J. K. SYNTHETICS LTD. vs J. K. SYNTHETICS MAZDOOR UNION

The Supreme Court held that dividends received by a company from investments of paid-up capital cannot be classified as extraneous income under the Bonus Act, 1965, and thus should not be deducted from gross profits when calculating available surplus for bonus distribution. The Court upheld the Tribunal's decision to disallow the management's claim for deduction of Rs. 4.1 lakh as extraneous income, affirming that the return on paid-up capital is a valid prior charge. The Court also ruled that the Tribunal's computation of the annual share required for rehabilitation was justified, leading to a final bonus payment of Rs. 1,21,000 to the workers.