JUDGMENT : Sawant, J.—These are two cross-petitions one filed by the Union of Workmen (Writ Petition No. 543 of 1983) and the other filed by the employer-company (writ petition No. 1301 of 1983), challenging the Award of the Industrial Tribunal dated September 30, 1981 in reference (IT) Nos. 431 and 443 of 1975). The dispute relates to the payment of Bonus for the year ending June 30, 1974. 2. We are concerned with the following four terms of disputes, in Writ Petition No. 543 of 1983:- (a) Pipe laying expenses of Rs. 7,10,240/-; (b) Temporary loans of Rs. 1,80,288/-; (c) Foreign tours expenses of Rs. 1,29,252/- and (d) Exchange loss of Rs. 3,42,289/-. (a) Pipe-laying expenses : In the balance sheet, the Company has made a provision for Rs. 7,10,240/- as pipe-laying maintenance expenses treating them as an ascertained expenditure. It is the contention of the Company that although the amount is not actually spent, it is set aside every year as an ascertained percentage in respect of such pipe-laying contract treating it as maintenance charges for the guarantee period of the pipe-laying works. This percentage is fixed on the basis of the experience gained in the field for a number of years. It is the case of the Company that if and when the guarantee period gets over and the amount remains to be spent, the same is brought back into profit and loss account under the heading "provisions no longer required" and the benefit is given to the workmen in that year. It is also the Company's contention that this procedure of accounting has been followed by the Company consistently. As against this, it is contended by the Union that the said amount is only a provision, and is not an expenditure which is actually incurred by the Company during the year in question, and therefore, the amount has to be added back to the profits of the Company for that year. The tribunal has accepted the contention of the Company wrongly and hence the gross profits of the year in question will have to stand increased to that extent. 3. Even according to the Company, this amount is only a provision made for the maintenance charges that may have to be incurred during the year. It is not an amount which is actually spent for the maintenance. 3. Even according to the Company, this amount is only a provision made for the maintenance charges that may have to be incurred during the year. It is not an amount which is actually spent for the maintenance. What is further, as is conceded by the Company, this amount is fixed at a certain percentage of the total contractual amount. The amount may or may not be spent in that particular year. It is only at the end of the guarantee period that the amount which is not spent is brought back into the profits of that year, i.e. the year when the guarantee period ends. Apart from the fact that a mere provision made for possible or contingent expenses cannot be treated as actual expenses incurred during the particular year, this method of accounting is inequitous to the workmen who work in the year in which the amount is set apart. The workmen or at least some of them may not be in the Company in the year in which the guarantee period comes to an end and will therefore not be entitled to its benefit. Hence this amount which is only a provision for contingent expenses cannot be treated as an actual expenditure and deducted from gross profits. We are therefore of the view that this amount has to be added back to the gross profit of the year in question and the allocable surplus will have to he calculated accordingly. 4. (b) Temporary loans : The amount of Rs. 1,80,288/- which has been shown by the Company as loan under the heading 'Sundry Creditors' stands on a different footing. As has been explained by the Company, this loan relates to a foreign unit of the Company viz., the Benghazi factory. On account of financial difficulties, the Manager of the said factory had arranged for a temporary loan from a local person and it was repaid to him out of the funds received by the Company on the sale of the said factory. This factory had remained closed not only during the year in question but also during the previous year, i.e. 1972-73. Since the amount was received as a temporary loan, it can never form a part of the profit of the foreign factory. Even the profit and loss account of the said factory for the relevant year shows that it had suffered a loss of Rs. Since the amount was received as a temporary loan, it can never form a part of the profit of the foreign factory. Even the profit and loss account of the said factory for the relevant year shows that it had suffered a loss of Rs. 2,18,632.87. The said profit and loss account also shows that the Company had incurred expenses for the said factory on account of supervision charges, provident fund contribution, rates and taxes, rent, postage and telegrams, travelling and conveyance, motor car expenses, office and general expenses and interest and auditors' remuneration whereas it had received amount on account of cash and credit sale to the extent of Rs. 350.71 and for sale of wires and rods to the extent of Rs. 6,210.63 and had further credited an amount of Rs. 15,195.86 as provision no longer required. It is therefore clear that the excess of expenses over the revenue had to be met by borrowing money. As is conceded by the Company the mistake it committed was to show the said amount of temporary loan under the heading "liabilities for expenses" and not "loans". The balance sheet of the said foreign factory does not show the said headings. The only headings shown there are "liabilities for supplies" and "liabilities for expenses", and the amount of the temporary loans is shown under the heading "liabilities for expenses". Since the said factory had shown the said loan as "liabilities for expenses" the Company had in its balance sheet included the said amount under the heading "sundry creditors". But the fact remains that the amount represents temporary loans. It is for this reason that we are not impressed by the Union's contention that the loan cannot be shown under the heading "Sundry Creditors'* since amounts appearing under sundry creditors must be the amount of expenses debited to profit and loss account and the loss incurred on account of foreign unit has to be added to the gross profits of the Company. We are also unable to accept the Unions contention that the loan taken by the foreign unit of the factory has to be added to the gross profits of the Company. It must be realised that this loan was paid from out of the funds realised from the sale of the said factory. It cannot therefore be described as an expense incurred by the Company. It must be realised that this loan was paid from out of the funds realised from the sale of the said factory. It cannot therefore be described as an expense incurred by the Company. Hence the amount cannot be added back to gross profits under item (e) of Schedule II of the Bonus Act. 5. (c) Foreign-tour-expenses : It is the contention of the Union that the amount of Rs. 1,29,252/- shown as expenses on foreign tours should be added to the gross profits because the said expenses were incurred for acquiring assets of the Company and they also compose of expenses which are admittedly incurred in relation to business of the Company's foreign factories. It is on the other hand, the case of the Company that no asset permanent or temporary either in the form of technology or machinery has been acquired by the Company pursuant to the said foreign tours undertaken by the Company's representatives. The tours were only for exploring the possibilities of collaborations with foreign concerns and for acquiring the latest techniques. It is its case further that the expenditure was in relation to the existing business both in this country as well as of the Company's factory at Benghazi. The law of the point is very clear. If the expenses have been incurred for mere exploring the possibilities of collaborations or acquisitions of know-how for the existing business, the expense is to be treated as revenue expenditure. However where pursuant to the expenditure permanent assets whether in the form of technical know-how or machinery are secured the expenditure is to be treated as capital expenses. Further, even if the expenditure is incurred for mere exploration but is incurred in connection with the foreign business, by virtue of the provisions of item 3(e) of Second Schedule to the Payment of Bonus Act, the expense will have to be added to the gross profits of the Company. 6. Unfortunately no clear evidence has come on record to show firstly, how much of this expense was in connection with the foreign business of the Company and secondly, how much of the balance of the expense can be attributed to the permanent assets in the form of the technical know-how and the machinery, it any, acquired by the Company for its business in this country. The figures are overlapping and in the absence of clear, cogent and distinct evidence on the points, it is not possible for this Court to give a finding on the subject. We therefore direct the Tribunal to allow both parties to lead evidence on the subject and then to decide the point according to law. 7.(a) the last item is of Rs. 3,42,309/-which has been debited by the Company as revenue expense on account of the exchange loss. According to the Company this is due to loss in exchange pertaining to the two foreign factories viz., Ceylon and Benghazi Factories. In the previous year, there was a profit on account of exchange due to devaluation of the foreign currency and it reflected in the profits of the Company's foreign units. That profit was added to the Company's gross profits and the workmen received benefit on that account. Hence when there is now a loss on account of the devaluation of the Indian currency that has also to be allowed as expense of the foreign unit and must be allowed as such. The contention of the Union, however, is that this being the loss incurred on account of the Company's foreign unit, not only it cannot be deducted from the gross profits but has to be added to the same. 8. The material placed by the Company on record shows that for the year ending 30th June, 1973, a sum of Rs. 5,74,034/-was shown under the heading 'unsecured loans". This loan was liquidated in the year 1974. While however liquidating the said amount which was an overdraft account, the Company had to pay higher rate due to devaluation of Indian Currency and consequently it had to suffer the exchange loss. This amount certainly cannot be shown as capital expenditure. As has been held by the Calcutta High Court in the case of Davidson of India Private Ltd. Vs. Commissioner of Income Tax, (1982) 27 CTR 291 the exchange joss on account of repayment of a loan which has been utilised for circulating/working capital has to be treated as revenue loss. The Supreme Court has also held in Sutlej Cotton Mills Limited Vs. Commissioner of Income Tax, (1982) 27 CTR 291 the exchange joss on account of repayment of a loan which has been utilised for circulating/working capital has to be treated as revenue loss. The Supreme Court has also held in Sutlej Cotton Mills Limited Vs. Commissioner of Income Tax, Calcutta, AIR 1979 SC 5 that profit or loss arising on account of appreciation or depreciation of foreign currency should be treated as a trading profit or loss if the foreign currency is held by the assessee or revenue account or as a trading asset or borrowed as circulation capital in business. If on the other hand, the foreign currency is held as capital asset or equity capital such profit or loss would be of capital nature. It is not disputed that the overdraft in respect of the Benghazi Branch was entirely for the day to day business expenditure of the said factory. Hence the exchange loss incurred by the Company in repayment of the Banks overdraft at Bengnazi out of the funds from this country has to be allowed as a revenue expense. 9. We are of the view that the Company has offered a jumbled explanation. Its witness has at one stage stated that this amount represented the loss in exchange pertaining to Ceylon and Benghazi factories. At another stage it is contended by the Company, that the loss was incurred while liquidating an unsecured loan of Rs. 5,74,034/- which was an overdraft-account in respect of the Benghazi factory. According to us it is immaterial that the said loss account be called capital expense. The fact remains that it is an expense incurred by the Company from its funds in this country for meeting the revenue or capital liabilities in respect of its foreign business. In view of item 3(e) of the Second Schedule to the Act, the said expense will have to be added back to the gross profits. The fact that on the earlier occasions the gains on account of the devaluation of the foreign currency, accrued as benefit to the workmen is no argument against the said clear provision of the Act. 10. Thus we are of the view that the amounts of Rs. 7,10,240/- and Rs. 3,42,309/-will have to be added to the gross profits of the Company while calculating the allocable surplus. The amount of Rs. 1,80,288/-is not liable to be so added. 10. Thus we are of the view that the amounts of Rs. 7,10,240/- and Rs. 3,42,309/-will have to be added to the gross profits of the Company while calculating the allocable surplus. The amount of Rs. 1,80,288/-is not liable to be so added. As regards the amount of Rs. 1,29,252/- the Tribunal will give opportunity to both the parties to lead distinct evidence on the points indicated in paragraph 6 above and then decide the point according to law. Rule is thus made partly absolute accordingly, with no order as to costs. 11. Coming now to the Company's Writ Petition No. 1301 of 1983 the Company has challenged the Award of the Industrial Tribunal on the following four grounds : (i) Addition to gross profits of Rs. 1,65,184/- relating to development rebate written back; (ii) Reduction of the Company's claim for depreciation from Rs. 25,95,825/- to Rs. 22,50,000/-; (iii) Disallowance of the proper return on paid-up capital and reserves; and (iv) The reduction of set-off by Rs. 9,00,000/-. 12. As regards the development rebate of Rs. 1,65,184/- written back, it is the Company's contention that in the balance-sheet it has shown it towards "development rebate written back". After addition of the items, namely, surplus as per the profit and loss account, provision no longer required, profit for the year brought down and development rebate written back, the total amount shown is Rs. 38,88,115/-. Both the Union and the Company have taken the net profit at Rs. 33,81,048/-. This net profit does not include the sum of Rs. 1,65,184/-. However the Union has added back the said sum to the net profit. It is contended on behalf of the Company that the development rebate written back and credited to the profit and loss account is required to be deducted while calculating gross profit for the purpose of Bonus in view of item 6(P) of the. Second Schedule to the Bonus Act. The Company had already credited the said amount of development rebate written back to profit and loss appropriation account and hence there is no question of adding back the said amount to net profit. The Tribunal had done so on grounds of equity, but the Payment of Bonus Act does not recognise the said ground for adding back the development rebate. The Tribunal had done so on grounds of equity, but the Payment of Bonus Act does not recognise the said ground for adding back the development rebate. As against this, the contention of the Union is that development rebate written back has to be added to the gross profits in view of the fact that this amount was in previous years deducted as a prior charge u/s 6(b) of the Bonus Act. When therefore it is disallowed or unutilized and hence has to be written back, it must be added back to the profits. According to the Union, the Company is deliberately creating confusion between the expression "development rebate" used in Section 6(b) and item 2(d) of the Second Schedule to the Act on the one hand and that used in item 6(f) of the said Schedule on the other. 13. We are in agreement with the Union. It is not disputed by the Company that the amount in question viz. Rs. 1,65,184/- represents the "development rebate written back" i.e. the authorised development rebate which was deducted from the profits in the earlier years under the Section 6(b) of the Act and which was then allowed by the Income tax Department. This is therefore not an amount representing the excess provisions of previous accounting years relating to development rebate within the meaning of item 6(f) of the Second Schedule of the Act which was disallowed by the Income tax Department and had to be "written back". This is precisely the finding given by the Tribunal and we see no reason to interfere with the same. We are on the other hand of the view that the Company is confusing the distinct items. This amount has legitimately to be added to the profit because in the previous years it was deducted as a prior charge u/s 6(b) of the Act and the workmen were to that extent deprived of the said amount for the purpose of calculating their Bonus. Now that the amount has remained unutilised, it has to go back to the profits and the workmen are entitled to the benefit of the said amount. 14. Coming to the next grievance of the Company, namely, that the Tribunal had reduced its claim for depreciation from Rs. 25,95,825/- to Rs. 22,50,000/-, the grievance is two-fold. Now that the amount has remained unutilised, it has to go back to the profits and the workmen are entitled to the benefit of the said amount. 14. Coming to the next grievance of the Company, namely, that the Tribunal had reduced its claim for depreciation from Rs. 25,95,825/- to Rs. 22,50,000/-, the grievance is two-fold. The first grievance is that the Tribunal had not taken into account the extra shifts worked by the Company at its Wadala and Hadapsar factories, and therefore, the depreciation claimed by the Company on account of the said extra shifts. The second grievance is that although the Company had claimed depreciation on its buildings at uniform 10% rate, i.e. Rs. 6,48,366/- and also depreciation on ac-count of its two flats held in the Co-operative Societies, the Tribunal had negatived its claim for the same. While we find that the Tribunal has not considered the evidence with regard to the extra shifts worked by the Company at its Wadala and Hadapsar factories although the Company had furnished details of the said workings. We do not find any substance in the contention of the Company on other counts. It was for the Company to prove the nature of its buildings for which the depreciation in question was claimed. Although an opportunity was given by the Tribunal, the Company failed to produce the necessary evidence with the result that the Union was forced to lead its own evidence in that regard. The Tribunal however did not depend only on the evidence by the Union but also took into consideration other facts including the Award of the earlier Tribunal in that behalf and came to its own conclusion and allowed a deduction of Rs. 22,50,000/-. We feel that in the circumstances, the approach of the Tribunal was not erroneous. Even before us, what was relied on behalf of the Company was a lacuna in the evidence of the Union's witness Shri Pandit. The Company produced no evidence of its own to show as to how its buildings were entitled to an uniform rate of 10% depreciation when admittedly they did not belong to the same class of construction. It is not disputed that the Income Tax Act and the Rules made thereunder provide different rates of depreciation for different structures. The Company produced no evidence of its own to show as to how its buildings were entitled to an uniform rate of 10% depreciation when admittedly they did not belong to the same class of construction. It is not disputed that the Income Tax Act and the Rules made thereunder provide different rates of depreciation for different structures. Hence it was for the Company to produce the necessary evidence justifying its claim for uniform rate of 10%. It must be remembered in this connection that the Tribunal had on the application of the Union given a direction to the Company to produce relevant documents and information, particularly the list of the assets and the written down value of such asset worked out from year to year. The Company having failed to do so, the Tribunal did the next best, namely, to arrive at its own conclusion which cannot be said to be erroneous as it is supported by the material on record and cogent reasons. We therefore feel that this part of the Tribunal's Award is unassailable. 15. The Tribunal has further rightly disallowed depreciation to the Company for the two flats held by it on ownership basis in two different co-operative societies. The Tribunal has relied upon the Award of the earlier Tribunal dealing with this question it is pointed out that the monthly charges the Company pays for the said two flats include also charges towards depreciation of the flats. All the said charges are included in the expenses of the Company and are shown as such in the balance-sheet. Hence no separate depreciation was necessary to be deducted on account of the said flats. We are in agreement with this finding of the Tribunal. 16. Thus while we disallow the submission of the Company on the depreciations for its buildings and the two flats in the co-operative societies, we direct the Tribunal that it should take into consideration the material produced by the Company for the extra shifts the Company's factories worked at Wadala and Hadapsar during the relevant period and calculate the depreciation in respect of the said two factories on that basis. 17. The third grievance of the Company is with regard to the return on capital and reserves. 17. The third grievance of the Company is with regard to the return on capital and reserves. It is the Company's grievance that while calculating the return on capital and reserves the Tribunal has acted in contravention of Section 6 of the Act since the Tribunal has not given any return on the capital and reserves of its foreign establishments. We are of the view that this submission of the Company is against the law laid down on the subject by the Supreme Court particularly in its decision in D.C.M. General Mills Company v. Workman (1971 (1) LLJ 539). For the purposes of the Bonus Act, the capital and reserves of the Indian establishments have to be separated from these of the foreign establishments. However, the Company has in its balance-sheet shown the figures of capital and reserves of the Company as a whole including its foreign establishments. The balance-sheet is prepared for the Company obviously to satisfy the requirements of the Companies Act. For the purposes of the Bonus Act, the capital and reserves shown in the said balance-sheet have to be split before returns on the same were worked out for the purposes of the Bonus Act. The Tribunal has therefore acted correctly by not taking the entire capital and reserves for calculating the returns thereon. We do not see how the Company can find fault with such calculation made by the Tribunal. We therefore feel that we are not called upon to interfere with the finding given by the Tribunal on the returns due to the Company on its capital and reserves so far as the calculations for the bonus of its employees in the Indian Establishments are concerned. 18. The sum and substance of the last contention of the Company viz. with regard to the set-off is that the Tribunal has not accepted the correctness of its set-off and set-on calculations as shown in its register and has reopened the bonus calculations made for the previous years in respect of which there was no dispute. The Company has found fault with the Tribunal for taking Rs. 95,341/- as a set-off for the previous year ending 31st June 1973 instead of the amount shown by the Company in its set-off and set-on register which is more by a sum of Rs. 9,00,000/-. We are afraid that this contention of the Company is also misconceived. The Company has found fault with the Tribunal for taking Rs. 95,341/- as a set-off for the previous year ending 31st June 1973 instead of the amount shown by the Company in its set-off and set-on register which is more by a sum of Rs. 9,00,000/-. We are afraid that this contention of the Company is also misconceived. The Tribunal was not bound to accept the set-off and set-on shown by the Company in its own bonus register. The said amounts are obviously according to the Company's own calculations. These figures are admittedly not arrived at after making calculations on the basis of the decisions of the Industrial Tribunals in bonus disputes for previous years. The figures shown by the Company in its bonus register have to change corresponding to the decisions of the Tribunals. It also further appears that in fact this position was accepted by the Company at one time, as indeed it has to. In Ex.C-7 filed before the Tribunal, the Company had stated in terms. "Set-on and or set-off provisions: The Company respectfully submits that since the awards in respect of previous years' bonus dispute are subject matters of appeals in the Hon'ble Supreme Court, and High Court, Bombay, there is no question of any alterations in the entries in the bonus registers at this stage till the appeals are decided, and the Company will give effect to the decisions in the appeal as and when decided". The Industrial Tribunal consisting of Shri Bora which disposed of the reference relating to bonus for the previous year 1972-73, had worked out the amount of set-off and given its award accordingly. That award of March 31, 1979 has not been challenged by the Company, and therefore, it is binding on it. Hence the set-off as worked out in the said award is certainly binding on the Company, and that set-off amount is Rs. 95,341/- which is disputed by the Company in the present proceedings, we fail to understand as to how the set-off amount worked out in the unchallenged award and as at the end of the previous year, i.e. 1972-73 can be challenged by the Company in the present proceedings. The present Tribunal while giving its award for the year in dispute, namely, 1973-74 has rightly accepted the said amount of Rs. 95,341/- as set-off and done nothing more. The present Tribunal while giving its award for the year in dispute, namely, 1973-74 has rightly accepted the said amount of Rs. 95,341/- as set-off and done nothing more. In fact, it is the Company by challenging the said set-off amount which is trying to reopen the findings of the earlier Tribunal We therefore find no substance in the Company's grievance in this connection. 19. The result therefore is that except for the failure of the Tribunal to calculate depreciation on the basis of the extra shifts which are allegedly worked at the Company's factories at Wadala and Hadapsar, we find no substance in the Company's challenge to the Tribunal's award. We therefore allow the Company's Writ Petition No. 1301 of 1983 only to this limited extent and direct the Tribunal to make the Bonus calculations by taking into consideration the depreciation on the basis of the extra shifts if any which Company's factories at Wadala and Hadapsar were working during the year in question, and dismiss the petition on all other grounds. The parties will be at liberty to lead evidence on the point. Rule absolute partly accordingly with no order as to costs. In the Union's petition we have given direction to the Tribunal to allow the parties to lead evidence on the foreign tour expenses. Similarly both the parties will have an opportunity to lead their evidence in respect of the extra shifts which are allegedly worked at the Company's factories at Wadala and Hadapsar.