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2022 (4) TMI 969 - AT - Income TaxDisallowance of management salaries - HELD THAT:- It is abundantly clear that the ITAT order shows that the head ‘management salaries’ is not included to be considered by the AO, to keep the assessee company alive and very much necessary to be incurred. Therefore, ITAT has not remitted the issue back to the file of the AO. Hence, we do not find any infirmity in the order passed by the Ld.CIT(A) and uphold the same. Accordingly, appeal of the assessee on this ground is dismissed. Disallowance of expenditure in respect of staff salaries - AO disallowed the expenditure related to staff salaries observing that some employees of the assessee company were attending to the obligation to the lessor with regard to the poultry equipment / shed etc and the staff who are regularly attending the duties are paid less @₹ 650/- and @ ₹ 700/- per month, but those who had worked occasionally are paid maximum salaries upto ₹ 3000/- per month - HELD THAT:- It is evident that the assessee leased out entire poultry complex. The assessee could not justify as to why an expenditure of around ₹ 80,000/- per month is incurred to maintain one bore well at the cost which is less than ₹ 50,000/- only. We are of the view that when the entire poultry complex has been leased out, there is no justification to pay salaries to six employees. We find no infirmity in the order passed by the Ld.CIT(A) and uphold the same. Accordingly, this ground raised by the assessee is dismissed. Disallowance of expenditure towards vehicle repairs and vehicle maintenance - HELD THAT:- The assessee company has leased out the entire poultry complex. The assessee agreed before the AO that the expenditure amounting to ₹ 34,871/- and ₹ 94,274/- incurred related to tractor but not lease income. CIT(A) has allowed only an amount of ₹ 10,033/- spent towards petrol for vehicles used by the staff as there is possibility of incurring this expenditure. We do not find any infirmity in the order passed by the Ld.CIT(A) and uphold the same. Accordingly, the ground raised by the assessee is dismissed. Disallowance of poultry equipment repairs - AO disallowed an amount incurred towards poultry repairs u/s 57(iii) of the Act, observing that the said expenditure was capital expenditure which, as per the lease deed, has to be borne by the lessor i.e. the assessee - HELD THAT:- We are of the view that since the poultry complex was leased out, as per the lease agreement, the lessee should bear all the repairs, claims etc. arising out of the maintenance during the lease period. CIT(A) observed from different bills produced that the items are petty in nature, which are to be borne by the lessee. No evidence was produced for the amount claimed of value before the CIT(A) nor before the Tribunal to enhance the capacity of asset under lease, which was treated as the expenditure to be borne by the lessee, but not the lessor. We do not find any infirmity in the order passed by the Ld.CIT(A) and accordingly, uphold the same. Hence, the ground of the assessee is dismissed.
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