Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2019 (1) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (1) TMI 1212 - HC - Income TaxDisallowance of Keyman Insurance Policy - premium paid by the assessee as Keyman Insurance Premium would not qualify for expenditure - Whether the said policy is personal insurance policy or Keyman Inusrance Policy? - Held that:- The issue of allowance of expenditure toward Keyman Insurance Premium taken out by the partnership firm in case of its partners, is no longer res integra. This Court in the case of Commissioner of Income Tax Vs. B.N. Exports [2010 (3) TMI 186 - BOMBAY HIGH COURT] has examined such an issue and held that the insurance policy taken out to protect the interest of the partnership firm against disruption in case of sudden death of partner, would be an allowable expenditure. The Tribunal had in fact relied on this decision while dismissing the Revenue's appeal. In view of the decisions of the various High Courts, the Central Board of Direct Taxes had also issued a Circular bearing No. 38/16 dated 22.11.2016 accepting such a view, making a particular reference to the decision of the Punjab & Haryana High Court in case of M/s. Ramesh Steels (2016 (5) TMI 1155 - PUNJAB & HARYANA HIGH COURT). The Tribunal has also relied on this circular. Therefore, the Revenue's objection in law is not sustainable. Even if we permit the Revenue to travel beyond what was argued before the Tribunal, the question whether the policy was a Keyman Policy or not has been held on facts against the Revenue by CIT(A). As noted, the CIT(A) in fact recorded that the Assessing Officer had no material to hold to the contrary. No question of law, therefore, arises. Addition u/s 14A - Held that:- Disallowance of an expenditure offered by the assessee for earning income exempt from tax which Tribunal accepted. Question No. 3 is an element of the same question where the Revenue argued that such disallowance cannot be discarded in relation to the shares held by the assessee by way of stock in trade. At the outset, we may record that this question does not arise out of the impugned order of the Tribunal since the Tribunal has not given any final finding on this aspect. Disallowance to net interest expenditure - Held that:- Tribunal while giving further relief to the assessee noted that the assessee had offered voluntary disallowance and that the assessee had otherwise also had sufficient interest free funds for making investment in tax exempt investments. Thus, this is an essential question of fact.
|