DCIT 14(2), MUMBAI V. KASHIPRASAD BIDWATKA (HUF) ( PROP M.S. G.K. INTERNATIONAL), MUMBAI

ITA 5611/MUM/2010

• Counselvise Citation: 561119914 RSA 2010
• Duration Of Justice: 1 year(s) 6 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 09-07-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P K B MENON
• Assessee Lawyers: ANUP JAIN

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: MUMBAI BEFORE SHRI R.S. PADVEKAR, JUDICIAL MEMBER AND SHRI RAJENDRA SINGH, ACCOUNTANT MEMBER ITA NO.5610/MUM /2010 (ASSESSMENT YEAR: 2004-05) ITA NO.5611/MUM/2010 (ASSESSMENT YEAR: 2006-07) DY. COMMISSIONER OF INCOME-TAX-14(2), EARNEST HOUSE, 3 RD FLOOR, NARIMAN POINT, MUMBAI -400 021 .... APPELLANT VS M/S. KASHIPRASAD BIDWATKA (HUF), (PROP. M/S. G.K. INTERNATIONAL). SWADESHI MARKET, ROOM NO.K, 2 ND FLOOR, KALBADEVI ROAD, MUMBAI -400 002 .. RESPONDENT PAN: AAAHK 0673 H APPELLANT BY: SHRI P.K.B. MENON RESPONDENT BY: SHRI ANUP JAIN DATE OF HEARING: 19.12.2011 DATE OF PRONOUNCEMENT: 31.01.2012 O R D E R PER R.S. PADVEKAR, JM BOTH THESE APPEALS ARE FILED BY THE REVENUE CHALLEN GING THE IMPUGNED ORDERS OF THE LD. CIT (A) DELETING THE ADD ITION MADE BY THE A.O. IN RESPECT OF KEY-MAN INSURANCE PREMIUM PAID B Y THE ASSESSEE. THE ISSUE AS WELL AS THE FACTS ARE COMMON IN BOTH T HE ASSESSMENT YEARS AND HENCE, BOTH THESE APPEALS ARE DISPOSED OF F BY THIS COMMON ORDER. WE FIRST TAKE THE APPEAL FOR THE A.Y. 2004- 05. THE REVENUE HAS TAKEN THE FOLLOWING EFFECTIVE GROUND:- 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT (A) HAS ERRED IN DELETING THE ADDI TION OF ` ITA 5610/MUM/2010 ITA 5611/MUM/2010 M/S. KASHIPRASAD BIDWATKA (HUF), 2 16,91,380/- BEING KEYMAN INSURANCE EXPENSES MADE ON THE GROUND THAT THE ASSESSEE HAD NOT PROVED THAT TH E POLICY TAKEN ON THE LIFE OF SHRI YOGESH AGARWAL WHOSE EXIS TENCE WAS VERY IMPORTANT FOR THE PROFITABILITY OF THE BUS INESS. 2. THE FACTS PERTAINING TO THE ISSUE ARE AS UNDER. THE ASSESSEE IS A HUF AND ENGAGED IN THE BUSINESS OF MERCHANT, PROC ESSOR, COMMISSION AGENT OF YARNS AND TEXTILES. THE ASSESS EES CASE WAS REOPENED BY ISSUING THE NOTICE U/S.148 AS IT WAS NO TICED BY THE A.O. THAT THE ASSESSEE HAS DEBITED KEYMAN INSURANCE PRE MIUM OF ` 16,91,380/- IN THE PROFIT AND LOSS ACCOUNT AND HAD CLAIMED DEDUCTION OF M/S. G.K. INTERNATIONAL OF WHICH THE ASSESSEE IS A PROPRIETOR. ON THE PERUSAL OF THE COPY OF THE LIC POLICY, IT WAS N OTICED BY THE A.O. THAT M/S. G.K. INTERNATIONAL HAS TAKEN THE POLICY I N THE NAME OF SHRI YOGESH AGARWAL ON 31.03.2004. SHRI YOGESH AGARWAL WAS PAID SALARY OF ` 2,40,000/- FROM M/S. G.K. INTERNATIONAL. THE A.O. WAS OF THE OPINION THAT SHRI YOGESH AGARWAL WAS NOT THE KEY P ERSON IN THE BUSINESS OF THE ASSESSEE CONSIDERING THE QUANTUM OF THE SALARY PAID. THE A.O. WAS ALSO OF THE OPINION THAT THE KEYMAN IN SURANCE POLICY TAKEN BY M/S. G.K. INTERNATIONAL ON THE LIFE OF SHR I YOGESH AGARWAL IS COMPLETELY OUT OF PROPORTION AND WITHOUT ANY BUSINE SS EXPEDIENCY. THE A.O. MADE DISALLOWANCE OF THE ENTIRE PREMIUM PA ID U/S.40A(2)(B) AND MADE THE ADDITION OF ` 16,91,380/- BY ENTIRELY DISALLOWING THE CLAIM OF THE ASSESSEE HUF ON THE INSURANCE POLICY O F SHRI YOGESH AGARWAL. 3. SAME WAY, IN THE A.Y. 2006-07 THE ASSESSMENT WAS COMPLETED U/S.143(3) AND THE A.O. MADE THE DISALLOWANCE IN RE SPECT OF THE PREMIUM ON THE POLICY TAKEN ON THE LIFE OF SHRI YOG ESH AGARWAL WHICH WAS OF ` 16,91,380/-. THE REASONS GIVEN IN BOTH THE ASSESS MENT YEARS ARE IDENTICAL. THE ASSESSEE CARRIED THE ISSUE BEFO RE THE LD. CIT (A) AND LD. CIT (A) ALLOWED THE RELIEF IN BOTH THE ASSE SSMENT YEARS. NOW, ITA 5610/MUM/2010 ITA 5611/MUM/2010 M/S. KASHIPRASAD BIDWATKA (HUF), 3 THE REVENUE IS IN APPEAL BEFORE US RAISING THE GRIE VANCES AGAINST THE ORDERS OF THE LD. CIT (A). 4. WE HAVE HEARD THE PARTIES. THE LD. COUNSEL SUBM ITS THAT THE IDENTICAL ISSUE HAS COME UP FOR CONSIDERATION BEFOR E THE TRIBUNAL IN THE ASSESSEES OWN CASE IN THE A.Y. 2005-06 AND THE TRIBUNAL HAS CONFIRMED THE ORDER OF THE LD. CIT (A) BY DISMISSIN G THE APPEAL FILED BY THE REVENUE ON THIS ISSUE. THE LD. COUNSEL HAS FIL ED THE COPY OF THE TRIBUNAL ORDER IN THE ASSESSEES OWN CASE FOR THE A .Y. 2005-06 (ITA NO.6016/M/2008) DATED 27.08.2010 WHICH IS PLACED ON RECORD. THE LD. D.R. FAIRLY CONCEDED THAT THE ISSUE HAS BEEN DE CIDED IN FAVOUR OF THE ASSESSEE BY THE TRIBUNAL IN HIS OWN CASE FOR TH E A.Y. 2005-06. WE, THEREFORE, RESPECTFULLY FOLLOWING THE ORDER OF THE TRIBUNAL IN THE ASSESSEES OWN CASE FOR THE A.Y. 2005-06, CONFIRMED THE ORDERS OF THE LD. CIT (A) IN BOTH THE ASSESSMENT YEARS. 5. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE A RE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 3 1ST JANUARY 2012. SD/- ( RAJENDRA SINGH ) ACCOUNTANT MEMBER SD/- ( R.S. PADVEKAR ) JUDICIAL MEMBER MUMBAI, DATE: JANUARY 2012 COPY TO:- 1) THE APPELLANT. 2) THE RESPONDENT. 3) THE CIT (A)25, MUMBAI. 4) THE CIT-CITY-14, MUMBAI. 5) THE D.R. A BENCH, MUMBAI. ORDER PRONOUNCED IN THE COURT ON 31/01/2012 SD/- ( R.S. PADVEKAR ) JUDICIAL MEMBER SD/- ( J. SUDHAKAR REDDY ) ACCOUNTANT MEMBER BY ORDER ASSTT. REGISTRAR I.T.A.T., MUMBAI *CHAVAN