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2019 (5) TMI 888

..... D THAT:- Salary has been paid to 7 persons out of which 4 persons are newly employed during the year. The 3 persons to whom salary was being paid last year also are Shri S.B. Jajoo in whose case salary has been increased by ₹ 5,000/- per month. Shri S.B. Jajoo has more than 34 years of experience of running of industry and business. The increase in his salary is by ₹ 5,000/- only and looking to his profile/experience such increase cannot be adversely viewed and no disallowance of salary paid to Shri S.B. Jajoo is warranted. In the case of Smt. Santosh Jajoo the increase in salary is of ₹ 10000/- per month. She has been with the company since 2007-08. No special qualification of Smt. Santosh Jajoo or her work experience to justify the increase in her salary of ₹ 10000/- as against that of ₹ 5000/- in the case of Shri S.B. Jajoo and Shri Pankaj Jajoo has been placed on record. She is one of the family members of the director the increased payment of salary by ₹ 5000/- per month is considered to be excessive and the disallowance of salary in her case to the above extent is confirmed which works out to ₹ 60000/-. In the case of Shri Pankaj Jajo .....

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..... the assessee has filed complete details of traded goods for the year under consideration and also the comparative details for the previous year. It is observed by the CIT(A) that the contention of the assessee was found to be verifiable. The revenue has not rebutted these observations by placing any other material on record. Therefore, we do not see any infirmity in the findings of the CIT(A) and the same is hereby affirmed. - ITA No.372/Ind/2017 - 13-5-2019 - Shri Kul Bharat, Judicial Member And Shri Manish Borad, Accountant Member For the Appellant : Shri K.G. Goyal, Sr. D.R. For the Respondent : Shri K.C. Agrawal, C.A. And Shri Prakash Gupta, C.A. ORDER PER KUL BHARAT, J.M: This appeal filed by the revenue against order of the CIT(A)-1, Indore dated 28.2.2017 pertaining to the assessment year 2010-11. 2. The facts in brief are that case of the assessee was selected for scrutiny assessment and the assessment u/s 143(3) of the Income Tax Act, 1961 (hereinafter called as the Act ) was framed vide order dated 21.3.2013. While framing the assessment, the assessing officer observed that assessee is manufacturing and trading in absorbent cotton and gauge and also trading in medicines. .....

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..... n over showed only marginal increase from ₹ 6.96 Crores to ₹ 7.04 Crores. A.O. also took an adverse view on excessive salary paid to family members of director. From the material placed on record it is seen that salary has been paid to 7 persons out of which 4 persons are newly employed during the year. The 3 persons to whom salary was being paid last year also are Shri S.B. Jajoo in whose case salary has been increased by ₹ 5,000/- per month. Shri S.B. Jajoo has more than 34 years of experience of running of industry and business. The increase in his salary is by ₹ 5,000/- only and looking to his profile/experience such increase cannot be adversely viewed and no disallowance of salary paid to Shri S.B. Jajoo is warranted. 5.2 In the case of Smt. Santosh Jajoo the increase in salary is of ₹ 10000/- per month. She has been with the company since 2007-08. No special qualification of Smt. Santosh Jajoo or her work experience to justify the increase in her salary of ₹ 10000/- as against that of ₹ 5000/- in the case of Shri S.B. Jajoo and Shri Pankaj Jajoo has been placed on record. In view of the above and the fact that she is one of the family .....

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..... of ₹ 3,00,000/- made by the A.O. on account of disallowance of travelling expenses by ignoring the finding of the A.O. 9. Ld. D.R. supported the order of the A.O. and submitted that the assessee failed to support that the expenditure was incurred for business purposes. He submitted that the A.O. has arrived at conclusion that the expenditure is personal in nature. 10. On the contrary, Ld. Counsel for the assessee submitted that the A.O. without giving any specific finding on this allowability of the expenditure, made addition. 11. We have heard the rival contentions, perused the materials available on record and gone through the orders of the authorities below. We find that the A.O. in para-5 of the assessment order has made addition merely on estimate basis. The A.O. has not given any reasoning as to why the expenditure is being disallowed. Therefore, we do not see any infirmity into the order of the Ld. CIT(A) and the same is affirmed. Ground raised in this appeal is dismissed. 12. Ground No.3 of the revenue s appeal reads as under: 3. Whether on the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law by deleting the addition of ₹ 93,35,000/- m .....

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..... of ₹ 93.35 lacs cannot be sustained in appeal. This ground of the appellant is therefore allowed. ₹ 9335000/- deleted 16. From the above it is evident that the Ld. CIT(A) has noted the fact that during the course of assessment proceedings as well as appellate proceedings, appellant had pointed out that in respect of trading goods for the assessment year 2009-10, the turnover of ₹ 32,84,698/- was included the turnover of ₹ 14,83,939/- pertaining to the manufactured goods, which was wrongly booked as turnover of the traded goods and hence the profit percentage was showing major variation. Further, the Ld. CIT(A) has given a finding that the assessee has filed complete details of traded goods for the year under consideration and also the comparative details for the previous year. It is observed by the Ld. CIT(A) that the contention of the assessee was found to be verifiable. The revenue has not rebutted these observations by placing any other material on record. Therefore, we do not see any infirmity in the findings of the Ld. CIT(A) and the same is hereby affirmed. Hence, this ground is dismissed. 17. In the result, the appeal filed by the revenue is dismissed .....

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