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2012 (5) TMI 90 - AT - Income TaxApplicability of section 43B on payment of service tax - Non-inclusion of service tax in gross receipts – Held that:- As per the Service Tax Law, Service Tax is payable only when the payment/fees for underlying service provided are realized - as the appellant firm has not received the sum till the end of the financial year i.e. 2006-07 question of paying the same did not arise at all - Since the liability to pay service tax does not exist in the present case, the service tax cannot be said to be "payable" and therefore provisions of Sec.43-B of the Act could not also be invoked – in favour of assessee. Dis -allowing the insurance premium to the extent half out of an entire premium amount paid on the life of the partners – Held that:- The maturity proceeds of the Key Man Insurance Policy is taxable and premium paid on such policies is deductible - the CBDT Circular No. 762 dated February 18, 1998 has confirmed it - It is not necessary that a key man insurance policy should be only in the name of the employees and not partners - Sec. 10(1OD) recognize the existence of other types of relationship apart from employer-employee relationship for claiming deduction on account of premium paid on Keyman Insurance Policy as business expenditure - in favour of assessee.
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