LexMYSOHE KIRLOSKAR LIMITED versus WORKERS OF THE MYSORE KIRLOSKAR LIMITED
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(I) S.C.H ..
SUPltEME COURT REPORTS
375
MYSOHE KIRLOSKAR LIMITED
t'.
WORKERS OF THE MYSORE KIRLOSKAR
LIMITED
(P. B. GAJENDRAGADKAR, A. K. SARKAR and K .. N.
WANHOO, JJ.)
Industrial Dispute-Bonus-Income Tax deductions-
Method of calculation-Working
Capital-Return, if could
include borrowed or deposit amount on whi-0h oompany was pay·
ing interest -Rehabilitation-Evidence as to the prior charges
not led, if could be led for subsequent dispute.
Held, that in consonance with the decision in the Assa:;
ciated Companies Ltd's case the income-tax deduction n1ust
be calculatfd on the amount which represents the balance
after deducting the full statutory depreciation allowed from
the gross profit.
Held, further that the rate allowed for return on work-
ing capital is to 2 to 4% which is at the discretion of the
Tribunal and the Supreme Court usually will not interfere with
the discretion exercised by the Tribunal in a particular case.
Held, further that for the purpose of returns on work-
ing capital, the working capital cannot include a sum which
was either borrowed or was in deposit with the company on
which the company was paying interest. The company can•
not claim further interest on the borrowed amount which
has been used as -working capital, for it has already paid
interest on it to those from whom it was qorrowed and this has
been taken into account as expense in arriving at the gross
profit. Where borrowed money is used as working capital
there is no question of giving any further return on this
borrowed money. The return on reserves used as working
capital can only be given on moneys belonging to the com•
pany which are used as working capital.
Held, also, that where there is a dispute with regard
to the claim for bonus by the workmen for a particular year
and the fact that no evidence as to rehabilitation was led in
· that particular year will ·not preclude the compiµiy froJD
leading evideni:e as to the amount which should be allowed
to it as prior charges on account of rehabilitation, in any
subsequent dispute as to bonus relating to subsequent years •
. 1'/ie Associated Cement Companies Ltd. v. 118 Workmen,
(1959] S.C.R, 925, followed.
November 15.
. .
JJGJ
Mrsort KirlOJkM
-
Lid.
v.
H'orkm of the
Mysor1
A"irlu1kar Lid.
JViv1Choo J.
37G SUPREME COURT REPORTS [1962] SUPP.
Crvrr. APPELLAn: JURISDICTION : Civil Appeal
No. 233 of 1960.
Appeal
by
special leave from the award
dated September 29, 1958, of the Industrial Tribu-
nal, Mysore, in Reference (LT.) No. 21 of 1957.
iV/, C. Setalvad, Att-Orney-General for India,
S. L. Nara.~imha Murthy and J. N. Shroff, for the
appellant.
Junardan Sharma, for rc8pondent No. 1.
1961. November 15. The Judgment of the
Court was delivered by
WANCHOO, J.-Thisis an appeal by special leave
in an industrial matter. There was a. dispute between
the appellant and its workmen as to bonus for the year
11154-55.
This dispute waa referred by the Govorn-
meµt of My11ore under the Industrial Disputes Act
No. XIV of 1947) to a tribunal for adjudioation. A
number of objections were raised by the appellant
before the tribunal; but we are not concerned
with them, as the law with respect to profit bonus
has been settled by this Court in the Asaociated
Cement Companies Ltd. v. Its workmen(1 ).
The only
point.II urged on behalf of the appellant by the
learned Attorney-General are with respect to the
amount of inoome-tax, return on working capital
and provision for rehabilitation in connection with
tho calculations made by the tribunal. We shall
therefore confine ourselves to the three points which
have been raised before us on behalf of the
appellant.
The tribunal allowed Rs. 1.67 laos for iucome-
tax. The contention of the appellant is that this
is incorrect in view of the decision of this Court in
the .daaociated Cement Compniea Ltd.(') It appears
that the gross profits of the appellant wore Rs.9.46
lacs, while the full statutory depreciation allowed
to the appellant for the year in dispute was Re. 4.30
lacs. Thus income-tax should have been deduoted
1. [19.Y.IJ s.c.R.s2s.
..
..a...
(l) S.C.R. SlJPH.EME COURT REPORTS
'377
on the sum of Rs. 5.16 lacs at seven annas in the
rupee, which was the rate prevalent in the relevant
year. This amount comes to Its. 2.25 lacks. The
contention of the appellant in this behalf is in our
opinion correct and the calculation made by the
tribunal will hiive to be modifExcerpt shown. Read the full judgment & AI analysis in Lexace.