C.I.T.,New Delhi vs Rajan Nanda on 24 November, 2014
20. The Assessing Officer has questioned commercial expediency
of taking the keyman insurance policies on the short grounds that (a)
the fall in turnover, apparently according to the Assessing Officer, shows
that there was no commercial benefit from taking the keyman insurance
cover; (b) the insurance policy was taken for the benefit of the partner
rather than the firm; and (c) no necessity or expediency of the person being
keyman and the policy being taken for the benefit of the firm was
established. When benefit of policy was assigned to the insured, the policy
cannot be said to be for the benefit of the assessee firm. We see no merits
in these objections to the commercial expediency. As for the fall in
turnover, the benefit of an expenditure cannot be, by any stretch of logic,
relevant to determine its commercial expediency, and, in any case. Such a
benefit of hindsight cannot be available at the point of time when business
decisions are made; more often than not, these are the tools of post mortem
of events, rather than inputs for the decision making. As for the other
issues raised by the Assessing Officer as such, we may refer to the
following observations made, in this context, by Hon'ble Delhi High Court
in the case of CIT Vs Rajan Nanda etc. [(2012) 349 ITR 8 (Del)]: