K.N.WANCHOO, J.

(1) THESE two appeals by special leave arise out of the same award of the Second Industrial Tribunal, West Bengal and will be dealt with together. The two appeals are by two unions of workmen of the Titaghar Paper Mills Co., Titaghar No. 1 and the Titaghar Paper Mills Co. Kankinara No. 2. The two mills have been treated as one establishment and are under one management. So the Government of West Bengal referred the dispute between the mills and the unions for profit bonus for the years 1955-56, 1956-57, 195758 and 1958-59 to the tribunal for determining the quantum of bonus for each year and the method of its distribution amongst different categories of workmen including temporary hands.

(2) THE tribunal went into the matter and came to the conclusion after the application of what is known as the Full Bench formula evolved by the Labour Appellate Tribunal in 1950 and approved by this Court in the Associated Cement Companies Ltd. v. Its Workmen (1), that there was no surplus in any of the four years for the grant of bonus and therefore rejected the claim of the workmen. The two appeals are by the two unions against this award.

(3) THE contention of the workmen is that the tribunals conclusion that there was no available surplus in any of the years is incorrect and four points have been urged in this connection to show how the tribunal went wrong. These points are : (1) The tribunals calculation of gross profits for the years 1956-57 was wrong; (2) The tribunal went wrong in the matter of calculation of income-tax for all the four .years; (3) The tribunal went wrong in the matter of calculating working capital for all the four years; and (4) The tribunal went wrong in calculating rehabilitation for all the four years. We shall deal with these points one by one.

(4) RE. (1). The contention in this behalf is that for the year 1956-57 the mills revalued their stock of raw materials, chemicals and dyes etc. as well as general stores, machine furnishings etc. and paper stock as well as coal stock. This revaluation resulted in an increase of Rs. 38,81,618.00 in the value of these things as on April 1, 1956. This increase in value was reflected in the consumption of raw materials, general stores and coal and in the sale of paper with the result that the profit-and-loss account showed inflated figures in terms of money on the basis of this revaluation, though in actual fact this amount was not spent, the increase being merely due to a paper entry on account of revaluation. Therefore it is said that as the tribunal ignored this aspect of the matter it did not correctly calculate the gross profits for the year 1956-57. The tribunal in this connection relied on the judgment of this Court in the Tata Oil Mills Co. Ltd. v. Its Workmen, (1), and said that if there had been any addition to the profit on account of an increase in the value of the stock, that would be an extraneous profit for which no credit could be claimed by the workmen and such extraneous profit could not be taken into account in calculating the available surplus. It is urged on behalf of the appellants that the tribunal was in error in applying the principle laid down in the Tata Oil Mills Cos case (1), to the facts of this case.

(5) THERE is in our opinion force in this contention. It is true that in The Tata Oil Mills case (1), the profit of rupees three lacs which arose merely on account of a change in the method of accounting was treated as extraneous income; but the judgment of that case does not show that the result of the revaluation was that increased value was taken into account in the matter of consumption of raw materials etc. The tribunal overlooked this fact when it proceeded to apply the ratio in the Tata Oil Mills case (1), to the facts of the present case. It has however been urged on behalf of the respondent that there is a contra-entry in the profit-and-loss account and that shows that t