The ACIT,Vapi Circle, Vapi V. M/s. K.H. Khemani & Sons, Nani Daman

ITA 222/AHD/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 60285 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-04-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2009-2010
• Appeal Filed On: 25-01-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B L YADAV
• Keywords: Business expenditure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, D BENCH, AHMEDABAD BEFORE SHRI A. K. GARODIA, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER I.T.A. NO. 222/ AHD/2012 (ASSESSMENT YEAR 2009-10) ACIT, VAPI CIRCLE VAPI VS. M/S. K H KHEMANI & SONS, SHOP NO.34, BIBLOS MARKET, NR. KAVI KHABARDAR ROAD, ZAMMPABAR, NANI DAMAN PAN/GIR NO. : AADFK2390L (APPELLANT) .. (RESPONDENT) APPELLANT BY: SHRI B L YADAV, SR. DR RESPONDENT BY: NONE DATE OF HEARING: 26.03.2012 DATE OF PRONOUNCEMENT: 27.04.2012 O R D E R PER SHRI A. K. GARODIA, AM:- THIS IS REVENUES APPEAL DIRECTED AGAINST THE ORDER OF LD. CIT(A) VALSAD DATED 21.11.2011 FOR THE ASSESSMENT YEAR 2009-10. THE GROUNDS RAISED BY THE REVENUE ARE AS UNDER: ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE MADE ON THE EXPENSES ON ACCOUNT OF KEYMAN INSURANCE PREMIUM AMO UNTING TO RS.14,92,930/-. IT IS THEREFORE PRAYED THAT THE OR DER OF THE LD. CIT(A) BE SET ASIDE AND THAT THE ORDER OF THE A.O. BE RESTORED. 2. NONE APPEARED ON BEHALF OF THE ASSESSEE ON THE A PPOINTED DATE OF HEARING ALTHOUGH THE NOTICE OF HEARING WAS DULY SER VED ON THE ASSESSEE AS PER THE ACKNOWLEDGMENT AVAILABLE ON RECORD AND HENC E, WE PROCEED TO DECIDE THIS APPEAL OF THE REVENUE EX-PARTE QUA THE ASSESSEE. 3. LD. D.R. OF THE REVENUE SUPPORTED THE ASSESSMENT ORDER. I.T.A.NO.222 /AHD/2012 2 4. WE HAVE CONSIDERED THE SUBMISSION OF THE LD. D.R . WE FIND THAT HIS ISSUE HAS BEEN DECIDED BY LD. CIT(A) AS PER PAR A 6.3 OF HIS ORDER WHICH IS REPRODUCED BELOW: 6.3 DECISION :-I HAVE CONSIDERED THE CONTENTI ON OF THE APPELLANT AS WELL AS THE OBSERVATION OF THE AO IN T HE ASSESSMENT ORDER. BASED ON THE FACTUAL AND LEGAL MATRIX AND RA TIO LAID DOWN IN AUTHORITIES RELIED UPON IN CASE OF CIT V/S B.N. EXP ORTS (2010) 231 CTR 227 (BOM), ITO VS. MODI MOTORS (2009) 27 SOT 47 6 (MUM), MUTHOOT GENERAL FINANCE V/S DCIT (2010) 136T TJ 17 (COCHIN), P. G. ELECTRONICS V/S. ITO (2005) 98 TTJ 896 (DEL), I AM INCLINED TO ACCEPT THE CONTENTION OF THE APPELLANT. IN THE INSTANT CASE INSURANCE POLICY IS TAKEN FOR THE BENEFIT OF T HE FIRM IN ORDER TO STRENGTHEN ITS STANDING IN THE EVENT OF A SETBACK, WHATEVER BE THE TYPE OF BUSINESS. KEYMAN WOULD ALSO INCLUDE PARTNER S AND THEREFORE KEYMAN INSURANCE POLICY PREMIUM ON THE LI FE OF THE PARTNERS IS AN ALLOWABLE DEDUCTION. THE DISALLOWANC E MADE BY THE AO CAN NOT BE SUSTAINED IN LAW AS PREMIUM OF RS. 14 ,92, 930/- PAID UNDER KEYMAN POLICY IS EXPENDITURE INCURRED WH OLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS AND THEREFO RE, THE SAME IS ALLOWABLE AS BUSINESS EXPENDITURE. THE APPELLANT'S GROUND NO. 2 IS ALLOWED. 5. FROM THE ABOVE PARA OF THE ORDER OF LD. CIT(A), IT IS SEEN THAT HE HAS DECIDED THIS ISSUE IN FAVOUR OF THE ASSESSEE BY FOLLOWING VARIOUS JUDGMENTS OF THE TRIBUNAL AND HONBLE BOMBAY HIGH C OURT RENDERED IN THE CASE OF CIT VS D N EXPORTS AS REPORTED IN 231 C TR 227. LD. D.R. COULD NOT SHOW OR ESTABLISH THAT THE JUDGMENTS FOLL OWED BY LD. CIT(A) ARE NOT APPLICABLE IN THE PRESENT CASE. NO DIFFERE NCE IN FACTS COLD BE POINTED OUT BY HIM AND HENCE, WE DO NOT FIND ANY GO OD REASON TO INTERFERE IN THE ORDER OF LD. CIT(A). WE, THEREFORE, CONFIRM THE SAME. 6. IN THE RESULT, APPEAL OF THE REVENUE STANDS DISM ISSED. 7. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE M ENTIONED HEREINABOVE. SD./- SD./- (KUL BHARAT) (A. K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER SP I.T.A.NO.222 /AHD/2012 3 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 1. DATE OF DICTATION19/4. 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 23/4.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 D ICTATING MEMBER FOR PRONOUNCEMENT 27/4 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S.27/4 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 27/4/12 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK .. 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER . 9. DATE OF DESPATCH OF THE ORDER. .