DCIT, Ludhiana V. Auto Forging, Ludhiana

ITA 693/CHANDI/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 80935 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 4 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-10-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 08-10-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 06-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES A CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI T.R. SOOD, ACCOUNTANT MEMBER ITA NO. 693/CHD/2013 ASSESSMENT YEAR: 2005-06 THE DCIT, VS. M/S. AUTO FORGING, CIRCLE 1 D-240, PHASE VI LUDHIANA FOCAL POINT LUDHIANA PAN NO.AABFA8800H (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI MAHAVIR SINGH RESPONDENT BY : SHRI. ASHOK GOYAL DATE OF HEARING : 08/10/2014 DATE OF PRONOUNCEMENT : 17/10/2014 ORDER PER T.R.SOOD, A.M. THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER DATED 12/03/2013 OF CIT (APPEALS)-I, LUDHIANA. 2. IN THIS APPEAL REVENUE HAS RAISED THE FOLLOWING GROUND:- I) THAT THE LD. CIT(A), HAS ERRED IN LAW IN DELETIN G THE ADDITION OF RS. 11,52,641/- MADE BY THE A.O. ON ACCOUNT OF DISALLOWANCE OF EXPENDITURE INCURRED BY THE ASSESSEE ON KEYMAN INSURANCE POLICY. 3. AFTER HEARING BOTH THE PARTIES WE FIND THAT DURI NG ASSESSMENT PROCEEDINGS THE QUERY WAS RAISED REGARDING PAYMENT TOWARDS KEYMAN INSURANCE. IN RESPONSE IT WAS SUBMITTED THAT VIDE L ETTER DT 7.8.2010 AND 11.8.2010 AS UNDER:- 2 REPLY TO LETTER DATED 09.07.2010. PLEASE FIND HERE WITH POLICY OF KEYMAN INSURANCE. IN WHICH THE PROPOSER I S M/S. AUTO FORGINGS AND THREE PARTNERS ARE KEYMAN INSURANCERS. THE ASSESSEE HAS ALREADY SUPPLIED YOU CERTIFICATE FROM LIC CERTIFYING THAT THE MONEY PAYA BLE BOTH DEATH / MATURITY IN TERMS OF THESE POLICIES SH ALL BE PAYABLE TO THE FIRM (PROPOSER) THAT IS M/S. AUTO FORGINGS. I AM ATTACHING HEREWITH JUDGMENT OF BOMBAY HIGH COURT IN THE CASE OF CIT V. M/S B.N. EXPORTS (2010 ) 37 DTR (BOM) 381. IN WHICH CASE ANSWERE LIES FOR ALL Y OUR QUERIES AS PER PARA-2 OF THE LETTER DATED 09.7.2010 . I MAY BRING IT TO YOUR KIND NOTICE THAT THE ABOVE S AID CASE WAS REOPENED AT THE INSTANCE OF THE AUDIT PART Y WITHOUT APPLYING HIS MIND WHICH IS ILLEGAL THE ASSESSING OFFICER AFTER DETAILED DISCUSSION AND IN VIEW OF THE DIRECTIONS GIVEN BY THE ADDITIONAL COMMISSIONER RAN GE-I, LUDHIANA OBSERVED THAT PARTNER OF THE FIRM WAS NOT A KEYMAN, THEREFORE, PREMIUM PAID TOWARDS INSURANCE OF SUCH PARTNER AMOUNTING OT RS. 11,52,641/- WAS DISALLOWED. 4. THE LD. CIT(A) FOLLOWING THE DECISION OF HON'BL E BOMBAY HIGH COURT IN THE CASE OF CIT V B.N. EXPORTS IN 323 ITR 178 AND ALSO THE DECISION OF THE CHANDIGARH BENCH OF THE TRIBUNAL IN THE CASE OF ACIT, CIRCLE-I , LUDHIANA VS PARAMOUNT IMPEX DELETED THE ADDITION. 5. BEFORE US LD. DR SUPPORTED THE ORDER OF ASSESSIN G OFFICER. 6. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSES SEE SUBMITTED THAT ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF 3 HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT V LAJ EXPORTS IN ITA NO. 251 OF 2012. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFUL LY. WE HAVE ALSO PERUSED THE DECISION OF HON'BLE PUNJAB & HARYANA HI GH COURT IN THE CASE OF LAJ EXPORTS (SUPRA). THE HON'BLE HIGH COURT HAS CLEARLY HELD THAT IN VIEW OF THE CIRCULAR, ALL THE PAYMENTS OF PREMIUM O N KEYMAN INSURANCE IS ALLOWABLE. THEREFORE, FOLLOWING THAT ORDER WE DEC IDE THE ISSUE IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. 8. IN THE RESULT APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 17.10.2014. SD/- SD/- (BHAVNESH SAINI) (T.R. SOOD) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 17.10.2014 RKK COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT, TH E CIT(A), THE DR