Summarize the following court judgment. Appeal No. 496	of 1963. Appeal by special leave front the Award dated August 26	 1961	 of the Industrial Tribunal	 Maharashtra in Reference (IT) No. 43 of 1961. S.V. Gupte	 Additional Solicitor General of India and I. N. Shroff	 for the appellant. K. R. Chaudhuri	 for the respondents. December 19	 1963. The Judgment of the Court was 	delivered by: GAJENDRAGADKAR J. This appeal arises from an	 Industrial dispute between the appellant Podar Plastics (P) Ltd. and the respondents	 its workmen	 and it has reference 	to the claim made by the respondents for bonus for the year 1959. The respondents claim that for the relevant year they should get bonus equivalent to three months ' salary includ ing dearness allowance. On hearing the parties and on con sidering the evidence adduced by them	 the Tribunal has 	directed that the appellant shall pay to the respondents bonus at the rate of half month 's basic wages excluding 	allowances and overtime for the said year. It is against this 	award that the appellant has come to this Court by special leave. The appellant is a private company and its registered 	office is situated at Podar Chambers	 Parsee Bazar Street	 Fort	 Bombay. It owns a factory at Supari Baug Road where it manufactures plastic products. The appellants case before the Tribunal was that if proper accounts are made in accordance with the Full Bench Formula	 it would be found that there is no available surplus from which any bonus can be paid to the respondents. On the other hand	 the respondents urged that the working of the Formula would show a substantial available surplus from which three months ' wages as bonus can be easily paid. As usual	 the controversy between the parties centered round prior charges which the appellant claimed ought to be deducted from the gross profits. One of the points of dispute between the 134 159 S.C. 2. 18 parties was whether depreciation which has to be deducted 'as a prior charge should be statutory depreciation or notional normal depreciation. The figure of the profit was. admitted at Rs. 2.70 lacs. The Tribunal made alternative calculations	 one on the basis that statutory depreciation alone should be deducted	 while the other was prepared on the basis that notional normal depreciation as claimed by the appellant should be deducted. On the first calculation the available. surplus was found to be Rs. 0. 44 lac. On the alternative calculation	 it was found to be Rs. 0.33 lac. For the purpose of this appeal we will accept the latter calculation which is made on the basis that the notional normal depreciation has to be deducted. It has been conceded before us by the learned Addl. Solicitor General for the appellant that there are two mis takes in this calculation. The amount of notional normal depreciation which has been shown as Rs. 0. 78 lac ought to be Rs. 0. 7 3 lac. Similarly the amount of income tax which is shown as Rs. 0. 96 lac ought to be Rs. 0. 95 lac. Thus	 the two mistakes accounting for nearly Rs. 6	000 have been made in favour of the appellant by the Tribunal in making this calculation	 and that would make the available surplus as Rs. 0.39 lac; that is one aspect of the matter which has to be borne in mind in dealing with the appeal before us. The main point which has been urged before us by the learned Addl. Solicitor General relates to the claim made by the appellant for the deduction as a prior charge of Rs. 60	000 by way of notional remuneration for Mr. K. R. Podar	 one of the Directors of the Company. We have already seen that the appellant is a Private Ltd. Co. and four of the major shareholders are members of the Podar family; they are: R.A. Podar	 G.R. Podar	 K.R. Podar and B.J. Podar; the 5th shareholder is M /s. Podar Trading Co. Private Ltd.	 6th is Jay Agents Private Ltd.	 7th is the National Traders Private Ltd. and the 8th is Ratilal B. Desai. According to the appellant	 K.R. Podar devoted the whole of his time to the supervision and management of the appellant concern	 and so	 he was entitled to charge remuneration at the rate of Rs. 5	000 a month. In sup 19 port of this claim	 Mr. Gupta	 the Manager of the concern	 made an affidavit and offered himself for cross examination. He stated that Mr. Podar attends the factory from 9 A.M. to 1 P.m. and 2 30 P.m. to 6 30 P.m. In his cross examination	 it was brought out that when the previous Director was paid Rs. 1000 per month as remuneration	 a resolution had been passed by the Board of Directors in that behalf; but no such resolution has been passed in regard to the remuneration of Mr. K. R. Podar. Besides	 the appellant itself has urged that Mr. Podar did not actually charge any remuneration because it was thought that the financial position of the appellant was not very satisfactory	 and so	 Mr. Podar wanted to save expenditure on account of his remuneration. It may be conceded that in a concern like the appellant 's if one of the Directors spends his time in supervising and managing the affairs of the concern	 he would be entitled to charge a reasonable remuneration. This position has not been and cannot be disputed in view of the decisions of this Court in Gujarat Engineering Company vs Ahmedabad Misc. Industrial Workers ' Union(1)	 and Kodaneri Estate vs Its Workmen and Another 2 Relying on these decisions	 it is urged on behalf of the appellant that the Tribunal was in error in not allowing any deduction on account of remuneration to Mr. Podar. In our opinion	 the appellant cannot seriously quarrel with the finding of the Tribunal	 because it is conceded that Mr. Podar in fact has not charged any remuneration. The working of the Formula is no doubt notional in some respects	 but we think it would not be permissible for the employer to make it still more notional by introducing claims for prior charges on purely hypothetical and almost fictional basis. If Mr. Podar had been paid remuneration regularly and it had been duly shown in the books of account	 a claim in that behalf could have been made by the appellant	 and subject to the scrutiny by the Industrial Tribunal as to reasonableness of the said payment	 such a claim would have been allowed; but if for any reasons Mr. Podar did not charge any remuneration	 it would be unfair to allow a deduction on that account to be made notionally (1) (2) 20 because the working of the Formula is sometimes described as notional. The inclusion of such an item solely for the purpose of depressing the available surplus cannot	 in our opinion	 be allowed. Besides	 the Tribunal does not appear to have accepted the evidence for Mr. Gupta and it has made a significant comment that Mr. K. R. Podar has himself not stepped into the witness box to make a claim for his remuneration. Mr. Gupta was asked whether Mr. Podar was going to give evidence	 and he answered the question in the negative. Therefore	 if in the circumstances proved in this case	 the Tribunal did not feel justified in allowing the claim for deduction made by the appellant in regard to the notional remuneration of Mr. Podar	 the appellant cannot make a serious grievance. The other point in controversy is in regard to the direction of the Tribunal that the appellant was not entitled to make any claim for rehabilitation. It appears that the Tribunal was inclined to take the view that since the appellant had begun its business with second hand machinery	 it was not entitled to make a claim for rehabilitation on the basis of replacement of the said machinery by brand new machinery. In other words	 the Tribunal seems to be of the opinion that in cases where an employer is carrying on his business with second hand machinery	 rehabilitation should be calculated on the basis that the said second hand machinery would be replaced by second hand machinery and not by new machinery. This view has been rejected by this Court in the case of South India Millowners ' Association and Ors. vs Coimbatore District Textile Workers ' Union and Ors(1). Therefore	 the appellant is right in contending that the approach adopted by the Tribunal in dealing with the question of rehabilitation is erroneous. That	 however	 does not help the appellant because in the present case the Tribunal has considered the evidence given by Mr. Dinshaw on behalf of the appellant In support of its claim that the rehabilitation requirement of the appellant would be of the order of Rs. 8	84	629. It is true that one of the reasons given by the Tribunal is that the (1) [1962] 1.L.L.J. 223. 21 appellant is not justified in making a claim for rehabilita tion on the basis that new machinery would be purchased by him for rehabilitating his old one; but there are several other reasons which the Tribunal has discussed and these reasons indicate that the Tribunal was not satisfied with the accuracy of the statements made by Mr. Dinshaw and their reliability. Incidentally	 it appears that the appellant made a novel claim for rehabilitating his dead stock as one of the items under rehabilitation	 and the Tribunal has re jected that claim. In the result	 the finding of the Tribunal is based on its appreciation of the evidence led by the appellant and that cannot be disturbed having regard to the material which is available on the record. The Tribunal has taken the precaution of adding that if the appellant leads better evidence in future	 its claim for rehabilitation would have to be judged on the merits and the present decision will not create any bar against it. In our opinion	 that is all that can be done in the present appeal. The learned Addl. Solicitor General	 however	 attempted to argue that the Tribunal should have made some allowance for rehabilitation on an ad hoc basis and in support of this contention	 he has referred us to some of the observations made in the case of South India Millowners ' Association (1). It appears that in that case	 the appellant Mills had not adduced relevant evidence about the original price and subsequent depreciation of the machinery prior to its purchase by the appellant	 and so	 acting on the evidence available on the record	 the Tribunal adopted some (id hoc basis. No grievance was made about the ad hoc basis adopted by the Tribunal; the only grievance made was against certain observations made by the Tribunal that if the existing machinery is second hand. it should be rehabilitated only by second hand machinery	 and this Court held that the said observations did not represent the true position in the matter. It would	 we think	 be erroneous to assume that this Court approved of or affirmed the ad hoc basis adopted by the Tribunal in that particular case. On what material the said ad hoc basis was adopted is not known	 and it would	 we think	 be unreasonable to suggest that if the employer does not adduce sufficient evidence to (i) 22 justify his claim for rehabilitation and the Tribunal is in clined to reject the evidence which has been adduced	 the Tribunal must nevertheless award some rehabilitation on a purely hypothetical and imaginary ad hoc basis. In such a case all that the Tribunal can do is to safeguard the posi tion of the employer by giving him opportunity to adduce better evidence in future	 and that is what the Tribunal has done in the present case. An attempt was then made by the learned Addl. Solicitor General to make a claim for the deduction of the wealth tax. It has been consistently held by this Court that in bonus calculations the employer is entitled to claim a deduction of the income tax as well as wealth tax; but	 in the present case	 there is no material to determine what the amount of wealth tax charged or paid is	 and so	 no relief can be granted to the appellant on that account. In the result	 the appeal fails and is dismissed with costs. Appeal dismissed.

An Industrial Dispute arose between the appellant and its workmen in respect of the claim made by the workmen (respondents) for bonus for the year 1959. The respondents claimed that they were entitled to get bonus equivalent to three months ' salary including dearness allowance	 The appellant claimed deductions on the basis of the Full Bench 16 Formula. The appellant claimed deduction of Rs. 60	000 by way of notional remuneration for Mr. K. R. Podar	 one of the Directors of the company. According to the appellant K. R. Podar devoted the whole of his time to the supervision and management of the appellant concern	 and so	 he was entitled to charge remuneration at the rate of Rs. 5	000 a month. The appellant also made a claim for rehabilitation. On these facts the Tribunal directed the appellant to pay to the respondents bonus at the rate of half month 's basic wages excluding allowances and overtime for the said year. It is against this award that the appellant has come to this Court. Held:(i) that in a concern like the appellant 's if one of the Directors spends his time in supervising and managing the affairs of the concern	 he would be entitled to charge a reasonable remuneration. But in the present case Mr. Podar did not actually charge any remuneration. The working of the Full Bench Formula is no doubt notional in some respects	 but it would not be permissible for the employer to make it still more notional by introducing claims for prior charges on purely hypothetical and almost fictional basis. The Tribunal did not feel justified in allowing the claim for deduction made by the appellant in regard to the notional remuneration of Mr. Podar on the ground that Mr. Podar had not been paid remuneration regularly and it had not been duly shown in the books of account. Gujarat Engineering Co. vs Ahmedabad Misc. Industrial Workers ' Union	 and Kodaneri Estate vs Its Work men	 	 relied on. (ii)It is not the correct legal position that a second hand machinery should be rehabilitated only by second hand machinery. But in the present case the finding of the Tribunal in respect of the claim for rehabilitation is based on its appreciation of the evidence led by the appellant and that cannot be disturbed having regard to the material which is available on the record. SouthIndia Millowners"Association vs Coimbatore District Textile Workers 'Union	 	 relied on. (iii)It would be erroneous to assume that this Court approved of or affirmedthe ad hoc basis adopted by the Tribunal in the case of South India Millowners ' Association. (iv)It would be unreasonable to suggest that if the employer does not adduce sufficient evidence to justify his claim for rehabilitation and the Tribunal is inclined to reject the evidence which has been adduced	 the Tribunal must nevertheless award some rehabilitation on a purely hypothetical and imaginary ad hoc basis. In the present case the employer adduced evidence for rehabilitation and that was rejected by the Tribunal. (v)It has been consistently held by this Court that in bonus calculations the employer is entitled to claim a deduction of the Income tax as well as wealth tax; but in the present case	 there is	 no material 17 to determine what the amount of wealth tax charged or paid is	 and so	 no relief can be granted to the appellant on that account.