MADRAS BENCH SREVILLIUTHUR CO- COMMISSIONER OF v. OPERATIVE MILLS INCOME TAX LTD. January 29, 1987 JUDGMENT Chandukar, C.J.: These petitions under s. 256(2) of IT Act, 1961 are filed for direction to Tribunal to forward statement of case referring following question for reference: "Whether, on facts and in circumstances of case, Tribunal was justified in holding that Additional payment made is not bonus and hence cannot be disallowed under provision to s. 36(1)(ii)?" In order of Tribunal, view taken was that having regard to decision of Supreme Court in Sassoon J. David & Co. (P.) Ltd. vs. CIT (1979) 10 CTR (SC) 383: (1979) 118 ITR 261 payment of amount in addition to bonus prescribed under Payment of Bonus Act was in nature of ex gratia payment and did not partake of nature of bonus and was, therefore, not hit by ceiling prescribed under first Proviso to s. 36(1)(ii) of IT Act, 1961. settlement between employer and Union specifically provided in respect of 3 per cent additional amount which has been paid to be in consideration of cordial and smooth working of Mills in relevant year. It was, therefore, not payment linked with profit and was out of commercial expediency. Expenditure in form of such payment was clearly incurred wholly and exclusively for purpose of business of assessee. In view of above decision of Supreme Court question of law which is requested to be referred does not really arise. Accordingly, petitions are rejected. No orders as to costs. *** COMMISSIONER OF INCOME TAX v. SREVILLIUTHUR CO-OPERATIVE MILLS LTD.