TMI Blog2015 (4) TMI 266X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claimed the following questions of law for determination by this Court: (a) Whether on the facts and in the circumstances of the case and in law, the Hon'ble ITAT was correct in deleting the disallowance u/s 40A(2)(b) made by the Assessing Officer after examining the unreasonableness of the 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. (b) Whether on the facts and in the circumstances of the cases and in law, the Hon'ble ITAT was correct in deleting the disallowance u/s 40A(2)(b) made by the Assessing Officer, igno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... added back to the income of the assessee. The CIT, vide order dated 06.09.2012 (Annexure A-II), rejected the contention of the Revenue and allowed the appeal by holding that the AO could not substitute the wisdom of the partners of the firm to hold that the salary was excessive and unreasonable. Accordingly, the disallowance made by the AO was directed to be deleted by noticing that both the assessee/firm as well as Shri R.S.Saluja were on the same tax bracket and his experience would take the assessee/firm to greater heights and the appeal was partly allowed. The Revenue filed an appeal against the said order of the CIT before the Tribunal, which came to the conclusion that the Revenue had failed to point out any motive of tax planning ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... integrated textile player with presence in all the value added segments, from yarn manufacturing, dyeing to manufacture of dyed knitted cloth and garments. Kudu Industries is the flagship concern of R S Saluja Group. Mr. R.S.Saluja looks after the complete function of production planning of yarn and fabric dyeing and has been able to achieve the sale level of more than ₹ 48 Crores for the year under consideration. He provides strategic direction in selection of technology and machineries, in setting up of new manufacturing facilities and improvement of production processes, exploring and diversifying into new ventures. The group turnover is more than 1000 crores as on date. Keeping in view, his services and experience, contribution et ..... X X X X Extracts X X X X X X X X Extracts X X X X
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