TMI Blog2011 (11) TMI 446X X X X Extracts X X X X X X X X Extracts X X X X ..... 30-11-2011 - D. K. Srivastava, Sushma Chowla, JJ. Akhilesh Gupta for the Appellant Sudhir Sehgal for the Respondent ORDER D. K. Srivastava, Accountant Member:- The appeal filed by the Department is directed against the order passed by the Commissioner of Income-tax (Appeals) on May 20, 2011, on the following grounds:- "1. That the learned Commissioner of Income-tax (Appeals) has erred in law and on facts in deleting the addition of Rs. 11,80,685 made by the Assessing Officer on the issue of Keyman Insurance premium paid on the life of partner. 2. That the learned Commissioner of Income-tax (Appeals) has erred in ignoring the correct meaning of the Explanation under section 10(10D), which say that, for the purpose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... major decisions in the course of running such business. A partnership firm is very much within its right to obtain keyman insurance policy on the life of its partners. The Circular No. 762 dated February 18, 1998 ([1998] 230 ITR (St.) 12) as issued by the Central Board of Direct Taxes clarifies that keyman insurance premium paid by an assessee is allowable business expenditure. Besides the above, the judgment of the hon'ble Bombay High Court in the case of CIT v. B. N. Exports [2010] 323 ITR 178 (Bom) wherein it has been held that premium paid for keyman insurance policy taken on the life of the partner is admissible deduction in the hands of the partnership firm. The hon'ble High Court by relying upon the hon'ble Supreme Court judgment in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Assessing Officer is hereby deleted and the above grounds are allowed." We have heard both the parties. While the learned Departmental representative relied upon the order passed by the Assessing Officer, learned counsel for the assessee relied upon the order passed by the Commissioner of Income-tax (Appeals). In our opinion, the learned Commissioner of Income-tax (Appeals) has carefully considered the issue in his appellate order and decided the same in favour of the assessee following several decisions, namely, CIT v. B. N. Exports [2010] 323 ITR 178 (Bom), Modi Motors [2009] 27 SOT 476 (Mumbai) and P. G. Electronics [2005] 98 TTJ (Delhi) 896. All the aforesaid decisions cover the issue under appeal against the Department and in favou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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