the provisions of the Act
The Com pany denied the allegations of the Unions that enormous expenditure has been shown with a view to reduce the quantum of bonus
On the other hand the Company pleaded that all items of expenditure were justified and those items are deductable in considering the claim for bonus
At this stage it may be mentioned that the Unions served interrogatories requiring information on various matters and there is no controversy that the Company furnished all the informations that were Called for
Before the Tribunal the Company required various deductions to be made from the net profits shown in its profit and loss account
On the other hand the Unions required various items to be added back
The Tribunal accepted the contentions of both the parties with regard to certain items
We will in due course refer to the items which are in dispute before us at the instance of both the Company and the Unions
The Tribunal computed the available surplus at Rs 3754713 60 of this amount being Rs 2252828 was fixed as allocable surplus
The Tribunal held that a sum of Rs 2106576 being bonus at 20 of the gross effective salaries and wages was payable for the year in question and it directed the surplus amount of Rs 146252 to be set on
As the bonus at the rate of 1351 had already been declared and paid by the Company the Tribunal directed the payment of the balance 649 within the period mentioned 109 in the Award
One aspect which has to be acted is that in calculating the available surplus the Tribunal before calculating the notional direct tax deducted the bonus payable for the accounting year in question
The grievance of the Company as placed before us by its learned counsel Mr D N Mukherjee relates to three items 1 the method of computation of notional direct tax 2 disallowance of the deduction from gross profits of the sum of Rs 265 lakhs made as ex gratia payment for the accounting year 1964 65 to employees drawing emoluments exceeding Rs 750 per mensem and 3 disallowance of the claim for re turn on provision for doubtful debts
The first contention relates to the principle to be adopted for calculating direct tax when computing the available and allocable surplus for payment of bonus under the Act
According to the Tribunal under sections 6 and 7 of the Act the bonus payable for the relevant accounting year has to be deducted from the grossprofits for calculation of direct tax or alternatively rebate for bonus found payable has to be calculated and 60 of the rebate has to be added back as allocable surplus
The Tribunal took notice of the fact that the Income tax Authorities did not object to deduction of the provision made by the Company for payment of bonus for the accounting year 1965 66
On this reasoning the Tribunal added back to the gross profits as per the profit and loss account the provision made for payment of bonus
For coming to this view the Tribunal followed its previous decision in Indian Oxygen Ltd vs Their Workmen NIT 1 of 1966
The Tribunal has also noted that its Award in the Indian Oxygen Ltd was pending appeal in this Court
According to Mr D N Mukherjee this method of calculation of direct tax under the Act adopted by the Tribunal is contrary to the decisions of this Court
We are in entire agreement with this contention of Mr Mukherjee
In view of the decisions of this Court to which we will immediately refer Mr P section Khera learned counsel for the Unions was unable to support the reasoning of the Tribunal on this aspect
The question of calculation of direct tax under the Act was considered for the first time by this Court in Metal Box Co of India Ltd vs Their Workmen1 It was held therein that the nationalc tax liability is to be worked out by first working out the gross profits and deducting therefrom the prior charges under section 6 but not the bonus payable to the employees
Therefore it is clear from this decision that an employer is entitled to deduct 1  110 his tax liability without deducting first the amount of bonus he would be liable to pay from and out of the amount computed under sections 4 and 6 of the Act
The same principle has been reiterated in The Workmen of William Jacks and Company Ltd Madras vs Management of William Jacks and Co Madras1 Delhi Cloth and General Mills Co Ltd vs Workmen2 and Indian Oxygen Ltd etc
vs Their Workmen
3 In fact the last decision overruled the decision of the National Industrial Tribunal in Reference No NIT 1 of 1966 which has been followed by the present Tribunal
We may also state that after the first decision of this Court referred to above the Act was amended in 1969
The last three decisions of this Court considered the question whether the amendments effected to the Act had made  any change in the principle laid down by this Court in the first decision
It was uniformly held in all the three decisions that the amendment has not effected any change in the principle laid down in the earliest decision that the tax liability under the Act is to be worked out first by working out the gross profits and deducting therefrom bonus payable to the employees
Therefore it follows that the Tribunal committed an error in law in corrupting direct tax after deducting bonus
Therefore this point will have to be held in favour of the appellant
The second item relates to the disallowance of Rs 265 lakhs which represented the ex gratia payment made by the Company to certain employees drawing emoluments exceeding Rs 750 per mensem for the year 1964 65
The Company claimed that this amount should be deducted from the gross profits whereas the Unions contended that the same has to be added back to the gross profits shown in the profit and loss account
The factual position relating to this claim is as follows From the letter dated February 4 1966 Ext 1 written by the Company to one of its officers Mr section N Banerjee it is seen that the Company in appreciation of the officer s services during the year 1964 65 made an ex gratia payment of Rs 90
Mr Banerjee has given evidence on behalf of the Unions
He has deposed to the fact that he was drawing about Rs 1000 per mensem and that he received the letter Ext
I as well as the sum of Rs 90 mentioned therein
He has further stated that over and above this sum of Rs 90 he has also received the bonus payable to him under the Act for the year 1964 65
He has also deposed to the effect that the ex gratia payment of Rs 90 was paid to him in lieu of bonus calculated on the difference in emoluments drawn by him and the ceiling of Rs 750 per mensem fixed by the Act
It was 1  2  3  111 the practice of the Company to pay bonus to all the members of its staff without application of any ceiling
In view of the fact that a ceiling had been fixed under the Act to make up for the lesser amount that the employees like Mr Banerjee will get under the Act this amount of Rs 265 lakhs was paid to all such officers
The Tribunal accepted the evidence of Mr Banerjee that the ex gratia amount was paid to keep up the old practice of the Company of paying all the members of the staff without the application of any ceiling
The Tribunal held that such a payment was not an item which could be deducted from the gross profits under the Act as claimed by the management
Accordingly it added back the sum of Rs 265 lakhs to the gross profits shown in the profit and loss account
Mr Mukherjee urged that the Company was justified in claiming the above amount by way of deduction
He referred us to the definition of employee in section 213 of the Act as also to the employees declared eligible for bonus under section 8
He also relied on sections 10 and 11 which make it obligatory on an employer to pay the minimum bonus and also the maximum bonus upto 20 respectively
We are not inclined to agree with the contention of Mr Mukherjee that the Tribunal committed an error when it added back the sum of Rs 265 lakhs
From the evidence of Mr Banerjee which has been accepted by the Tribunal read along with the letter Ext
1 it is clear that Mr Banerjee received not only bonus due to him under the Act but also the extra amount of Rs 90
Mr Banerjee was admittedly drawing a salary of Rs 1000 per mensem
For a person to be an employee under section 213 among other things he is a person drawing a salary or wage not exceeding Rs 1600 per mensem
Under section 8 it is provided that every employee is entitled to be paid in an accounting year bonus as per the Act provided he has worked in the establishment for not less than thirty working days in that year
Section 10 provides for payment of minimum bonus to every employee
Similarly section 11 provides for payment of bonus to every employee subject to a maximum of 20 of his salary or wage
According to Mr Mukherjee there is no prohibition in the Act from paying bonus to officers like Mr Banerjee upto a maximum of 20
Therefore when the payment as in Ext
1 has been made to officers like Mr Banerjee and others such amounts have to be computed as an item of expenditure under the Second Schedule of the Act
It is no doubt true that an officer drawing a salary not exceeding Rs 1600 per mensem is an employee under section 213 and he will also be eligible for payment of bonus under section 8 read with sections 10 and 11 of the Act
But the point that is missed by the learned counsel is the limitation 112 contained in section 12
Though officers drawing salary upto Rs 1600 per mensem are employees under section 2 13 and eligible for bonus still for purposes of calculation of bonus payable under sections 10 and 11 such officers whose salary exceeds Rs 750 per mensem for calculating bonus the salary or wages per month will be taken at the maximum of Rs 750 per mensem
That is if an officer is getting Rs 1500 per mensem
he will be eligible for onus nevertheless for calculating bonus payable to him he will be treated as drawing a salary of only Rs 750 per mensem
Therefore Mr Banerjee in the case before
 us has admittedly to be paid bonus which is due to him under the Act for the year 1964 65 on the basis that his salary is only Rs 750 per mensem
What the Company has done was to pay him not only the bonus as calculated under the Act but also an additional amount
Such additional amount paid to all such officers totalling Rs 265 lakhs cannot be considered to be an expenditure debited directly to Reserves
The Tribunal was justified in adding back this amount to the gross profits
The third item relates to return on provision for doubtful debts
The Company had calculated return of Share capital and Reserves
It further claimed a return at 6 on Rs 25 lakhs which according to it was a revision for doubtful debts
The amount claimed as return under this head was Rs 15000 and the Company claimed to deduct this amount from the gross profits as an item of expenditure
The Tribunal has rejected this claim of the Company
It is not necessary for us to dwell on this point at any great length in view of the decision of this Court in Indian Oxygen Ltd etc
vs Their Workmen1 where the decision of the Tribunal directing such an amount to be added back in computing the gross profits has been approved
The legal position has been dealt with in the said _judgment
Accordingly we hold that the Tribunal was justified in adding back the said amount to gross profits
Mr P section Khera learned counsel for the Unions has contended that the Tribunal was not justified in allowing deduction of certain items from the gross profits for purposes of computing the available and allocable surplus
The Unions no doubt have not filed any appeal
In fact in the particular circumstances of this case the could not have filed an appeal because they have been awarded the maximum 20 allowable under the Act
But according to Mr Khera if the items on which he has relied on had been added back the Award of the Tribunal can be maintained even on the basis that the principle adopted by the Tribunal in respect of direct tax is found to be erroneous by this Court
1  113 The right of parties like the respondents before us even in labour adjudication to support the decision of the Tribunal on grounds which were not accepted by the Tribunal or on other grounds which may not have been taken note of by the Tribunal has been recognised by this Court in Management of Northern Railway Co operative Society Ltd vs Industrial Tribunal Rajasthan etc
  In fact this decision had to deal with an appeal filed a Co operative Society against the Award of the Tribunal setting aside the order passed by the Society removing from its service an employee
This Court permitted the Union concerned which was respondent in the appeal to support the Award of the Tribunal directing reinstatement of the employee on grounds which had not been accepted by the Tribunal and also on ground which had not been taken notice of by the Tribunal
Similarly in J K Synthetics Limited vs J K Synthetics Mazdoor Union1 this Court permitted the Union which was the respondent in the appeal to support the decision of the Industrial Tribunal on a method of computation regarding bonus which was not adopted by the Tribunal
Though the management appellant therein challenged the right of the Union to support the award on other grounds without filing an appeal that contention was rejected by this Court as follows  On behalf of the management the right of the union to challenge the multiplier and divisor in the absence of an appeal by it is strenuously contested but in our view there is little force in this objection
The appeal by the employer is against the grant of bonus to the employees which implies that the method of computation of the gross profits as well as of the available surplus and the rate at which the bonus is granted can subjected to scrutiny
It is needless to recount the several priorities that have to be deducted and the items in respect of which amounts have to be added before arriving at the available surplus
In an appeal the sevetat steps which have to be taken for computation of the available surplus either in respect of the actual amounts or the method adopted can be challenged
If so the union even where it has not appealed against the award can support it on a method of computation which may not have been adopted by the Tribunal but nonetheless is recognised by the Full Bench formula of this Court so longing in the final result the amount awarded is not exceeded
We are supported in this view by a decision of this Court in Management of Northern Railway Cooperative Society Ltd vs Industrial Tribunal Rajasthan 1  2 114 Jaipur and another1 where it was held that the respondents were entitled to support the decision of the Tribunal even on grounds which were not accepted by the Tribunal or on other grounds which may not have been taken notice of by the Tribunal while they were patent on the face of the record
 In the said decision this Court also found support for the above view in the decision of Ramanbhai Ashabhai Patel vs Dabhi Ajitkumar Fulsinji and others1 though the latter decision related to an election appeal
We will now deal with the items which according to  the Unions should not have been allowed to be deducted from the gross profits
The first item relates to a sum of Rs 1824047 paid by the Company to retired workmen at Jamshedpur Workshop under a Voluntary Retirement Scheme
This Scheme is exhibit G and it was framed on August 9 1965
The Scheme states that the Company has been suffering from an acute shortage of imported raw materials in view of the difficulty in getting foreign exchange and as such production could not be maintained for some considerable time
In view of these difficulties it is stated that the Company has found it necessary substantially to reduce the number of workers in the Workshop
The Scheme offered substantial benefits to workmen who choose to retire voluntarily namely ex gratia payment equal to retrenchment compensation under section 25 of the Industrial Disputes Act and gratuity admissible to the workmen
There is evidence on the side of the Company that about 450 workmen availed themselves of the Voluntary Retirement Scheme and a sum of Rs 1824047 was paid
This item has been included in the profit and loss account under the heading Salary Wages Bonus and Retirement gratuities
 The Company gave a break up of these items in answer to the interrogatories furnished to it by the workmen
The contention on behalf of the Unions is that under the Re tirement Gratuity Scheme which is in force a workman retires at the age of 60 and normally during the year 1965 66 the payment of gratuity to persons so retired would have come to Rs 121 lakhs
Therefore it was argued that the payment of Rs 1824 lakhs and odd paid as lumpsum under the Voluntary Retirement Scheme during the year 1965 66 was not proper as that amount would have in the ordinary course been spread over eight or ten years
The Tribunal has rejected this claim of the Unions and in our opinion quite rightly
If there had been a retrenchment and compensation had been paid to all these workmen the Unions cannot raise any objection in law to the payment of such amount
1  2 19651 SCR 712
115 If retrenchment had been restored the junior most men under the principle last come first go would have been sent out of service
On the other hand the Voluntary Retirement Scheme enabled the younger workmen to continue in service while it offered a temptation for the older employees to retire from service
The Voluntary Retirement Scheme has not been challenged as mala fides by the Unions
We are in agreement with the view of the Tribunal that the payment of compensation to induce the workmen to retire prematurely was an item of expenditure incurred by the Company on the ground of commercial expense in order to facilitate carrying on of the business and it was an expenditure allowable under section 371 of the Income tax Act
It was not an expenditure of a capital nature
The Tribunal was justified in declining to add back this item of expenditure to the gross profits
The second item which according to the Unions should have been added back is the sum of Rs 65764 which was claimed as extra shift allowance of plants and machinery added during the year
The consideration of this claim was postponed by the Income tax Officer on the ground that the Company had not furnished the requisite particulars
The Company claimed a sum of Rs 3610594 as depreciation allowable under section 321 of the Income tax Act
According to the Unions as the sum of Rs 65764 has not been accepted by the Income tax Officer the Company can claim depreciation only in the sum of Rs 3544830
The Tribunal did not accept this contention of the Unions on the ground that the amount of Rs 65764 has not been disallowed by the Income tax Officer
It is now stated in an affidavit filed in this Court on March 23 1972 by the Chief Financial Accountant of the Company that the Company has filed an appeal against the order of the Income tax Officer refusing to allow Rs 65764 as extra shift allowance for the year 1965 66
In our opinion the rejection of the Unions  contention in this regard by the Tribunal is justified
It is seen that the Company has produced figures for depreciation and that has not been subjected to any serious challenge by the Unions
Hence the objection regarding extra shift allowance has also to be rejected in view of the decision of this Court in Jabalpur Bijlighar Karamchari Panchayat vs The Jabalpur Electric Supply Co Ltd and another
1 The third item objected to by the Unions related to the ex penditure shown by the Company for repairs and renewals
According to the Unions the expenses shown are very heavy and large and that the Company was not justified in incurring the same
In our opinion this contention also has been properly rejected by the Tribunal
Apart from the fact that the Unions 1 AIR 1972 SC70 116 are not technically entitled to raise this objection as they have not pleaded the same in their statement of case filed before this Court this contention can be rejected even on merits
The Unions had furnished interrogatories requiring the Company to furnish certain particulars
Mr R N Gupta the Chief Financial Accountant of the Company filed an affidavit before the Tribunal giving answers to the interrogatories
He had categorically given details as to how the amount of Rs 1294 lakhs has been incurred as expenses for repairs and renewal
Mr Gupta had also given evidence about this matter
In cross examination he had stated that all the vouchers for repairs and renewal were scrutinised by the auditors and this evidence has been accepted by the Tribunal
Therefore the Tribunal was justified in rejecting this claim of the Unions
The last item relates to the claim made by the Unions that after distribution of bonus at 20 for the year 1964 65 there must have been a surplus and it
should have been set on for the next year namely 1965 66
This amount so set on should be taken into account for computing bonus for the year 1965 66
This assertion made on behalf of the Unions was controverted by the Company on the ground that there was no surplus left after paying the maximum 20 bonus for the accounting year 1964 65
In fact the evidence of Mr Gupta shows that apart from there not having been any surplus the Company Raid 20 bonus merely because they had already announced that they will pay the same
It is clear from his evidence that bon us at 20 could not have been declared for the year 1964 65 and in order to honour the declaration made by the Company bonus was paid at that percentage
This evidence of Mr Gupta has been in our opinion rightly accepted by the Tribunal
No evidence contra has been adduced by the Unions
Once the evidence of Mr Gupta is accepted it is clear that there was no surplus after paying bonus for 1964 65
Therefore the question of set on does not arise
This plea of the Unions also has to be rejected
From what is stated above it is seen that the only aspect in respect of which the Award of the Tribunal requires modification is in respect of the principle to be adopted for calculating direct tax
As we have accepted the contention of the Company in that regard it follows that recomputation of the available and allocable surplus will have to be made after making a calculation of direct tax without deducting bonus payable for the year 1965 66
In the original calculation filed by the Company it calculated tax only in the sum of Rs 9810893
It has later on corrected this figure by adding a sum of Rs 134 921 being surtax
Therefore the total direct tax will be Rs 9945814
Here again Mr 117 Gupta in his affidavit dated March 23 1972 has given the correct figures
Therefore the recomputation of the available surplus allocable surplus and the percentage of bonus for The accounting year 1965 66 on the basis of our judgment will be as follows Rs Rs Gross Profit as pier Award 21616195 of National Tribunal Less 1 Depreciation admissible under section 32 1 of IT Act 3610594 2 Development Rebate admissible 6762244286818 17329377 Less Direct Tax as Per cl 6 c including Di vidend Tax 9945814 7383563 Less Statutory Deductions Share Capital Rs 2486545021135634922387  8 5
Reserves Rs 4681377392808824  6 without tak ing into account 6  of Rs 250000 be ing provision for Doubtful debts Available Surplus 2461176 Allocable Surplus60 of above 1476706 Effective Gross salary 10532880 Bonus paid  1351 1422992 Balance 51 53714 1402 1476706 From the above it will be seen that the workmen will be entitled to bonus at 1402 of their total salary or wages and the amount will be Rs 1476706 and not Rs 20 as awarded by the Tribunal
From this it follows that the further direction in the Award of the Tribunal regarding set on cannot be accepted
Admittedly the Company has already declared and paid Rs 1422922 representing 1351 of the total wages or salary
Therefore the balance additional amount that the Company will have to pay by way of bonus to make up the 1402 as stated above is Rs 53714
This amount will be paid by the Company within a period not exceeding two months from today
The Award of the Industrial Tribunal is accordingly modified and the appeal allowed in part
Parties will bear their own costs
GC Appeal allowed in part


Summary:
The appellant company declared bonus for the year 1955 56 at 1351 The workmen demanded bonus at the rate of 20 the maximum provided in the Paymentof Bonus Act 1965
The dispute about the rate of bonus and calculation of the available surplus was referred to the Industrial Tribunal
The Tribunal held that a sum of Rs 2106576 being bonus at 20 of the gross effective salaries and wages was payable for the year in question and it directed the surplus amount of Rs 146252 to be set on As the bonus at the rate of 1351  had already been declared and paid by the Company the Tribunal directed the payment of the balance 649 within a prescribed period
In appeal to this Court against the Tribunal s award the appellant company contended  i that the Tribunal erred in holding that under sections 6 and 7 of the the bonus payable for the relevant accounting year has to be deducted from the gross profits for the calculation of direct tax ii that the Tribunal erred in refusing to deduct from the gross profits the ex gratia payment made to employees in respect of salary above the ceiling of Rs 750 fixed by the Act
iii that the Tribunal wrongly refused to deduct the reserve for doubtful debts from the gross profits
On behalf of the respondent workmen it was urged that the Tribunal was not justified in allowing deduction of certain items from the gross profits for purposes of computing the available and allocable surplus
HELD  i In the case of Metal Box Co it was held by this Court that the notional tax liability is to be worked out by first working out the gross profits and deducting therefrom the prior charges under section 6 but not the bonus payable to the employees
It is clear from the above decision that an employer is entitled to deduct his tax liability without deducting first the amount of bonus he would be liable to pay from and out of the amount computed under sections 4  6 of the Act
This principle has been upheld by the Court in later cases
This Court has also held that the amendment of the Act in 1969 has not effected any change in the earlier decision that the tax liability under the Act is to be workedout firstby working out the gross profits and deducting therefrom bonuspayableto the employees
It followed that the Tribunal committed anerror inlaw in computing direct tax after deducting bonus
109H 110D Metal Box Co of India Ltd vs Their Workmen 19691 SCR 750 The Workmen of William Jacks and Company Ltd Madras vs Management of William Jacks and Co Ltd Madras AIR 1971 SC 08SupCI72 106 1821 Delhi Cloth and General Mills Co Ltd vs Workmen  and Indian Oxygen Ltd etc
vs Their Workmen  applied
ii Though officers drawing salary upto Rs 1600 per mensem are employees under section 213 of the Act and eligible for bonus the salary or wages per month will be taken at the maximum of Rs 750 permensem
What the company had done was to pay such men not only the bonus as calculated under the Act but also in additional amount representing bonus on the emoluments above the ceiling of Rs 750 
Such additional amount paid to all such officers totalling Rs 25 lakhs could not be considered to be an expenditure debited directly to Reserves
The Tribunal was justified in adding back this amount to the gross profits
12A C iii In view of the decision of this Court in Indian Oxygen Ltd the Tribunal s decision adding back the deduction claimed by the appellant on account of return on the provision for doubtful debts must be upheld
112E F iv The respondents were entitled to support the decision of the Tribunal even on grounds which were not accepted by the Tribunal or on other grounds which may not have taken notice of by the Tribunal while they were patent on the face of the record
113A 114A B Management of Northern Railway Co operative Society Ltd vs Industrial Tribunal Rajasthan et   J K Synthetics Limited vs JK Synthetics Mazdoor Union and Ramanbhai Ashabhai Patel vs Dabhi Ajitkumar Fulsinji and others   followed
v The Voluntary Retirement Scheme had not been challenged as mala fide by the Unions
The payment of Compensation
to induce the workmen to retire prematurely was an item of expenditure incurred by the company on the ground of commercial expense in order to facilitate carying on of the business and it was an expenditure allowable under section 37i of the Income tax Act
It was not an expenditure of a capital nature
The Tribunal was justified in declining to add back this item of expenditure to the gross profits
115B C vi The Company had filed an appeal against the order of the Income tax officer postponing consideration of the company s claim for extra shift allowance
The Company had produced figures of depreciation and that had not been subjected to any serious challenge by the Unions
In the circumstances the Tribunal rightly refused to add back the amount claimed by the Company as extra shift allowance
1 15F G Jabalpur Bijlighar Karamchari Panchayat vs
The Jabalpur Electric Supply Co Ltd and another AIR 1972 SC70 applied
vii The amount claimed by the Companyin respect of repairs and renewals was supported by evidence and had been accepted by the auditors
The contention of the Unions that the Company was not justified in incurring the said expenditure had been rightly rejected by the Tribunal
1 15A viii Since from the evidence produced on behalf of the company it was clear that there was no surplus after paying bonus for 1964 65 the question of set on for the next year did not arise
The plea of the Unions in this regard had to be rejected
116F After working out the available and allocable surplus on the basis of the above findings the Court fixed the bonus payable at 1402