M/s. Charotar Gas Sahakari Mandali Ltd., Anand V. The ACIT.,Anand Circle, Anand

ITA 412/AHD/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5948 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 22-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P PATHAK
• Assessee Lawyers: A N SHAH
• Keywords: Business expenditure; Commercial expediency

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH (BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER & SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER) ITA. NO: 412/AHD/2016 (ASSESSMENT YEAR: 2011-12) M/S. CHAROTAR GAS SAHKARI MANDALI LTD. GAS HOUSE, ANAND-SOJITRA ROAD, V.U. NAGAR, ANAND- 388120 V/S ASST. COMMISSIONER OF INCOME TAX, ANAND CIRCLE, ANAND (APPELLANT) (RESPONDENT) PAN: AAATC1831F APPELLANT BY : SMT. A.N. SHAH, AR RESPONDENT BY : SHRI O.P. PATHAK, SR. D.R. ( )/ ORDER DATE OF HEARING : 23-02-2018 DATE OF PRONOUNCEMENT : 26-02-2018 PER N.K. BILLAIYA, ACCOUNTANT MEMBER: 1. THIS APPEAL BY THE ASSESSEE IS PREFERRED AGAINST TH E ORDER OF THE LD. CIT(A)-4, VADODARA DATED 12.10.2015 PERTAINING TO A.Y. 2011-1 2. ITA NO. 412/ AHD/2016 . A.Y. 2011-1 2 2 2. THE ONLY GRIEVANCE OF THE ASSESSEE IS THAT THE LD. CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE OF RS. 2,64,220/- BEING PREMIUM PA ID ON THE LIC POLICY OF THE EMPLOYEES. 3. DURING THE COURSE OF THE SCRUTINY ASSESSMENT PROCEE DINGS, THE A.O. NOTICED THAT THE ASSESSEE HAS CLAIMED EXPENSES OF RS. 2,64, 220/- ON ACCOUNT OF LIC PREMIUM IN THE NAME OF SEVERAL INDIVIDUAL. THE ASSE SSEE WAS ASKED TO FURNISH DETAILS OF PAYMENT OF LIC PREMIUM OF RS. 2,64,220/- . IN ITS SUBMISSION, THE ASSESSEE STATED THAT THE EXPENDITURE WAS INCURRED F OR INSURANCE OF LIFE OF STAFF MEMBERS OF THE ASSESSEE SOCIETY. IT WAS CLAIMED THA T THE EXPENDITURE SHOULD BE ALLOWED ON THE GROUNDS OF COMMERCIAL EXPEDIENCY. IT WAS BROUGHT TO THE NOTICE OF THE A.O. THAT THE NATURE OF THE BUSINESS OF THE ASSESSEE IS SUCH THAT THE LIFE RISK OF ITS EMPLOYEES IS VERY MUCH ON THE HIGHER SI DE AS THEY HAVE TO WORK ON THE GAS PIPELINES WHICH IS VERY RISKY & PRONE TO FI RE. THE ASSESSEE CONTENDED THAT TO SAFEGUARD THE LIVES OF ITS EMPLOYEES, THE A SSESSEE AGREED TO PAY INSURANCE PREMIUM ON THEIR LIVE AND CLAIMED THE SAME AS EXPEN DITURE ON THE GROUNDS OF COMMERCIAL EXPEDIENCY. THE A.O. DISMISSED THE CLAIM OF THE ASSESSEE HOLDING THAT THE LIC PREMIUM WAS NEVER CONSIDERED AS PERQUI SITE IN THE HANDS OF THE EMPLOYEE AT THE TIME OF COMPUTING THE TDS LIABILITY . ONLY WHEN IT WAS POINTED OUT TO THE ASSESSEE, THE ASSESSEE FURNISHED THE COM PUTATION OF TAXABILITY OF EMPLOYEES AFTER INCLUDING THE SAID PREMIUM. THE A. O. WAS NOT CONVINCED WITH THE CLAIM OF THE ASSESSEE AND DISALLOWED RS. 2,64,2 20/-. 4. ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) B UT WITHOUT ANY SUCCESS. 5. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE STATED THAT THERE ARE CERTAIN DOCUMENTS/DETAILS WHICH NEED TO BE FURNISHED IN SUP PORT OF THE CLAIM. ITA NO. 412/ AHD/2016 . A.Y. 2011-1 2 3 6. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE ORD ERS OF THE AUTHORITIES BELOW. THERE IS NO DISPUTE THAT THE ASSESSEE HAS PA ID INSURANCE PREMIUM ON THE POLICIES TAKEN IN THE NAME OF THE EMPLOYEES. THE CL AIM OF THE ASSESSEE THAT THE INSURANCE POLICY IS TAKEN IN THE CATEGORY OF EMPLOY ER EMPLOYEE POLICY OF THE LIC NEEDS VERIFICATION. IN OUR CONSIDERED OPINION, THIS IS A FIT CASE FOR RESTORATION TO THE FILES OF THE A.O. FOR DE NOVO AS SESSMENT. WE ACCORDINGLY RESTORE THE ENTIRE ASSESSMENT TO THE FILES OF THE A .O. THE ASSESSEE IS DIRECTED TO FURNISH THE DETAILS OF THE INSURANCE POLICY. THE AS SESSEE IS FURTHER DIRECTED TO SHOW THAT THE EMPLOYEES REMAINED IN EMPLOYMENT THRO UGHOUT THE YEAR AND FURTHER EXPLAINED THE PROCEDURE ADOPTED BY THE ASSE SSEE IF IN CASE, THE EMPLOYEE LEAVES THE EMPLOYMENT AND THE INSURANCE PR EMIUM IS PAID ON HIS POLICY. THE A.O. IS DIRECTED TO VERIFY THE DETAILS AFRESH AND THEN DECIDE WHETHER THE INSURANCE PREMIUM IS TO BE ALLOWED ON THE GROUN DS OF COMMERCIAL EXPEDIENCY AS BUSINESS EXPENDITURE. 7. THE APPEAL IS ALLOWED FOR STATISTICAL PURPOSE WITH ABOVE DIRECTIONS. ORDER PRONOUNCED IN OPEN COURT ON 26 - 02- 20 18 SD/- SD/- (RAJPAL YADAV) (N. K. BILLAIYA) JUDICIAL MEMBER TRUE COPY ACCOUNTANT MEMBER AHMEDABAD: DATED 26 /02/2018 RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE.