Document Fragment View
Fragment Information
Showing contexts for: keyman in Addl Cit Rg 4(2), Mumbai vs Mit Chatson P.Ltd, Mumbai on 29 December, 2016Matching Fragments
4. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in allowing the expenses of Rs.23,59,244/- on account of Keyman Insurance Premium bearing different name of propose (other than assessee).
5. On the facts and in the circumstances of the case and in law, the Ld.CIT(A) erred in allowing the expenses of Rs.4,58,531/- on account of late payment of employee contribution to PF.
6. On the facts and in the circumstances of the case, the impugned order of the Ld. CIT(A) is contrary to law to be set aside and that of the Assessing Officer be restored.
3. The brief facts of the case are that the assessee filed its return of income for the A.Y.2009-10 on 24.09.2009 by declaring total income to the tune of Rs.5,50,50,692/-. The return of income was processed u/s.143(1) of the Income Tax Act, 1961( in short "the Act"). The case was taken up for scrutiny, therefore, statutory notice u/s.143(2) of the A.Y. 2009-10 Act was issued on 20.09.2010 and duly served upon the assessee on 29.09.2010. Thereafter, the present case was assigned to the present Assessing Officer vide order of CIT-4 bearing No.CIT-4/Scrutiny cases /2010-11 dated 13.06.2011. Notice u/s.142(1) of the Act was issued on 20.06.2011. The assessee company is engaged in Manufacturing of Faceted Glass Beads. The Assessing Officer disallowed the foreign travelling expenses to the tune of Rs.14,36,369/- and also disallowed the payment u/s.40A(2)(b) of the Act to the tune of Rs.6,90,009/- and disallowed late payment of employees contribution to P.F. to the tune of Rs.4,58,531/- and disallowed the depreciation upon the furnace to the tune of Rs.14,41,468/- and disallowed the Keyman Insurance Premium to the tune of Rs.23,00,696/- and assessed the total income to the tune of Rs.6,13,77,770/-. Thereafter, the assessee filed an appeal before the CIT(A), who allowed the said disallowances, therefore, the revenue has filed the present appeal before us.
ISSUE NO.4:-
10. Under this issue the revenue has challenged the disallowance of expenses to the tune of Rs.23,59,244/- on account of Keyman Insurance Premium appearing different names of proposal other than assessee was. The assessee made the payment of Rs.23,59,244/- on account of payment to Keyman Insurance Premium. The payment A.Y. 2009-10 was related to 6 Keyman Insurance Policies where the proposer was M/s.Art Glass Industries and one policy was with the name of Bhagwan Singh Kushwaha which was proposed by the assessee company. The Assessing Officer disallowed the Keyman Insurance Premium relating to 6 insurance policies where the proposer was M/s. Art Glass Industries and the total disallowance was to the tune of Rs.23,00,696/-. The Assessing Officer was of the view that the assessee company was making the payments without any benefit accruing from these policies because the appellant has not changed name of the proposer of these policies which was with the M/s.Art Glass Industries. Before going further it is necessary to advert the finding of the CIT(A) on record:-
"5.2 I have considered the facts of the case, submission of the appellant. There is no dispute that in the normal course where the appellant takes and proposes the Keyman Insurance Policies, then the premium is allowed the same has been allowed in one case of Bhagwan Singh Kushwaha by the AO himself. As per the details and submissions filed by the appellant, out of 6 policies for which the disallowance has been made, 5 other than one in the name of Mayur Bhavsar wherein the proposer was M/s. Art Glass Industries, a firm which has been taken over by the appellant and the proposer officially both A.Y. 2009-10 have been transferred and changed to the name of the assessee company and therefore, the same is also allowable. Similarly, in the case of Mr. Mayur Bhavsar, one policy who was employee of M/s.ABPL has closed its business and the manufacturing division has been transferred to the assessee company along with the employee Mayur Bhavsar and other employee and therefore Mr. Bhavsar became Keyman of the assessee company. Therefore, the same is also allowable. In result, the entire claim for payment of Keyman Insurance Premium is allowable. Therefore, the disallowance is deleted and the ground of appeal is allowed."