Search Results Page
Search Results
1 - 9 of 9 (0.43 seconds)The Companies Act, 1956
Standard Mills Co. Ltd vs Commissioner Of Wealth-Tax, Bombay ... on 6 October, 1966
I respectfully adopt the ratio as above and add that, in the circumstances of this case, the entire gratuity fund though related to an anterior period cannot be said to have accrued or is a debt owing, which situation alone can compel the company adopting the mercantile system to provide for it then and there. The Tribunal concedes that gratuity was to be paid by the company as and when it became payable. To create an actuarial fund notionally so as to operate on it when gratuity is payable in terms of the award is something which is not found in the award and for the violation of which the company cannot be penalised. I am unable to accept the view that gratuity directed to be paid is nothing but contribution of the management to the provident fund. This scheme of gratuity was created under the award as a substitute for provident fund which was not in vogue during 1936 to 1955, This financial benefit granted to the labour was linked with the provident fund for the purpose of fixing the time when such gratuity has to be paid. Undoubtedly, provident fund has to be paid only when the employee retires So also this fictional gratuity invented by the Textile Arbitration Committee created a bare privilege and made it payable along with the provident fund of the employee. This is the view of the Supreme Court in Standard Mills Co., Ltd., Bombay v. Commissioner of Wealth-tax, Bombay []. They characterised it as a contingent liability. It follows that a more reasonable and real method of payment would be to pay the Same and discharge the liability on the date of retirement of the concerned worker. This is the proper time when it has to be reckoned fur all purposes including the one to land the allocable surplus under the Payment of Bonus Act. The Industrial Tribunal was wrong in adding back the sum of Rs. 42,085 to the net profits so as to determine the percentage of bonus payable to the labour.
The Income Tax Act, 1961
The Wealth-Tax Act, 1957
Section 10 in The Industrial Disputes Act, 1947 [Entire Act]
Section 2 in The Wealth-Tax Act, 1957 [Entire Act]
Mental Box Co. Of India Ltd vs Their Workmen on 20 August, 1968
In Metal Box Co. of India v. Their Workmen 19691 L.L.J. 785; (1969) 35 F.J.R. 181, the Supreme Court expressed the view at p. 193 that:
The Central Weaving And Mfg. Co., Bombay vs Mill Mazdoor Sabha, Bombay And Anr. on 12 March, 1969
This observation is not of universal application. It is only in a case where profits could not be ascertained without deducting the liabilities and if the liabilities are capable of immediate and certain ascertainment then they ought to be debited to the profits. I do not think that the item in question in the instant case is so capable of evaluation and in any event it cannot be said that without deducting the gratuity in a lump sum the profits cannot be ascertained. On the other hand, it would be reasonable for a public company so truncate such gratuity payable to the employees on their retirement and spread it over years so that the shareholders may be benefited and the profits might increase. Central Weaving and Manufacturing Company, Bombay v. Mill Mazdoor Sabha, Bombay 196911 L.L.J (S.N) 65, was a case where the company was maintaining accounts in a mercantile system. The Supreme Court expatiating the principle of mercantile system held that in such a system of accounting amounts would be credited and debited as they accrued due and not when they were actually received or expended. That this is the main indicia of mercantile system cannot be denied. But, in the instant case whether the totality of the gratuity amount should have been debited soon after the finding of the Textile Arbitration Committee is a moot question. It has no bearing on the system of accounting because it cannot be predicted that it was an amount which accrued as payable even in the next year of the arbitration award. In all the above cases the facts were borne in mind before directions were given by the Supreme Court as above. The Textile Arbitration Committee, while providing a gratuity benefit for the workers, since there was no provident fund, during the years 1936 to 1955, said:
1