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2015 (12) TMI 1500 - AT - Income TaxTrading addition - CIT(A) deleted the addition - Held that:- Firstly, it is not under dispute that the assessee is in a line of business of petroleum trading wherein both purchase of petroleum products as well as subsequent sale thereof are governed by Oil Marketing Companies, in the instant case which is Indian Oil Corporation (IOC). Accordingly, the margin which is earned by the assessee is effectively governed by the IOC. It is also not under dispute that assessee has declared turnover of ₹ 33.11 cr and it is not the case of the revenue that there is a suppression of sales by the assessee during the year under consideration. Further, the assessee has demonstrated through the chart (reproduced above) that with the change in sale price of the petroleum products, the margin in the hands of the assessee remains the same. Further, we agree with the contention of the ld. A/R that since the revenue has not challenged the finding of the ld. CIT (A) wherein he has held that books of account cannot be rejected, revenue cannot be allowed to take the ground that ld. CIT (A) has erred in deleting the trading addition. In the light of above, we do not find any infirmity in the order of ld. CIT (A) - Decided against revenue. Disallowance of salary expenses made by AO u/s 40A(2)(b) - CIT(A) deleted the addition - Held that:- We believe that ld. CIT (A) has rightly stated that the salary which is derived by a person not only depends on experience but also depends on his qualification. In the instant case it is not under dispute that Shri Naresh Pareek was holding Post Graduate diploma in Management from Balaji Institute of Modern Management, Pune. Secondly, the appellant, considering the educational qualification, has contractually agreed to pay ₹ 15,000/- per month to Shri Naresh Pareek. It is a settled principle that it is the businessman who is the best judge to determine the services which are required for the purpose of his business and what should be reasonable compensation to avail the services. In the instant case the appellant in his wisdom has decided to appoint Shri Naresh Pareek to run its business more efficiently and have agreed to pay a salary of ₹ 15,000/- per month to him. We see no infirmity in the order of ld. CIT (A). - Decided against revenue.
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