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TMI Blog2015 (3) TMI 972X X X X Extracts X X X X X X X X Extracts X X X X ..... .11.2008. 2. The only issue, raised by the assessee per its two grounds, is the maintainability of the disallowance of expenditure incurred and claimed by the assessee as keyman insurance premium, in the facts and circumstances of the case. 3. We shall begin by stating the facts of the case. The assessee is an individual engaged in the business of manufacturing of cloth in his proprietary concern by the name 'Habib Textiles'. His brother, Mujeebur Raheman F. Ansari, likewise, runs his proprietary business in the same trade from the same business premises, i.e., 1130, Lucky Compound, V. P. Naka, Nasik Road, Bhiwandi, Thane. Both the brothers executed a (common) power of attorney in favour of the other on 01.02.2001, mutually author ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... more res-integra as the issue is covered by the decision of Hon'ble Bombay High Court in the case of CIT vs. B. N. Exports, 323 ITR 178 (Bom), wherein it has been held that Keyman insurance policy has not confined to a situation where there is a contract of employment. For the purpose of section 10(10D), a Keyman Insurance Policy means a life insurance policy taken by a person on the life of another person who is or was in employment as well as on a person who is or was connected in any manner whatsoever with the business of the subscriber. The words "is or was connected in any manner whatsoever with the business" of the subscriber are wider than what would be subsumed under a contract of employment. The latter part makes it clear that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ake care of business activities carried on by the assessee. As mentioned earlier, the words found in section 10(10D) i.e. "is or was connected in any manner whatsoever with the business" are wider than what would be subsumed under a contract of employment, therefore, those words will cover the premium paid by the assessee for his brother who was looking after the business of the assessee. The AO has not brought any adverse material on record to show that those contentions of the assessee as recorded in the assessment order in para-6 for assessment year 2004-05, are either incorrect or false. In this view of the situation, after hearing both the parties and after considering the facts of the case, we are of the opinion that disallowance made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is in serious doubt, which constitutes the principal reason for the disallowance effected and sustained u/s. 37(1) in the instant case, has not been considered at all by the tribunal per the said order. 4.2 The ld. Authorized Representative (AR) was at this stage required to exhibit the services rendered by the POA holder, the assessee's brother. He would advert to the copies of the various purchase bills and expense vouchers as received, as well as the sales bills issued, by the assessee, which had been 'passed' by the latter, i.e., the power of attorney holder. On being asked of any evidence that the assessee was not available on the relevant dates, as it may well be that the assessee had, likewise, authorized or passed the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e other as to the transactions likely to take place in his absence. A general power of attorney could only be understandable, in business parlance, where there are valid reasons for anticipating a prolonged absence from business, or even regularly, albeit unanticipated, so that it becomes necessary to constitute another as an attorney, authorizing him to undertake the transactions. Even as there is nothing on record to validate the said case, the same does not stand at the very threshold in-as-much as the very person who grants the power of attorney - in view of the uncertainty attending his presence, has himself been similarly granted power of attorney by the one in whose favour he has granted the power of attorney. That is, the power of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the other Genuineness of an expense is a primary condition for its allowance inasmuch as it impugns its very existence as such, i.e., questions it being considered as an expenditure, much less being incurred for the purposes of the business. Case law in the matter is legion, though we may for ready reference advert to the decision by the hon'ble jurisdictional high court in the case of DIT(IT) vs. Oman International Bank SAOG [2009] 313 ITR 128 (Bom), whereat, speaking in the context of a bad debt written off as irrecoverable, it underlined the aspect of genuineness of the write off in accounts, so that the A.O. could for good reasons hold it as not bona fide, disallowing the claim. Conclusion 5. The tribunal in the cited case h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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