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TMI Blog2013 (11) TMI 1655X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act') has been set aside. Counsel for the revenue submits that as the Insurance Regulatory and Development Authority has issued a circular directing Insurance Companies not to issue Keyman Insurance Policies (KIP), particularly in relation to the life of partners of a firm, the circulars issued by the Income Tax Department allowing deductions on account of premium paid against such policies is no longer applicable. The order passed by Commissioner of Income Tax after recording that the assessment order allowing deductions for premium paid on Keyman Insurance Policies is erroneous and prejudicial to the interest of the revenue has been wrongly set aside by the Income Tax Appellate Tribunal. Counsel for the assessee submits that as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duce an extract from the order recorded by the ITAT, which reads as follows:- "13. In the facts of the present case before us, the assessment in this case was completed u/s 143(3) of the Act. During the course of assessment proceedings the Assessing Officer requisitioned the assessee to explain the nature of expenditure claimed on account of insurance charges. Further query was raised regarding the admissibility of the said expenses. The assessee in reply stated that the said expenditure was laid out on account of keyman insurance charges paid on the lives of the partners of the assessee firm. The claim of the assessee was that the said expenditure was allowable in view of the CBDT Circular No. 762 dated 18.2.1998 issued in this regard. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... circular issued by the Central Board of Direct Taxes thereby committing an error of jurisdiction. The ITAT has rightly set aside the order passeed by the CIT and restored the order passsed by the Assessing Officer.
As regards the second issue relating to the proporationate disallowance of the premium, admittedly, it was allowed on the principle of consistency by relying upon similar deductions allowed in previous assessment years which were not challenged by the revenue.
We find no error in the exercise of power by the ITAT in setting aside the order passed by the CIT (Ludhiana) that may give rise to a substantial question of law.
In view of what has been recorded hereinabove, the appeal is dismissed. X X X X Extracts X X X X X X X X Extracts X X X X
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