Case Law Details
ITO Vs Creation Publicity Limited (ITAT Mumbai)
ITAT Mumbai held that a Keyman Insurance Policy provides for an insurance policy taken by a business organisation on the life of an employee and hence allowable as business expenditure.
Facts- The assessee had paid insurance premium for policies taken life of keyman of the company. The assessee had paid 6,79,007/- which according to AO is not allowable expenses as insurance paid was not purely life insurance policies.
AO has mainly disallowed the claim stating that the word, ‘Keyman’ was not written by the insurance company on the receipt issued for payment of premium.
Conclusion- The Hon’ble Bombay High Court in the case of CIT 20 V/s M/s B.N. Exports has held that A Keyman Insurance Policy of the Life Insurance Corporation of India, etc., provides for an insurance policy taken by a business organisation or a professional organisation on the life of an employee, in order to protect the business against the financial loss, which may occur from the employee’s premature death.
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