Income Tax Appellate Tribunal - Chandigarh
Auto Forging, Ludhiana vs Department Of Income Tax on 17 October, 2014
IN THE INCOME TAX APPELLATE TRIBUNAL
CHANDIGARH BENCHES 'A' CHANDIGARH
BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND
SHRI T.R. SOOD, ACCOUNTANT MEMBER
ITA No. 693/Chd/2013
Assessment Year: 2005-06
The DC IT, Vs. M/s. Auto Forging,
Circle 1 D-240, Phase VI
Ludhiana Focal Point
Ludhiana
PAN No.AABFA8800H
(Appellant) (Respondent)
Appellant By : Shri Mahavir Singh
Respondent By : Shri. Ashok Goyal
Date of hearing : 08/10/2014
Date of Pronouncement : 17/10/2014
ORDER
PER T.R.SOOD, A.M.
This is an appeal filed by the Revenue against the order dated 12/03/2013 of CIT (Appeals)-I, Ludhiana.
2. In this appeal Revenue has raised the following ground:-
i) That the Ld. CIT(A), has erred in law in deleting the addition of Rs. 11,52,641/- made by the A.O. on account of disallowance of expenditure incurred by the assessee on Keyman Insurance Policy.
3. After hearing both the parties we find that during assessment proceedings the query was raised regarding payment towards Keyman insurance. In response it was submitted that vide letter dt 7.8.2010 and 11.8.2010 as under:-
2
"Reply to letter dated 09.07.2010. Please find herewith policy of keyman insurance. In which the proposer is M/s. Auto Forgings and three partners are keyman insurancers. The assessee has already supplied you certificate from LIC certifying that the money payable both death / maturity in terms of these policies shall be payable to the firm (proposer) that is M/s. Auto Forgings.
I am attaching herewith judgment of Bombay High Court in the case of CIT v. M/s B.N. Exports (2010) 37 DTR (Bom) 381. In which case answere lies for all your queries as per para-2 of the letter dated 09.7.2010.
I may bring it to your kind notice that the above said case was reopened at the instance of the audit party without applying his mind which is illegal"
The Assessing Officer after detailed discussion and in view of the directions given by the Additional Commissioner Range-I, Ludhiana observed that partner of the firm was not a Keyman, therefore, premium paid towards insurance of such partner amounting ot Rs. 11,52,641/- was disallowed.
4. The Ld. C IT(A) following the decision of Hon'ble Bombay High Court in the case of CIT v B.N. Exports in 323 ITR 178 and also the decision of the Chandigarh Bench of the Tribunal in the case of ACIT, Circle-I , Ludhiana Vs Paramount Impex deleted the addition.
5. Before us Ld. DR supported the order of Assessing Officer.
6. On the other hand, the Ld. Counsel for the assessee submitted that issue is squarel y covered in favour of the assessee by the decision of 3 Hon'ble Punjab & Haryana High Court in the case of C IT v Laj Exports in ITA No. 251 of 2012.
7. We have considered the rival submissions carefull y. We have also perused the decision of Hon'ble Punjab & Haryana High Court in the case of Laj Exports (supra). The Hon'ble High Court has clearl y held that in view of the Circular, all the payments of premium on Keyman insurance is allowable. Therefore, following that order we decide the issue in favour of the assessee and against the Revenue.
8. In the result appeal of the Revenue is dismissed.
Order pronounced in the Open Court on 17.10.2014.
Sd/- sd/- (BHAVNESH SAINI) (T.R. SOOD) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated : 17.10.2014 RKK
Copy to: The Appellant, The Respondent, The CIT, The CIT(A), The DR