Income Tax Appellate Tribunal - Ahmedabad
Gujarat Plug In Devices Pvt.Ltd.,, ... vs Assessee on 4 July, 2012
IN THE INCOME TAX APPELLATE TRIBUNAL,
" B" BENCH, AHMEDABAD
Before Shri A. K. GARODIA, ACCOUNTANT MEMBER
and Shri KUL BHARAT, JUDICIAL MEMBER
I.T.A. No.2528 / Ahd/2010
(Assessment year 2005-06)
M/s.Gujarat Plug in Devices Vs. DCIT, Circle 1(1),
P.Ltd., 103, Maruti Complex, Baroda
Gotri Road, Baroda
PAN/GIR No. : AAACG6863C
(APPELLANT) .. (RESPONDENT)
Appellant by: Shri Sunil H Talati, AR
Respondent by: Shri Rajnish Vohra, Sr. DR
Date of hearing: 04.07.2012
Date of pronouncement: 31.08.2012
ORDER
PER SHRI A. K. GARODIA, AM:-
This is assessee's appeal directed against the order of Ld. CIT(A) I, Baroda dated 25.06.2010 for the assessment year 2005-06. The grounds raised by the assessee are as under:
"Your appellant is being dissatisfied with the order dated 25-06- 2010 passed by the Hon'ble CIT (Appeals) - I, Baroda presents this appeal against the said order on the following amongst other grounds:-
1. The order passed by the Hon'ble CIT (Appeals) -
pronouncements and same be quashed.
is bad in law, contrary to legal The Hon'ble CIT (A) -1 has erred in confirming the disallowance of premium paid on Keyman's policy of one of the directors amounting to Rs. 2,13,079/-. It is submitted that the disallowance made is unjust and uncalled for since the expenditure incurred is 2 I.T.A.No.2528 /Ahd/2010 for the purpose and incidental to the business. It be held so now and the AO be directed to allow the same."
2. The brief facts till the assessment stage are noted by Ld. CIT(A) in para 4 of his order which is reproduced below:
"4. Ground No. 2 is the only effective ground of appeal and relates to the disallowance of Rs. 2,13,709/- being the premium paid on keyman policy of LIC. The brief facts are that the AO observed during the assessment proceedings that the assessee had claimed expenditure of premium paid on keyman policy in respect of one of the directors. It was observed that the nominee of the policy was the wife of the keyman and not the assessee company. It was further noted that the object of the keyman policy was to protect the interest of the company in case of death or incapacitation of the keyman. Since the nominee was not the company but wife of the keyman, it was held that the expenditure on premium of keyman policy was not related to any business purpose and was, accordingly, disallowed."
3. Being aggrieved, the assessee carried the matter in appeal before Ld. CIT(A) but without success and now, the assessee is in further appeal before us.
4. It was the submission by the Ld. A.R. that the A.O. and Ld. CIT(A) have disallowed premium paid by the assessee company only on the ground that the nominee in the policy was wife of the keyman and as there is no relation between the assessee company and wife of the keyman as employer-employee, the premium paid by the assessee of the keyman insurance policy cannot be allowed u/s 37 of the Income tax Act, 1961. He further submitted that the assessee enquired with the LIC and LIC on its letter head clearly mentioned that the name of the wife as nominee is a mistake which has been corrected. He further submitted that under these facts, the matter may be restored back to the file of the A.O. for a fresh decision after verifying the correction from the LIC.
3 I.T.A.No.2528 /Ahd/20105. Ld. D.R. supported the orders of authorities below.
6. We have considered the rival submissions, perused the material on record and have gone through the orders of authorities below. We find that on page 12 of the paper book is a copy of insurance policy in which the mentioning of the name of the nominee being wife has been struck off by LIC and hence, we feel that in the interest of justice, this matter should go back to the file of the A.O. for a fresh decision after verifying the contention of the assessee from LIC and hence, we set aside the order of Ld. CIT(A) on this issue and restore the mater back to the file of the A.O. for a fresh decision. The A.O. should enquire from the LIC as to whether the name of the nominee as wife was wrongly mentioned due to mistake on the part of LIC and if it is found correct, then the disallowance is not justified. The A.O. should pass necessary order as per law as per above direction after providing adequate opportunity of being heard to the assessee.
7. In the result, appeal of the assessee stands allowed for statistical purposes.
8. Order pronounced in the open court on the date mentioned hereinabove.
Sd./- Sd./-
(KUL BHARAT) (A. K. GARODIA)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Sp
Copy of the Order forwarded to:
1. The applicant
2. The Respondent
3. The CIT Concerned
4. The Ld. CIT (Appeals)
5. The DR, Ahmedabad By order
6. The Guard File
AR,ITAT,Ahmedabad
4 I.T.A.No.2528 /Ahd/2010
1. Date of dictation...28/08/12
2. Date on which the typed draft is placed before the Dictating Member...30/08/2012.Other Member ............
3. Date on which the approved draft comes to the Sr. P.S./P.S.
4. Date on which the fair order is placed before the Dictating Member for pronouncement ......31/08/2012
5. Date on which the fair order comes back to the Sr. P.S./P.S.31/8/12
6. Date on which the file goes to the Bench Clerk ......31/08/2012
7. Date on which the file goes to the Head Clerk .......................
8. The date on which the file goes to the Assistant Registrar for signature on the order .........................
9. Date of Despatch of the order. ......................