Ismail, J.
1. The dispute regarding the quantum of the bonus payble to the workers of the petitioner for the year 1964-65 was referred to the labour court, Coimbatore, by the Government of Madras in G.O. Ms. No. 78, Industries Labour and Co-operation (Labour), dated 6th January, 1966. The labour court, Coimbatore, by its award dated 30th July, 1966, made in Industrial Dispute No. 1 of 1966 held:
The workers are, therefore, entitled to bonus at the rate of 20 per cent of the total earnings. The amount received by them as advance may be deducted and the balance shall be paid to them.
2. It is to quash this award of the labour court, the petitioner has filed the present writ petition under Article 226 of the Constitution of India.
3. Mr. M.R. Narayanaswatny, learned Counsel for the petitioner, confined his attack on the award of the labour court principally to two items, the first item being an addition of a sum of Rs. 9,000 to the net loss returned as per profit and loss account as held in paragraph 9 of the award and an addition of a sum of Rs. 20,727.53 as held by the labour court in paragraph 10 of the award. For the purpose of understanding the contention of the learned Counsel it is necessary to refer to one important feature, namely, that both the parties before me agree that the provisions of the Payment of Bonus Act are applicable to the determination of the dispute before the labour court. Under Section 4 of that Act, the gross profits derived by an employer from the establishment in respect of any accounting year in the case of any person other than a banking company shall be calculated in the manner specified in the second schedule. The second schedule to the Act states that to the net profit as per the profit and loss account certain items should be added back. One such item, shown in the second schedule, is item 3(d) which is as follows:
Capital expenditure (other than capital expenditure on scientific research which is allowed as a deduction under any law for the time being in force relation to direct taxes) and capital losses (other than losses on sale of capital assets on which depreciation has been allowed for income-tax or agricultural income-tax).
4. Obviously it is with reference to this particular heading the two amounts of Rs 9,000 as well as Rs. 20,727-53 have been added back to the net loss of Rs. 19,605 as was shown in the profit and loss account.
5. As far as the addition of Rs. 9,000 is concerned Mr. Doha, appearing for the second respondent, very frankly and fairly conceded that he cannot place his finger on any material before the labour court on the basis of which the addition of Rs. 9,000 can be justified. As a matter of fact with reference to this figure, there seems to be real confusion on the part of the labour court while it added this figure. In paragraph 9 of the award, the labour court pointed out that under Clause 3, the management had included a sum of Rs. 6,000 towards the head remuneration and the workers union statement also contained this item and there was no dispute over that amount and both the parties before me had said that that amount was liable to be added back. It is in dealing with this sum of Rs. 6,000 the labour court refers to a sum of Rs. 9,000 to be added back under the head of capital expenditure. As I pointed out already Mr. Doha very fairly conceded before me that there was absolutely no justification whatever on the part of the labour court to add this sum of Rs. 9,000. Consequently, the addition of the sum of Rs. 9,000 by the labour court to the net loss returned by the petitioner cannot be sustained.
6. As far as the addition of the sun of Rs. 20,727 53 is concerned, this amount has been shown as 'interest payments' in the trading and profit and loss account for the year ending 31st March, 1965, filed as exhibit M-1 before the labour court. With reference to this amount, in paragraph 10 of the award, the labour court observed:
A sum of Rs. 15,266 was shown as interest payment for the year ending 31st March, 1964, as per exhibit M-1. This sum has been added back for the purpose of calculation of bonus for the year 1963-64. On the same basis the sum of Rs. 20,727-53 p. shown as interest payment in the accounting year as per exhibit Ml has to be included in Clause 2 of second schedule. This has been omitted in the statement filed by the management.
7. With reference to the statement of the labour court, I have to observe that it is difficult to see how this sum of Rs. 20,727-53 can fall under Clause 2 of second schedule to the Act at all. Clause 2 of the second schedule to the Act provides for adding back of (a) bonus to employees; (b) depreciation; (c) direct taxes, including the provision (if any) for previous accounting years, (d) development rebate, development allowance reserve and (e) any other reserves; Obviously, 'interest payments' cannot fall under any one of these five categories in Clause 2 of second schedule.
8. Mr. Dolia sought to sustain this addition only on one basis, namely, the concession with regard to a similar amount said to have been made before the labour court with reference to the dispute for the earlier year and he contended that it is on the basis of this concession this amount was added back. I must make it immediately clear that Mr. Dolia did not attempt to justify the addition of Rs. 20,727,53 under any of the heads of either Clause 2 or Clause 3 of second schedule to the Act and the only contention of the learned Counsel is that in a dispute between the same parties in relation to the previous year, on behalf of the management it was conceded that a similar amount was liable to be added back under the head of 'capital expenditure' and in view of that concession, the labour court was perfectly justified in adding back the sum of Rs. 20,727.53 for the year in question as well. I am unable to accept this contention of the learned Counsel for more than one reason. In the first place, the award relating to the previous year was the subject matter of Writ Petition No. 1725 of 1966 on the file of this Court and in an order just now dictated, I have quashed that award for 1963-64 on the basis that Section 33 of the Payment of Bonus Act was held to be discriminatory and unconstitutional by the Supreme Court. With reference to that award, in paragraph 9, the labour court had stated that the management opposed the inclusion of these two items, but at the time of arguments it was conceded by the management that the remuneration and interest payment of Rs. 15,266 were to be included towards capital expenditure. Whether such a concession was made or not was the subject matter of the dispute in that writ petition. A. Duraiswamy, proprietor of the petitioner concern, who filed the affidavit in support of the writ petition, has stated that no concession was ever made and in support of that allegation, one Stanley Victor, who represented the petitioner before the labour court, had filed an affidavit, that Stanley Victor, who was the secretary of the Madras Factory Owners Association, of which the petitioner is a member, has stated in his affidavit that he appeared before the labour court, Coimbatore, in Industrial Dispute No. 55 of 1966 and conducted the proceedings on behalf of the petitioner and the statement contained in paragraph 9 of the award of the lahour court was not correct and be did not make any such concession. In the counter-affidavit filed by one K.S. Venkataraman, who was the secretary of the second respondent's Sangam and who represented the second respondent before the labour court, he had not expressly and categorically refuted this statement of either Duraiswamy or Stanley Victor. In view of this controversial aspect of the matter, I am of opinion, it is not safe for the labour court to proceed on the basis of any concession stated or alleged to have been made by any of the parties before it, particularly with regard to the sum in question. Secondly, even assuming that such a concession was made for the year 1963-64, I am of the view that it is not open to the labour court to act upon that concession for the year 1964-65 in Industrial Dispute No. 1 of 1966, which was a separate and independent proceeding, without giving an opportunity to the petitioner either to proceed on the basis of the concession said to have been made with reference to the earlier year in Industrial Dispute No. 55 of 1966 or to proceed on a different basis, particularly when the petitioner has omitted to include the amount of Rs. 20,727.53 to the available surplus in its statement filed before the labour court. Thirdly, I am of opinion, that in matters of this nature, which is not purely one of fact, but which has reference to statutory provisions, it is the duty of the labour court to record a finding of its own as to the particular head of Schedule 2 under which a particular item falls before that amount can be added back to the available net profits. It should not be forgotten that the labour court, while determining the quantum of the bonus payable to the workers is applying the statutory provisions contained in the Payment of Bonus Act and, therefore, before adding any particular item to the net profits as shown in the profit and loss account, the labour court must first give a finding as to which of the clauses in Schedule 2 the particular item falls under before it can be added to the net profits as shown in the profit and loss account. The labour court has failed to do that in this particular case. As I pointed out already, the labour court, on the other hand, proceeded as if the sum of Rs. 20,727.53 falls under Clause 2 of Schedule 2 to the Act and I have already shown that this amount cannot fall under any one of the 5 heads of Clause 2 of Schedule 2.
9. There is one further consideration that will have to be borne in mind. Exhibt M-1 is the trading and profit and loss account for the year ending 31st March, 1965, prepared for the purpose of income-tax, by a chartered accountant. The provisions contained in Section 23 read with Section 25 of the Payment of Bonus Act make it clear that the labour court may presume the statements and particulars contained in such profit and loss account to be accurate and it shall not be necessary for a person like the petitioner to prove the accuracy of the statements and particulars by filing an affidavit or by any other mode. In view of this statutory provision, if the second respondent wanted to contend that the sum of Rs. 20,727.53 did not actually represent the interest payment deductible for purposes of income-tax, and is an amount addable to the net profit under any of the provisions of the second schedule to the Act, the burden was on the second respondent to establish the same and invite the labour court to add back that amount. In this case no evidence whatever on behalf of the second respondent was let in before the labour court and no attempt whatever was made by the second respondent before the labour court to disprove the correct' ness of the statement in exhibit M-1 and to justify the adding back of this figure to the net profits disclosed in exhibit M-1. Under these circumstances, I am of opinion, that there is absolutely no justification whatever for adding back this sum of Rs. 20,727.53 to the net loss returned by the petitioner. la these circumstances, in my judgment the award of the labour court cannot be sustained and it has to be quashed and is accordingly quashed. It is conceded by both the parties before me that if these two sums, namely, Rs. 9,000 and Rs. 20,727.53 were not added back, there will not be available surplus to justify the payment of 20 per cent, bonus awarded by the labour court and the second respondent will be entitled to only the minimum 4 per cent, bonus as provided for by Section 10 of the Payment of Bonus Act. In view of this admission of both the parties to this effect, it is unnecessary to remand the case back for a fresh consideration by the labour court. There will be no order as to costs.