THE SREE MEENAKSHI MILLS, LTD. versus THEIR WORKMEN

THE SREE MEENAKSHI MILLS, LTD. versus THEIR WORKMEN

The whole of the depreciation admissible under the Income-tax Act is not allowable in determining the available surplus for bonus. Only normal depreciation, including multiple shift depreciation, should rank as prior charges; initial and additional depreciation are abnormal additions and should not be deducted as prior charges. Provision for a higher amount of income-tax cannot be made simply due to the disallowance of additional or initial depreciation increasing the gross profits, as the industrial tribunal's method of calculating trading profits does not equate to taxable profits under the Income-tax Act.

Parties
Appellant: The Sree Meenakshi Mills Ltd.; Respondent: Their Workmen
Jurisdiction
India
Judgment Date
05 November 1957
Procedural Posture
Civil Appeal / Appeal by Special Leave From the Labour Appellate Tribunal (decision Dated December 7, 1953, in Misc. Case No. III C 387 of 1953 and Related Appeals)
Outcome
Appeals dismissed.
Legal Topics
Bonus Determination, Depreciation Under Income Tax Act, Powers of Industrial and Appellate Tribunals, Income Tax Provision Calculations
Labour Law Industrial Disputes Bonus Determination Depreciation Under Income Tax Act Powers of Industrial and Appellate Tribunals Income Tax Provision Calculations

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Parties

The Sree Meenakshi Mills Ltd.

Appellant

Their Workmen

Respondent

Procedural Posture

Civil Appeal / Appeal by Special Leave From the Labour Appellate Tribunal (decision Dated December 7, 1953, in Misc. Case No. III C 387 of 1953 and Related Appeals)

Legal Issues

  1. 1 Whether the whole of the depreciation admissible under the Income-tax Act is allowable in determining the available surplus for bonus distribution to workmen.
  2. 2 Whether the Labour Appellate Tribunal has power to review its own orders.
  3. 3 Whether provision for a higher amount of income-tax can be made when additional or initial depreciation is disallowed.

Ratio Decidendi

The whole of the depreciation admissible under the Income-tax Act is not allowable in determining the available surplus for bonus. Only normal depreciation, including multiple shift depreciation, should rank as prior charges; initial and additional depreciation are abnormal additions and should not be deducted as prior charges. Provision for a higher amount of income-tax cannot be made simply due to the disallowance of additional or initial depreciation increasing the gross profits, as the industrial tribunal's method of calculating trading profits does not equate to taxable profits under the Income-tax Act.

Court Disposition

Appeals dismissed.

Orders

  • All appeals fail on the merits and are dismissed with costs. There will be one set of costs in all these appeals.