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TMI Blog2014 (9) TMI 50X X X X Extracts X X X X X X X X Extracts X X X X ..... nal, Ahmedabad Bench (hereinafter referred to as 'the Tribunal') dated 30.6.2011 in ITR No. 2184/Ahd/2009 for A.Y. 2006- 07, the Revenue has preferred the present Tax Appeal No. 13/2012 to consider the following substantial question of law: [A] Whether the Appellate Tribunal is right in law and on facts, in deleting the addition of Rs. 4,15,20,000/- claimed towards Keyman Insurance Premium, by holding that similar claim was allowed in the A.Y. 2005-06 and the assessment for the A.Y. 2005-06 has reached finality as the Hon'ble High Court of Gujarat has quashed the reopened assessment, when the Hon'ble Supreme Court had granted liberty to the Revenue to apply for Review of the SLP filed for the A.Y. 2005-06 ? 3. That feeling aggrieved and d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ear i.e. A.Y. 2006-07 and 2007-08 also the aforesaid amount was allowable as business expenditure. It appears that during the course of assessment proceedings, the A.O. Noticed that the assessee has paid premium of Rs. 4,50,00,000/- being Keyman Insurance Premium for Key-persons namely Shri Abhay Shah and Shri Pankaj Shah and the AO was of the opinion that the aforesaid amount was not allowable as business expenditure. He accordingly worked out the premium by considering lower of the gross profit method/net profit method and 10 times remuneration and according to him, the allowable premium worked out of Rs. 34.80 lakhs as against Rs. 4,50,00,000/-. He accordingly disallowed the premium of Rs. 4,50,00,000/- and added to the income. 6. Being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ground of and considering the fact that with respect to AY 2005-06 the aforesaid amount of premium on the Keyman Insuance Policy was held to be admissible deduction as business expenditure. 8. Under the circumstances, when for AY 2005-06, the aforesaid issue was sought to be re-opened by way of re-assessment proceedings which was set aside solely on the ground of jurisdiction and was not decided on merits, the learned Tribunal ought to have decided the said issue on merits and has materially erred in considering the fact that for A.Y. 2005-06, the Revenue has accepted that the premium of Keyman Insurance Policy of the partners of the firm is wholly and exclusively for the purposes of business is allowable as business expenditure, however, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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