IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. I.T.R. No.69 of 1988 Date of decision: 13.12.2006 The Commissioner of Income-tax, Patiala. -----Applicant Vs. M/s Hindustan Wire Products Ltd., Patiala. -----Respondent CORAM:- HON'BLE MR JUSTICE ADARSH KUMAR GOEL HON'BLE MR JUSTICE RAJESH BINDAL Present: Dr. N.L. Sharda, Advocate for the revenue. ----- ORDER: Following question of law has been referred for opinion of this Court by the Income Tax Appellate Tribunal, Chandigarh Bench, Chandigarh, arising out of its order dated 20.06.1985 in I.T.A. No.69/Chandi/84 in respect of assessment year 1979-80:- “1. Whether on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in allowing deduction u/s 36 (1)(ii) of bonus paid in excess of the limits prescribed under the payment of Bonus Act, 1965? 2. Whether on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in holding that the payment of bonus over and above the prescribed limits under the payment of Bonus Act is an admissible expenditure u/s 37 (1) of the I.T. Act even though the expenditure falls under the specific Section 35 of the said Act?” Learned counsel for the revenue fairly states that the questions referred have already been gone into by this Court vide order dated 29.11.2006 in I.T.R. No.15 of 1994, Commissioner of Income Tax (Central), Ludhiana v. Punjab Concast Steels Ltd., Ludhiana for the assessment year 1985-86, wherein, after referring the judgments of Delhi High Court in Commissioner of I.T.R. No.69 of 1988 Income-Tax v. Autopins (India) (1991) 192 ITR 161, Madras High Court in Commissioner of Income-Tax v. Bhavani Mills Ltd. (1999) 237 ITR 855 and Orissa High Court in Commissioner of Income-Tax v. Orissa Industries Ltd. (1993) 203 ITR 449, the questions referred had been answered against the revenue and in favour of the assessee and it was held as under:- “…………..We are also in agreement with the view taken in the judgments relied upon that Section 36(1)(ii) is not applicable to payments to which the Bonus Act does not apply and allowability of deductions in respect of such a payment is to be considered with reference to Section 37 of the Act. Once this is so, in view of the finding recorded by the CIT(A) as well as Tribunal, deduction was rightly allowed.“ In view of above, the questions referred are answered against the revenue and in favour of assessee. The reference is disposed of. ( ADARSH KUMAR GOEL ) JUDGE December 13, 2006 ( RAJESH BINDAL ) ashwani JUDGE Pag e