JUDGMENT - B.N. SRIKRISHNA, J. :---This writ petition challenges an Award of the Industrial Tribunal , Maharashtra, Bombay, made in Reference (IT) No. 149 of 1979, by which the demand for the maximum bonus of 20% for the accounting year 1976-77 was rejected. 2. The petitioner is a registered trade union of the workmen employed in the second respondent-factory at Sewree. The second respondent is a company which manufactures tyres, tubes and allied products. 3. The second respondent declared and paid the minimum bonus of 8.33% of the annual earning/salary during the accounting year 1976-77. The petitioner, being dissatisfied therewith, raised an industrial dispute that all the workmen should be unconditionally paid bonus at the rate of 20% of their annual earing/salary for the said accounting year. Failing a settlement between the parties, and consequent upon the failure of the conciliation proceedings, the appropriate Government referred the said demand for adjudication of the Industrial Tribunal. The parties filed their respective calculations of bonus, including the running account of the set on and set off, as required under section 15 of the Payment of Bonus Act, 1965. (here in after referred to as "the Act"). The balance sheet and profit and loss account for the relevant accounting year were also placed on record. The principal contention of the Petitioner-union before the Tribunal was that the second respondent had revalued its assets twice, once in the year 1961 and, again, in the year 1971, and consequent upon such revaluation, a reserve equivalent to the excess amount was created in the balance-sheet of the company. In the bonus calculations submitted before the Tribunal, an amount of Rs.10,82,000/- equivalent to 6% of the Reserves and Surplus at the beginning of the accounting year, was claimed as the legitimate deduction under section 6(d) read with item 1 (iii) of the Third Schedule of the Act. This was objected to by the petitioner-union on the ground that the reserve was a fictious book entry, which did not represent any additional money's value or asset in the hands of the second respondent-company during the relevant accounting year, and, therefore, it ought not to be legitimately treated as a 'reserve' and that the return at 6% under Item 1 (iii) of the Third Schedule read with section 6 of the Act, should be disallowed. In support of this contention, the petitioner-union produced the certificate of a practising Chartered Accountant, one H.V. Trivedi. The said Trivedi was also examined before the Tribunal. 4. In his certificate, the said Trivedi has asserted that, consequent upon the revaluation of the assess, an equivalent amount had been "fictitiously" created by way of capital reserves in the books of account, and that, thereby, the workmen had been deprived of two advantages: First, by way of an increased amount of reserves claiming a larger deduction at the statutory rate, and second, an increased amount of depreciation had been claimed towards expenditure debited to the profit and loss account. He calculated that an amount of Rs. 84 lacs had been wrongly adjusted towards the return on reserves and a further amount of Rs. 80,000/- had been wrongly claimed towards depreciation. Thus, according to him, a total amount of Rs.1,64,00,000/- per year had been wrongly claimed as a deductible item in the calculation of the allocable surplus of the year, including the accounting year in question. Despite this bold assertion both in his certificate and in his examination-in -chief before the Tribunal the said Trivedi had to admit under cross-examination that depreciation under the Income tax Act could not be claimed on revalued figure of capital assets but was claimable only with respect to the written down value of the assets. He also admitted: "...It is well settled practice of accountancy to revalue the assets and in case of appreciation to show the appreciated value as capital reserves. This is also required as per the provisions of the Company's Law." Finally he was forced to admit that the statement in his report that extra depreciation to the extent extent of Rs. 80,000/- had been claimed by the second respondent was not correct. The Tribunal considered the material on record, and, in the light of two judgements of the Supreme Court cited, to which reference will be made hereinafter, look the view that there was nothing erroneous in the calculation of bonus made by the second respondent, and that the said calculations were strictly in accordance with the provisions of the Act. The Tribunal held that, for the concerned accounting year 1976-77, the workmen not entitled to more than the minimum bonus of 8.33%. Consequently. the demand for 20% bonus was rejected. Hence, the present petition to impugn the said award. 5. Dr. The Tribunal held that, for the concerned accounting year 1976-77, the workmen not entitled to more than the minimum bonus of 8.33%. Consequently. the demand for 20% bonus was rejected. Hence, the present petition to impugn the said award. 5. Dr. Kulkarni, learned Counsel appearing for the petitioner-union, contended that the Tribunal erred in not properly appreciating the law laid down by the Supreme Court in (Titaghur Paper Mills Company Ltd. v .Its Workmen)1, (1959) II L.L. J. 9 and that the Tribunal has misconstrued the observations of the Supreme Court in its decision in (Metal Box Company of India Ltd.v.Their Workmen and vice versa)2, (1969) II L.L.J. 785. In his submission, the reserves created consequent upon revaluation of the assets were really fictitious additional wealth or money in the hands of the employer. Therefore, there could be no justification for claiming a deduction of 6% on the said sum under section 6(d) read with Item 1(iii) of the Third Schedule to the Act. In his submission, a reference to the report of the Bonus Commission more than apply justified the contention. The Tribunal having misapplied the law, the award was vitiated and deserved to be interfered with. 6. It is difficult to accept the contention of Dr. Kulkarni. Though the judgement of the Supreme Court in Titaghur Paper Mills Co. Ltd.(supra) was strongly relied upon by the learned Counsel, I find nothing therein which would be of assistance in deciding the present case. The only relevant passage relied upon by the learned Counsel pertains to the discussion with regard to return on reserves used as working capital, Prior to the coming into force of the payment of Bonus Act. 1965, bonus was an industrial demand adjusticated in accordance with what was popularly known as the Labour Appellate Tribunal Formula, which was confirmed with some modifications by the Supreme Court in its celebrated decision in the case of (A.C.C.Ltd. v. Workmen)3, (1959) I L.L.J. 644. The formula required that, after ascertaining the gross profit, several items of prior charge had to be deducted therefrom for arriving at the available surplus of bonus for distribution to workmen. One such deductible items, inter alia, was an item with regard to return on reserves used as working capital. The formula required that, after ascertaining the gross profit, several items of prior charge had to be deducted therefrom for arriving at the available surplus of bonus for distribution to workmen. One such deductible items, inter alia, was an item with regard to return on reserves used as working capital. This was an area of controversy, which dogged adjudication of Bonus disputes, as it involved proof and also adjudication on the part of the Tribunal as to the rate at which such deduction was permissible. The Scheme of the payment of Bonus Act cuts through this controversy and has simplified the formula for calculation of Bonus. 7. The Scheme of the Act is that gross profits derived by an employer from the industrial establishment have to be calculated in accordance with section 4. Section 4 provides that, in the case of banking company, the gross profits shall be calculated in the manner prescribed in the First Schedule to the Act, while, in the case of other companies, the gross profits shall be calculated in the manner indicated in the Second Schedule. We need not dwell upon the details of the Second Schedule, as there is no dispute regarding the manner of calculating gross profits. After Ascertaining the gross profits, section 6 provides that the sums specified in clauses (a) to (d) shall be deducted therefrom as prior charges for the purpose of arriving at the available surplus computed under section 5. After arriving at the available surplus, 60% thereof is to be treated as "allocable surplus" within the meaning of section 2(4), from out of which bonus is distributed. 8. Since the controversy in the present case revolves round one specific item of the deductible prior charge under section 6, we may concentrate thereupon. section 6(d) provides that such further sums as are specified in respect of the employer in the Third Schedule are deductible from the gross profits. Item 1(iii) of the Third Schedule to the Act provides, in the case of the company other than a banking company, that "6 per cent of its reserves shown in its balance-sheet as at the commencement of the accounting year, including any profits carried forward from the previous accounting year..."shall be deductible under section 6(d) of the Act. Item 1(iii) of the Third Schedule to the Act provides, in the case of the company other than a banking company, that "6 per cent of its reserves shown in its balance-sheet as at the commencement of the accounting year, including any profits carried forward from the previous accounting year..."shall be deductible under section 6(d) of the Act. It is the amount shown in the balance-sheet as a reserve, consequent upon the revaluation of the assets, which is the subject-matter of the controversy before me. 9. It is, therefore, obvious that there is a world of difference between reserves used as capital under the erstwhile Labour Appellate Tribunal Formula and the deductible prior charge under section 6(d) read with item 1(iii) of the Third Schedule of the Act. None of the observations made in connection with the calculation of return on reserves used as working capital on page 25 of the report of Titaghur's case is of assistance or help in deciding the contention raised by Dr. Kulkarni. There is nothing in the observations on page 25 of the report which supports the contention of the learned Counsel. 10. On the other hand, the observations of the Supreme Court in Metal Box Company of India Ltd. v. Their Workmen (supra) are directly to the point and conclude the issue. This was a case which arose under the Bonus Act itself. A contention, similar to the one advanced by Dr.Kulkarni, was also advanced on behalf of the workmen therein. It was contended that a reserve created on revaluation of the assets was " a mere book adjustment and did not add to the wealth of the company, and, though the amount was transferred to the capital reserve, it was not as if any additional amount became available for the company's business", and, therefore, no deduction was permissible on such an artificial amount. The Supreme Court emphatically rejected this argument, and pointed out that creation of such a reserve was not only consistent with accepted principles of commercial accountancy," but was also a requirement under the provisions of the Companies Act, so that the balance-sheet of a company may reflect the true financial affairs of the company. The Supreme Court, therefore, held in no uncertain terms, that such a reserve was a properly created reserve and that the return thereon at the statutory rate was a proper, deductible item. The Supreme Court, therefore, held in no uncertain terms, that such a reserve was a properly created reserve and that the return thereon at the statutory rate was a proper, deductible item. An argument was pressed before the Supreme Court in the Metal Box case that, if such a return was permitted to be deducted at the statutory rate, then, the employer might, mala fide, deflate the gross profits by creating fictitious reserves with the sole purpose of defeating the claims of labour to bonus. Repelling this argument, the Supreme Court observed: "...In the first place, if such an inflation is made mala fide, the tribunal can always reject it. In the second place, it is hardly profitable for a company to resort to such a practice, for, under the Wealth Tax Act the company would be liable to an increased assessment..." Dr. Kulkarni clutched at these observations and submitted that the raison d'etre for the findings of the Supreme Court that reserves created upon revaluation of assets should be treated as reserves properly falling within the description contained in item 1(iii) of the Third Schedule to the Act, was because of the fact that there was a liability to Wealth-tax. He pointed out that, during the relevant accounting year (1976-77), the second respondent was not liable to Wealth-tax. Therefore, the situation contemplated by the Supreme Court did not exist, and the principal reason that the Supreme Court was compelled to treat such a reserve as a properly created reserve being non-existent, the observations of the Supreme Court did not apply in the present case. I am unable to agree. Properly read, this judgment makes it clear that, whenever assets are revalued, it is necessary to create a reserve, which corresponds to the excess value determined as a consequence of revaluation of assets and that it is required both under the accepted principles of accountancy and, particularly, because of the provisions of section 211 of the Companies Act read with Schedule VI thereof. It is not possible to read the judgment in the manner suggested by Dr. Kulkarni or to accede to the submission that this authority does not apply in a situation where the employer-company has no liability towards Wealth-tax in any assessment year. The contention of Dr. Kulkarni on this score is, therefore, rejected. 11. It is not possible to read the judgment in the manner suggested by Dr. Kulkarni or to accede to the submission that this authority does not apply in a situation where the employer-company has no liability towards Wealth-tax in any assessment year. The contention of Dr. Kulkarni on this score is, therefore, rejected. 11. The impugned Award of the Tribunal places, in my view, rightly, reliance upon the observations of the Supreme Court made in the Metal Box case. The Tribunal has correctly held that the reserves created as a consequence of revaluation of assets were reserves properly created and entitled to the statutory deduction under Item 1(iii) of the Third Schedule to the Act. Consistent with this finding, the Tribunal has correctly held that nothing more than the minimum bonus was payable for the accounting year 1976-77 and rejected the demand for 20% bonus. I find no infirmity, no misdirection in law, nor any other vitiating factory in the Award so as to call for interference. 12. In the result, the petition is found to be without substance, and is hereby dismissed. Rule is discharged. However, under the circumstances, there will be no order as to costs. Petition dismissed. -----