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2015 (4) TMI 266 - HC - Income TaxDisallowance u/s 40A(2)(b) - huge salary paid to Mr. R.S.Saluja vis-avis the profits & turnover of the firm as well as average salary being paid to the management personnel by its group company, i.e. SEL Manufacturing Ltd. which has more than 13 times the turnover than the assessee firm - ITAT deleting the disallowance - Held that:- The said person is successfully running the business of the group which had a return of more than thousand crores, on account of his experience. The main company he had established way back in 1969 and due to his experience of over four decades, he had also been able to help the respondent/assessee concern to achieve the sale level of ₹ 48 crores. Merely because the company was, at present, earning low monthly taxable profits, would not be a ground, as such, to disallow the salary to the tune of ₹ 2 lacs per month, which Shri R.S.Saluja was being paid, keeping in view his background, experience and therefore, it cannot be said that he was a man of straw. The CIT and the Tribunal both have recorded a finding that it is not that the said person was taxed at a lower rate than that of the assessee-firm and therefore, they had correctly held that the AO could not substitute the wisdom of the partners of the firm to hold that the salary was excessive and unreasonable. The findings which have been recorded are purely on facts arising out of the peculiar circumstances of the case and no question of law, as such, arises out of the facts of the case which would require adjudication as has been sought to be contended. - Decided against revenue.
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