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Case Law Details

Case Name : Loesche India Pvt. Ltd. Vs Add. CIT (ITAT Delhi)
Appeal Number : ITA No. 295/Del/2016
Date of Judgement/Order : 13/08/2018
Related Assessment Year : 2010-11
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Loesche India Pvt. Ltd. Vs Add. CIT (ITAT Delhi)

The record reveals that the assessee had paid the insurance premiums of the employees’ family members in terms of employment Rules framed by the assessee-company there for. Therefore, it can hardly be said that the impugned expenditure were not incurred wholly and exclusively for the purpose of business, which is the real intent of Section 37(1) of the IT Act. The ld. Authorities below could not bring any evidence on record to substantiate that the payments so made by the assessee-company had no nexus with the business of the assessee. Even otherwise, it is not necessary that all the payments/expenditure incurred by the assessee should have direct bearing on earning of income, but some payments are also made under certain business expediency. In the instant case, The payments claimed to have been made by the assessee for the insurance premium of such members who have attained the age of 21 years or more or who are the remote relations of assessee have already been offered by the assessee to tax before the ld. CIT(A), as also noted in the written submissions above. The ld. Authorities below appear to have rejected the claim of the assessee that these payments were in the nature of perquisites to the employees as contemplated under sub-clause (iv) of section 17(2) of the IT Act, according to which any sum paid by the employer in respect of any obligation which, but for such payment, would have been payable by the assessee, shall be included in perquisites. However, in view of proviso (iii) & (iv) appended to this section clearly prohibit the application of section 17(2) in certain eventualities as contained in these provisos. We do not find any justification to discard the impugned claim of assessee made u/s. 37(1) of the IT Act.


This is an appeal filed by the assessee against the order of the ld. CIT(A)-V, Delhi dated 27.11.2015 for the assessment year 2010-11 on the following grounds :

“1. That the order of the Learned Commissioner of Income Tax [Appeals V] New Delhi [hereinafter stated as CIT [All is bad in law and on facts.

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