Law:

Section:

Section 10(2)(xv) of the indian income-tax act, 1922 [corresponding to section 37(1) of the income-tax act, 1961]-Business expenditure-Year in which deductible-Assessee-Company put into effect a pension and life insurance plan for its foreign employees and took out policies from a society in their names in 1948-Original rules under said plan enabled assessee to receive moneys assured in certain circumstances and assessee had also a right to direct a particular mode of disposal of funds of plan-Until assessment year 1956-57 only those payments made by assessee on policies in respect of which payments had been made by society to employees were allowed as deduction to assessee-Subsequently, on 21-12-1957 relevant rules under said plan were amended and it was provided that amounts due under policies would be paid to plan members entitled thereto and, therefore, assessee was left with no control over moneys-Whether impugned payments of premium made before 21-12-1957 were also deductible in assessment year 1959-60, corresponding to previous year from 1-11-1957 to 31-10-1958-held, on facts, yes Facts The assessee-company put into effect a pension and life assurance plan for its European em- ployees in 1948. Pursuant to the plan, it took out policies with a life assurance society in the names of those employees. The original rules under the plan enabled the assessee to obtain receipt of the moneys assured in certain circumstances and the assessee had also a right to direct a particular mode of disposal of the funds of the plan. The assessee claimed a deduction every year of the sums paid by it by way of its contribution to the premium in respect of the said policies. Originally, the amount so contributed by the assessee towards payment of the premium was allowed by the department as a deductible expense. For the first time, however, the ITO disallowed the claim in respect of the assessment year 1956-57. On appeal, the Tribunal allowed in part the assessee's claim holding that all the contributions made in the relevant year by the assessee towards the premium on the life policies of the plan members were not allowable as deductions in the hands of the assessee, and what…

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