I am currently doing a tax audit of a listed company.
The company is creating emoployee assured bonus (other than the normal bonus as per payment of bonus Act, which is separately created) based on some criteria.
My doubt is whether the employee assured bonus so created is to be disallowed under Sec.43B, If not paid before date of filing of return.
I got a case law, the contents are as follows,
Case Law :-"Commissioner Of Income-Tax vs Shaw Wallace And Co. Ltd. on 22/8/1989"
Contents:- We may add that by Section 11 of the Direct Tax Laws (Amendment) Act, 1987, two provisos to Section 36(1)(ii) laying down ceilings on the bonus to be allowed as deduction have been deleted with effect from April 1, 1989. Simultaneously, bonus payments have been covered by the provisions of Section 43B, so that these are allowed on actual payment basis. This amendment only indicates that the Legislature did never intend that the payment of bonus in whatever name it is called in excess of the amount of bonus prescribed under the Payment of Bonus Act, 1965, would not be allowable even if such payment is reasonable and has been made having regard to the commercial and business expediency and to maintain the target of production through sustained industrial peace.
21 September 2010
read section 43B 62[(c) any sum referred to in clause (ii) of sub-section (1) of section 36,] 63[or]
36(1)(ii) any sum paid to an employee as bonus or commission29 for services rendered, where such sum would not have been payable to him as profits or dividend if it had not been paid as bonus or commission;