9911796707
TMI Blog2012 (11) TMI 798X X X X Extracts X X X X X X X X Extracts X X X X ..... the case are that the 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. The AO relied on the decision of the Hon'ble Gujarat High Court in the case of Khodidas Motiral Panchal 161 ITR 99 and also relied on CBDT Circular No.762, dated 18-02- 1998. 3. Aggrieved by the order of the AO, the assessee filed an appeal before the learned CIT(A). The learned CIT(A) directed the AO to delete the addition by observing as under:- "I have considered the submissions and find that the decision of Hon'ble Gujarat High Court relied upon by the AO pertains to A Y.I 971-72. Subse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s also without merits since 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," In the instant case, the 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. Therefore, the AO's action in disallowing the insurance premium paid by the firm under Keyman Insurance policy is not in order and the addition is directed to be deleted. The CBDT circular read in its entirety is also in favour of the appellant." 4. Now, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommission. All the persons were assessed to tax at a highest slab and their statements were recorded by the AO in AY 2003-04 and the said commission was allowed. However, the AO rejected the explanation and held that there was no basic data for payment of commission and therefore the commission was not an allowable expenditure and he made an addition on this account. 7. On appeal, the learned CIT(A) directed the AO to delete the disallowance in the following manner:- "Before me the Id. AR submitted that the said commission was paid to increase the sales, In medicine market, the general practice was that every retailer would keep an open register in which lie would note down the names of the medicines which were about to finish. One person ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT Act since even other wise the appellant would have to pay commission to outside parties. I am of the considered view that genuineness of the commission paid stands established and the AO has nowhere given a finding that the same was excessive or unreasonable. Addition on this account is therefore directed to be deleted." 8. The Revenue is in appeal before us. The learned DR supported the order of the AO. The learned counsel of the assessee, on the other hand, supported the order of the learned CIT(A). 9. We have heard both the parties and perused the record and find that the learned CIT(A) has given clear finding that the payment made to the parties is genuine, after verification from two persons to whom commission was paid. This find ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, the disallowance is not sustainable and is directed to be deleted." 11. The Revenue is in appeal before us. The learned DR supported the order of the AO. The learned counsel of the assessee, on the other hand, supported the order of the learned CIT(A). 12. After hearing both the parties and perusing the record, we do not find any infirmity in the order of the learned CIT(A) in deleting the disallowance. The learned CIT(A) has given cogent reason for deleting the disallowance that the stand taken by the AO is not convincing since the 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. We accordingly uphold the order of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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