Judgment :- K. A. THANIKKACHALAM J. At the instance of the Department, the Tribunal referred the following questions for the assessment years 1972-73 to 1975-76 for the opinion of this court under section 256(1) of the Income-tax Act, 1961 "1. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the sums claimed as monetary value of unavailed leave should be allowed as deduction in computing the total income of the assessee for the assessment years 1972-73 to 1975-76? (R. A. Nos. 442 to 445) 2. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the assessee is entitled to the deduction of Rs. 1, 18, 216 being the recoverable bonus paid to the employees written off in the assessment year 1974-75? (R. A. No. 444) 3. Whether, on the facts and circumstances of the case, the Tribunal was right in holding that the payments made to the employees under the Voluntary Retirement Scheme are admissible deductions in computing the total income of the assessee for the assessment years 1974-75 and 1975-76 ? (R. A. Nos. 444 and 445)" * In so far as question No. 1 is concerned, when the tax case came up for hearing, learned standing counsel for the Department said that he is not pressing the same. Accordingly, no answer is rendered thereon In so far as question No. 3, is concerned, it relates to assessments of 1974-75 and 1975-76 in the matter of payments made to the employees under the Voluntary Retirement Scheme. The point for consideration is whether such payment is admissible as deduction in computing the total income of the assessee for the assessment years under consideration. A similar question came up before this court, in the case of CIT v. George Oakes Ltd. wherein this court held that when the payment is made for the purpose of retrenchment of workers it was for the purpose of reducing the staff and to bring about a reduction in the wage bill as well. A similar question came up before this court, in the case of CIT v. George Oakes Ltd. wherein this court held that when the payment is made for the purpose of retrenchment of workers it was for the purpose of reducing the staff and to bring about a reduction in the wage bill as well. Therefore, these were matters of management pertaining to business considerations and expediency and the expenditure incurred by the assessee in this regard was for purposes of business and also with a view to maintain good relationship with the labour and that expenditure had to be considered as having been laid out wholly and exclusively for business purposes of the assessee. Therefore, it is deductible. A similar view was also taken by this court in a decision in CIT v. Sri Ramavilas Service Ltd. A similar view was also taken by this court while rendering its decision in T. C. No. 267 of 1983 (CIT v. Simpson and Co. Ltd. (No. 1) in the case of the same assessee, dated June 10, 1996. Accordingly we answer question No. 3 in the affirmative and against the DepartmentSo far as question No. 2 is concerned, it relates to deduction of Rs. 1, 18, 216 being the recoverable bonus paid to the employees written off in the assessment year 1974-75. This sum had been paid as advance to the assessee's employees on October 11, 1971, under the agreement dated October 6, 1971, with the stipulation that it would be recovered subsequently. The assessee submitted that the matter was later discussed with the union and it was agreed not to recover the same in order to maintain good industrial relations. It was resolved at the meeting of the board of directors of the assessee-company, held on December 31, 1973, to adjust the above amount to bonus paid account in the financial year 1974-75. However, the Income-tax Officer rejected the claim made by the assessee for deduction. On further appeal, the Commissioner (Appeals) allowed the claim following the decision of the Tribunal in ITA No. 828 (Mad) of 1977-78 on a similar question in this group of cases. However, the Income-tax Officer rejected the claim made by the assessee for deduction. On further appeal, the Commissioner (Appeals) allowed the claim following the decision of the Tribunal in ITA No. 828 (Mad) of 1977-78 on a similar question in this group of cases. On further appeal, the Tribunal, following its earlier order dated April 28, 1978, in ITA No. 828 (Mds.) of 1977-78 in the case of Higginbotham Ltd., Madras, confirmed the view taken by the Commissioner of Income-tax (Appeals) Before us, learned standing counsel appearing for the Department submitted that in the present case unless the assessee satisfies the provisions contained under section 36(1)(ii) of the Act, it is not possible to allow the bonus payment in its entirety. Learned counsel also pointed out that there is no definite finding given by the Tribunal as to whether the bonus paid would satisfy the provisions of the Payment of Bonus Act. For this reason, it was stated that a direction should be given to verify whether the bonus payment made would satisfy the provisions of section 36(1)(ii) of the Act. Learned standing counsel for the Department relying upon an earlier decision of this court in T. C. No. 1080 of 1980 (CIT v. Wheel and Rim Co. of India Ltd. submitted that the above said decision would govern the present case also. But it remains to be seen that the abovesaid decision of this court is distinguishable on the facts. According to the facts arising in T. C. No. 1080 of 1980 there was a resolution by the board of directors not to recover the amount paid by way of recoverable bonus earlier. But, at the same time, in the above resolution, it was also resolved to adjust the above amount to bonus paid account in the accounts for the current financial year. Therefore, what was paid earlier was treated as payment made in the current financial year. It is under those circumstances, this court held that the payment is only bonus and not loan. Inasmuch as there is no finding by the Tribunal as to whether the payment of bonus was in accordance with the provisions contained in section 36(1)(ii) of the Act, this court directed that the assessee must satisfy the provisions contained under section 36 of the Act in order to get deduction. Inasmuch as there is no finding by the Tribunal as to whether the payment of bonus was in accordance with the provisions contained in section 36(1)(ii) of the Act, this court directed that the assessee must satisfy the provisions contained under section 36 of the Act in order to get deduction. But, on the facts, the abovesaid decision is distinguishable, since, in the present case, the Tribunal categorically held that the facts arising in the present case are similar to the facts arisen in Higginbotham Limited. Therefore, we consider this line of argument advanced by learned standing counsel holds no water. On the other hand, learned counsel appearing for the assessee submitted that a similar issue came up for consideration before the Tribunal in the case of Higginbotham Limited, Madras. There also, after satisfying that the bonus payment was in accordance with the provisions of section 36(1)(ii) of the Act, the Tribunal allowed the bonus payment as deduction. According to the Tribunal, since the facts arising in the present case are similar to the facts arising in the case of Higginbotham Limited, Madras, it came to the abovesaid conclusion. It was, therefore, pointed out that it is after satisfying that the payment made by way of bonus was in accordance with the provisions of section 36(1)(ii), the Tribunal confirmed the order passed by the Commissioner of Income-tax in allowing the bonus payment as a deductionWe have heard learned counsel appearing for the assessee as well as learned counsel appearing for the Department. While allowing the bonus payment of Rs. 1, 18, 216, the Tribunal followed an earlier decision of this court in the case of Higginbotham Limited, Madras. According to the Tribunal, a similar issue as arising in the present case, came up for consideration before it, in the case of Higginbotham Limited, Madras. It would mean that the Tribunal would have verified that the bonus payment was in accordance with the provisions contained in section 36(1)(ii) of the Act. Even though there is no definite finding by the Tribunal that the bonus payment was allowable as deduction under section 36(1)(ii) of the Act in the present cases inasmuch as according to the Tribunal the facts arising in the present case as well as in the case of Higginbotham Limited, Madras, are similar, it came to the abovesaid conclusion. Even though there is no definite finding by the Tribunal that the bonus payment was allowable as deduction under section 36(1)(ii) of the Act in the present cases inasmuch as according to the Tribunal the facts arising in the present case as well as in the case of Higginbotham Limited, Madras, are similar, it came to the abovesaid conclusion. Under such circumstances, we are of the opinion that the Tribunal would have satisfied that the bonus payment in the present case is in accordance with the provisions contained in section 36(1)(ii) of the Act. Accordingly, we answer this question also in the affirmative and against the Department. There will be no order as to costs.