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Showing contexts for: turnover decrease in Capscan Computers Forms (P) Ltd, vs Department Of Income TaxMatching Fragments
12. Last grievance of the Revenue relates to deletion of disallowance of Rs.2,15,000/- made by the AO under the head 'salary'.
13. From the record, we found that during the year, the assessee has claimed salary of Rs.7,28,895/-, out of which AO disallowed 30% which works out to Rs.2,15,000/-. By observing that salary was pertaining to the regular employees of the company, the CIT(A) deleted the disallowance. We do not find any infirmity in the order of CIT(A) wherein he has categorically observed that even in case of fall in turnover there may not be proportionate decrease in the salary as the regular employees cannot be reduced frequently. Since the salary is in the nature of overheads, we do not find any merit in the action of the AO for disallowing 30% of the salary on the plea that there was reduction in the turnover.