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2012 (12) TMI 806 - AT - Income TaxDisallowance of Premium paid for Keyman Insurance Policy – Held that:- The object and purpose of a keyman insurance policy is to protect 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. It 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 - Disallowance made by the AO is directed to be deleted - in favour of assessee. Foreign Traveling Expenditure - Held that:- Entire Expenditure on foreign traveling was on account of business exigencies and the countries traveled i.e. USA and Canada represent 80% of the turnover of the assessee firm and same countries have been visited on a continuous basis year after year to maintain the business relation and to expand the same. It was further submitted that the fringe benefit tax (FBT) @ 5% on entire expenditure on foreign traveling had been paid separately to take care of any possible personal use of the funds of the firm while on foreign tour and the partners have traveled individually and not alongwith their families so as to suggest personal use of funds of the firms. Any disallowance in addition to fringe benefit tax has to be based on concrete evidence available with the AO and in case of estimation specific reasons need to be brought on record like an unusual increase in foreign traveling expenses especially the unvouched expenses vis-avis last year/years - appeal of the Revenue is dismissed.
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