1980 (12) TMI 88

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....ended on 9th July, 1975. 2. The assessee family consisted of Karta Shri Ramesh Chandra Saboo, his wife Smt. Shila Devi Saboo and minor son Shri Deepak Saboo. Apart from some income from interest and annuity refund, the assessee had share of income from three firms of Gwalior. Karta Shri. R.C. Saboo was managing all the affairs of the assessee family and also looked after the interest of the ass....

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....ered to the HUF, the amount was admissible as a deduction. It was further urged relying upon Bombay High Court decision in the case of CIT, Bombay vs. Walchand & Co. (1967) 65 ITR 381 (SC) and Supreme Court decision in J.K. Woolen Manufacturers vs. CIT (1969) 72 ITR 612 (SC) that where payment is made for commercial expediency, its reasonableness has to be judged from the point of view of the busi....

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....d. AAC, the facts stated before the ITO were reiterated. It was also pointed out that as a result of the service rendered by Shri R.C. Saboo, the income of the assessee increased from Rs. 33,039 in asst. yr. 1971-72 to Rs. 95,380 in the assessment year under consideration. Referring to the cases already mentioned above, it was urged that the ITO was not justified in determining the reasonable amou....

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.... on a salary of Rs. 2,250 per month. On these facts, it was urged that he was duly qualified and had the capacity to earn the salary which was paid to him by the HUF. Taking these facts into account the ld. AAC reduced the disallowance to Rs. 2,400 only. In other words, out of salary of Rs. 2,000 per mensum, the ld. AAC felt that salaries of Rs. 1,800 was justified. 4. We have heard the parties....