EMPLOYERS IN RELATION TO THE MANAGEMENT OFINDIAN CABLE CO. vs THEIR WORKMEN

The Supreme Court held that under the Payment of Bonus Act, 1965, the notional tax liability must be calculated without deducting the bonus from gross profits, as established in Metal Box Co. of India Ltd. v. Their Workmen. The Court ruled that the Tribunal erred in deducting the bonus while computing direct tax and clarified that the ceiling of Rs. 750 under Section 2(13) applies to the calculation of bonus eligibility. The appeal was partly allowed, directing the company to pay the balance bonus due to the workmen.