9911796707
TMI Blog2012 (12) TMI 806X X X X Extracts X X X X X X X X Extracts X X X X ..... s in deleting the addition of Rs. 11,80,6857- made by Assessing Officer on the issue of keyman Insurance premium paid on the life of partner. 2. That the Ld.CIT(A) has erred in ignoring the correct meaning of explanation u/s 10(100), which say that. " For the purposes of this clause, "Keyman Insurance policy" means a life insurance policy taken by a person on the life of another person who is or was the employee of the first mentioned person or is or was connected in any manner whatsoever with the business of the first mentioned person. 3. That the Ld CIT(A) erred in law and on facts in deleting the addition of Rs. 2,44,072/- made on account of disallowance of foreign travel expense as no details of expenses incurred on foreign travel wer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .K. saini put in appearance for the Revenue. 6. We have heard the rival contentions and perused the record. The issue raised vide ground Nos. 1 and 2 by the Revenue are against the allowability of claim of expenditure of keyman insurance premium paid by the assessee firm on the lives of its partners. The Assessing Officer disallowed the claim of the assessee in view of the provisions of section 10 (10D) of the Act and he ratio laid down by the Apex Court in Malabar Fisheries Company (supra). The CIT (Appeals) allowed the claim of the assessee in view of the ratio laid down by the Hon'ble Bombay High Court in CIT Vs . B.N. Exports [323 ITR 178 (Bom)] observing as under: "4. I have considered the facts of the case and the basis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s can not be considered as separate entities. The AO's reliance upon the decision of Hon'ble Apex Court in the case of Malabar Fisheries (Supra) is misplaced as the judgement of Hon'ble Court is on the issue of allowance development rebate and the observations that partnership firm and its partner are the same is in context of the distribution of assets of the firm. The observations of the Hon'ble Court given in an entirely different context can not be applied to the facts of the case under consideration as the issue is totally different in the sense that the survival of partners is critical to the efficient working of the firm and in the case of sudden demise of working partner. The business of the firm could suffer tremendously so as to m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect the business against a financial set back which may occur, as a result of a premature death, to the business or professional organization. There is no rational basis to confine the allowability of the expenditure incurred on the premium paid towards such a policy only to a situation where the policy is in respect of the life of an employee. A keyman insurance policy is obtained on the life of a partner to safeguard the firm against a disruption of the business that may result due to the premature death of a partner. Therefore, the expenditure which is laid out for the payment of premium on such a policy is incurred wholly and exclusively for the purposes of business. Hence, the appeal by the revenue does not raise any substantial questi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... use of the funds of the firm while on foreign tour. I am an agreement with the AR on this issue as the tour to specified countries seems to be entirely on account of business consideration and the partners have traveled individually and not alongwith their families so as to suggest personal use of funds of the firms. It also needs to be appreciated that the partners have not gone on business tour for the first time so as to take the opportunity to go around sight seeing. The foreign business tours are a regular feature in the case of the assessee and the partners are not expected to while away their time on frivolous activities especially when there is no evidence to suggest the same. The AO's apprehension that the foreign currency purcha ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
