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2012 (11) TMI 798 - AT - Income TaxAddition on account of insurance premium paid under the Keyman Insurance Scheme on the life of its partner AO observed that the assessee had claimed this amount as revenue expenditure which was not allowable since the benefit of the insurance is in the nature of capital receipt and so the expenditure would also be capital expenditure Held that:- Premium paid for obtaining such insurance policy would be an expenditure allowable u/s 37(1) of the I.T. Act - as pet 1 Explanation to Section 10 (10D), "Keyman Insurance Policy means a Life insurance policy 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 first mentioned person - first mentioned person is the partnership firm while the policy has been taken on the life o! the partner who is the second mentioned person addition deleted In favor of assessee Disallowance on account of sales commission alleged that the assessee was unable to provide the proof of services rendered Held that:- Genuineness of the commission paid stands established and the AO has nowhere given a finding that the same was excessive or unreasonable - payment made to the parties is genuine, after verification from two persons to whom commission was paid. This finding of fact was not disputed by the Revenue in favor of assessee Disallowance on account of salary payment alleged that since the books of accounts were not produced having been destroyed in the floods, there was no way of verifying the genuineness of claim of salary which was mostly paid in cash Held that:- Salary was being paid to staff and to the deliveryman and the salary was paid in cash since the staff normally did not have any Bank account - payment would be made by cash to the employees and there is no statutory requirement of salary to be paid by cheque, especially to lowly paid employees addition deleted in favor of assessee
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