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2018 (8) TMI 1897 - AT - Income TaxDisallowance of Insurance Premium paid to LIC regarding Leave Encashment Liability and enhancement - payment was not made to the employees but it was paid to the Insurance Company - HELD THAT:- Tribunal after considering the factual matrix of the issue remitted the same to the record of the AO for afresh adjudication after considering the relevant details to be filed by the assessee. However, the Tribunal has accepted the position of allowability of the claim if the same is regarding the premium paid for a policy taken from the LIC for Employees Group Leave Encashment Scheme. Accordingly, as far as the allowability of the claim for payment of premium of policy taken by the assessee for Employees Group Leave Encashment Scheme, the same is allowable expenditure. However, since the ld. CIT (A) has pointed out that the assessee itself has shown the payment as investment in the LIC and other companies and the interest accrued on such fund was credited to the Profit & Loss account, therefore, the AO has to just verify the fact whether any income accruing on the policy taken by the assessee was actually received by the assessee or it is just an accounting treatment by the assessee without actual income. If the benefit accrued on the policy is only accumulated to the fund itself which is to be used for discharge of liability on account of Leave Encashment, then such income though assessee has credited in the Profit & Loss account would not partake the character of real income but it would be only accumulation of the value of the policy to be used for discharge of the liability on account of leave encashment. In view of the above facts and circumstances of the case, we direct the AO to verify these facts and then allow the claim of the assessee - Appeals of the assessee are allowed for statistical purposes.
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