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2017 (10) TMI 42 - AT - Income TaxClaim of loss of transfer of security from ‘available for sale’ category to ‘held to maturity’ category by the appellant bank in accordance with direction/ circular of Reserve Bank of India.” allowed. We are in agreement with the arguments of assessee and the issue of loss on inter-transfer of securities of decided in favour of Assessee. The issue of depreciation on securities at the close of Financial Year is also decided in favour of assessee Claim of the assessee through revised return which though became belated cannot be denied as assessee was rightly entitled to the allowance in view of the decisions of Hon’ble Supreme Court in the case of United Commercial Bank [1999 (9) TMI 4 - SUPREME Court]. Broken period interest disallowance allowed. Disallowance of premium paid on account of ‘Key Man Insurance Policy’ - Held that:- What can be sold as a ‘life insurance policy’ taken by a business entity for its employee, former employee or any other person important for business of such an entity is between the insurance regulator and insurance service provider. However, once it has been sold as a life insurance policy on the keyman to the business, as long as it is in the nature of life insurance policy, whether pure life cover or term cover or a growth or guaranteed return policy, it is eligible for coverage of Section 10(10D). It is not open to us to infer the words which are not there on the statute and then proceed to give life and effect to the same. We had detailed discussions about this aspect of the matter in paragraph numbers 10 to 15 above, and, as we have held there, such an exercise is not permissible under the scheme of the Act. What IRDA regulates is issuance of life insurance policies by the insurance companies to the policyholders on the lives of its employees, former employees and key personnel but once such a policy is issued it cannot but be treated as a ‘keyman insurance cover’ as it essentially meets the requirement of Section 10(10D) because it is a “a life insurance policy taken by a person on the life of another person who is or was the employee of the firstmentioned person or is or was connected in any manner whatsoever with the business of the first-mentioned person”. The mandate of Section 10(10D) does not put any further tests, nor can we infer the same. The issue of “Key Man Insurance” is also decided in favour of Assesssee.
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