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4. The Tribunal, after referring to the dispute raised regarding the payment of bonus and the reference to the Labour Officer which was ultimately settled and later approved by the Government at the rate of 16.67 per cent., held that the bonus paid by the assessee cannot be regarded as customary bonus. The Tribunal held that the payment made on the basis of an order of authorisation made under the provisions of Section 34 of the Act was also a payment made under the Payment of Bonus Act and since the payment did not exceed 20 per cent, of the wages, the maximum bonus allowable under the Payment of Bonus Act, the claim of the assessee was sustainable under Section 36(1)(ii) of the Income-tax Act and the payment so made could not be disallowed on the ground that it was not made in accordance with the Payment of Bonus Act. The Tribunal, in this view of the matter, allowed the assessee's claim and deleted the disallowance of Rs. 9,49,102.

5. The Revenue challenged the order of the Income-tax Appellate Tribunal and learned counsel for the Revenue submitted that the payment made is not in accordance with the Payment of Bonus Act as the allocable surplus was Rs. 99,278 and in the circumstances, the payment of minimum bonus would be sufficient and, therefore, the Tribunal was not justified in allowing the entire amount of Rs. 18,98, 199.

6. We are unable to accept the contention made by learned counsel for the Revenue. We see that there was a dispute raised by the employees of the assessee-company regarding the payment of bonus and the matter was settled by the Labour Officer and later, the Government by order dated February 14, 1978, granted approval under Section 34 of the Payment of Bonus Act for the payment of bonus in excess of the minimum amount of bonus prescribed by the Payment of Bonus Act.

7. The agreement also provided that the amount already paid could be adjusted against the payment agreed to be made on the formula approved by the Government. The assessee was required to pay the bonus in accordance with the approval granted by the Government under Section 34 of the Payment of Bonus Act and hence, such payment is also a payment under the terms of the Payment of Bonus Act. It is not disputed by the Revenue that the amount paid is not in excess of the maximum amount payable under the Payment of Bonus Act, though it exceeded the quantum payable on the allocable surplus available with the company, but once it is found that the payment made was under the Payment of Bonus Act, the entire claim of the assessee has to be considered as a payment under the Payment of Bonus Act.

8. We are of the opinion that it is not open to the Income-tax Officer to go into the further question or delve deep into the matter to find out whether the amount was in excess of the amount payable on the allocable surplus of the assessee as the dispute regarding bonus was settled and ultimately got approved by the Government under Section 34 of the Payment of Bonus Act. In our view, the Tribunal has come to the correct conclusion in holding that what was paid was a bonus and the amount paid was within the limits of the Payment of Bonus Act and since the amount paid was within the permissible maximum limit allowed under the Payment of Bonus Act, the entire claim made by the assessee is allowable as a business expenditure under Section 36(1)(ii) of the Income-tax Act. We find no infirmity or error in the order of the Tribunal holding that the entire claim of the assessee is allowable under Section 36(1)(ii) of the Act and the Tribunal was justified in allowing the claim and deleting the disallowance made by the Income-tax Officer. Hence, we answer the first question of law referred to us in the affirmative, against the Revenue and in favour of the assessee.