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TMI Blog2015 (1) TMI 1070X X X X Extracts X X X X X X X X Extracts X X X X ..... diture was incurred in the above factual backdrop. There was no basis, therefore, for making any deduction or disallowance. The disallowance was purely a matter of conjecture and surmise on the part of the Assessing Officer. It is in these circumstances the Commissioner correctly deleted this disallowance. Decided in favour of assessee. Under valuation of closing stock of shares and bonds - Held that:- We find that when the cost actually paid is considered, there is no concept of any notional valuation. The average cost is worked out by considering the total cost actually paid for purchasing the shares and the dividend by the number of shares. It has been held that the Assessee has been following this method of valuation of closing stock ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upport of this Appeal submits that all four questions and formulated by the Revenue are substantial questions of law. 5] He submits that the Keyman Insurance Policy has been taken in the case of the present Assessee, a partnership firm. It is on the life of two partners. The partnership firm cannot have existence in law independent that of the partners. Therefore, the Assessing Officer was justified in estimating a percentage, namely, 20% of the Keyman Insurance Premium. That was on the basis that this insurance premium expenditure was personal in nature and of the partners. It was not incurred wholly and solely for the purpose of the business of the Assessee's firm. Mr. Vimal Gupta would submit that both the Commissioner and the Tri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner deleted such adhoc disallowance and the Tribunal has upheld that order of the Commissioner. 8] We have, in the light of this admitted factual position perused the findings. The findings of the Tribunal in para 5 are that the adhoc deduction could not have been effected. More so, when the department itself has clarified that premium paid on the Keyman Insurance Premium is allowable as business expenditure. The Keyman Insurance Premium is a life insurance 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. The Commissioner referred to the legal provisions. The Commissioner rested his find ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the shares and the dividend by the number of shares. The Tribunal held that the Assessee's perception that the value taken on the basis of weighted average method is notional, is incorrect. Why it has to be termed as such, has been reasoned by the Tribunal in para 9. It has been held that the Assessee has been following this method of valuation of closing stock for the last 16 years. In these circumstances, unless some distinguishing features were on record, the Assessing Officer should not have interfered with this method of valuation, is the finding which the Tribunal renders. It concurs fully with the finding of the Commissioner when he holds that the method of valuation or stock followed by the Assessee was an accepted method a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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