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2015 (8) TMI 1088 - AT - Income TaxDisallowance under section 40A(2)(b) - According to AO salary paid to Shri Amandeep Kumar was excessive as was only 10th pass and not technically qualified - Held that:- Both the sons of the assessee are doing same job for the assessee and merely because Shri Amandeep Kumar was not technically qualified would not give occasion for the Assessing Officer to disallow the salary substantially. It is not in dispute that the total receipts of the assessee were substantially higher in assessment year under appeal as compared to the preceding year and it is also not in dispute that the salary/wages paid was comparably lower in percentage as was paid in the earlier years. These facts would clearly support the case of the assessee that both the sons of the assessee have been working whole heartedly for the business of the assessee and through their efforts total receipts of the assessee have increased. Therefore, the Assessing Officer has failed to make out a case of any unreasonable payment to the sons of the assessee. However, considering the fact that Shri Amandeep Kumar was not qualified as against the qualification of other son Shri Daniel, it would be reasonable and appropriate to restrict the salary paid to Shri Amandeep Kumar slightly lesser as was given to Shri Daniel because both of them were doing the same job for the assessee. Thus it would be appropriate to allow salary paid to Shri Amandeep Kumar in a sum of ₹ 1,50,000 as against the payment of salary of ₹ 2,25,000, thereby the addition is restricted to ₹ 75,000 only. - Decided in favour of assessee in part. Disallowance of depreciation on crane - Held that:- If the Assessing Officer was having any doubt in his mind regarding the purchase of the crane by the assessee from M/s. Indo Construction, the Assessing Officer should have verified any fact from the seller. The Assessing Officer has failed to note that all the transactions have been done through banking channel and as such, it is unbelievable that the assessee has not purchased the crane in question. The authorities below have also failed to note that after purchase of the crane in question in assessment year under appeal, the total receipts of the assessee from crane business have substantially increased. Therefore, without purchase of the crane in question the receipts of the assessee would not have substantially increased. The Assessing Officer has not doubted the payments by means of account payee cheques and all transactions carried out through banking channels. Therefore, there was no material available with the Assessing Officer to doubt the purchase of crane by the assessee. Thus the assessee has been able to prove that the crane in question was purchased in the year under consideration and was used for the purpose of business. Therefore, the depreciation was allowable. Considering the above discussion, the orders of the authorities below are set aside and the addition is deleted. The Assessing Officer is directed to grant depreciation to the assessee as is claimed. - Decided in favour of assessee.
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