LexBURN AND COMPANY LTD. versus ITS WORKMEN
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.. I S S.C.R. SUPREME COURT REPORTS 823 In the result we answer the question framed 1963 thus: The rent from the building will be computed separately from the income from the furniture and Sultan Brothers fixtures and in the case of rent from the building the (P) Ltd. appellant will be entitled to the allowances mentioned v. in sub-sec. (4) of s. 12 and in the case of income from Commissioner the furniture and fixtures, to those mentioned in sub-s. of Income-tax (3), and that no part of the income can be assessed under s. 9 or under s. 10. The judgment of the High Sarkar J. Court is set aside. The appellant will be entitled to the costs here and below. Appeal allowed . BURN AND COMPANY LTD. v. ITS WORKMEN (P.B. GAJENDRAGADKAR AND K.C. DAS GUPTA, ]J.) Industrial Dispute-Bonus-Rehabilitation charges-Assess- ment on insufficient evidence, if binding-Salaries, rates and taxes for previous years-If proper expenses for year in question-Auditor's findings-If binding on Tribunal-Development rebate statutory reserve-Money paid into-If expenditure on revenue account- Provident Fund, contribution-If qin be added to net profit for calculating gross profits-Preference & ordinary -Dividend rate. Dispute arose between the company and its workmen over the profit bonus for the year 1960. The company was prepared to pay bonus at 3-l; months' wages, but the workmen demanded more. Applying the principles laid down by this Court, the Tribu- nal worked out, the net available surplus after making deductions for income-tax return on working capital and rehabilitation charges from the gross profit. It appears that the Tribunal calculated the annual rehabilitation charge mainly on the basis of what had been decided on the question of rehabilitation charge in the bonus dispute in a previous year. The evidence. adduced by t~~ c~mpany, in the present Reference, on the ques!Ion of rehab1bta!Ion was rejected by the Tribunal. In calculating the gross profits the \' 1963 December 6 1963. Burn and Company Ltd. v. its Workmen 824 SUPREME COURT REPORTS [1964] Tribunal added back to the net profit in addition to the sum which the company agreed should be added, the sums paid as salaries for the previous years rates and taxes in respect of previous years, contribution for provident fund, the sum paid into the develop- ment rebate statutory reserve, certain expenditure said to have been incurred on purchases and repairs, and certain expenditure shown under the head Miscellaneous expenses. The Tribunal awarded 5! months' wages as bonus to the workmen. Held: (i) That once the question as to what is necessary for rehabilitation and over how many years it should be spread has been properly decided by industrial adjudication, the assess- ment made ought not to be lightly disturbed if the question comes up again in any future year. It is necessary for industrial adjudica- tion to project itself into the future and decide the total rehabilita- tion charges over the years and the number of years over which rehabilitation has to be spread. Rehabilitation is, thus rightly regarded as a long term problem. But where the decision in one year is more on the basis of lack of evidence than on investigation of the evidence adduced it would be unreasonable to treat this as binding for all years to come. In such cases, if in any future dispute reliable evidence is adduced by the company on the question of rehabilitation due weight should be given to it and the Tribunal should not reject it merely on the basis of what has been found in the previous years. (ii) The payment of salaries of previous years as also rates and taxes for previous years cannot be considered proper expenses for the year in question for the prupose of ascertaining available surplus. As pointed out by this Court in its previous decisions, the credits and debits referable to the working of previous years cannot be taken into consideration for this purpose for the simple reason that the workman concerned do not remain identical year after year. (iii) The Tribunal was not bound to accept as correct what- ., ever had been found correct by the Auditors. The Tribunal • was justified in refusing, in the absence of proper evidence to accept the company's contention that the expenses shown in the profit and loss account under various heads of purchases and repairs were all revenue expenditure. (iv) The money paid into develop
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