Premium paid under Keyman Insurance policy allowable as business expense

Brief of the case:

ITAT held in M/s F.C Sondhi & Co.(India) P Ltd Vs The DCIT that the premium paid on the keyman Insurance Policy would be allowed as a business expense because the same had been paid for the growth and stability of business and it was irrespective of the fact that the funds had been invested in the mutual funds or in capital appreciation scheme. Keyman insurance policy was a policy on the life of another person who is an employee of the assessee or is connected with the business of the assessee. ITAT relied on the decision given in case of M/s Suri Son Vs ACITin ITA No 37(Asr)/2010 where in it was decided that the keyman insurance policy was to safeguard the business from mishappening.

Facts of the case:

The assessee had taken keyman insurance policy on the life of Marketing director and claimed premium as a business deduction but AO disallowed the same on the basis that as per IRDA keyman Insurance policy was term assurance policy which was upheld by CIT(A). Revenue was also of the view that the policy could not be taken of that person who had not yet born.

Contention of the assessee:

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