|CORAM:||A. D. Jain (JM), Pramod Kumar (AM)|
|CATCH WORDS:||keyman insurance|
|COUNSEL:||Y. K. Sud|
|DATE:||August 31, 2015 (Date of pronouncement)|
|DATE:||September 11, 2015 (Date of publication)|
|FILE:||Click here to view full post with file download link|
|S. 10(10D): Keyman Insurance: Even a "United Linked Endowment Assurance Plan" with the main object of guaranteed returns rather than life insurance is a "keyman insurance" as defined in s. 10(10D). The fact that policy was not termed as a "keyman insurance" and the fact that the IRDA Guidelines disapproved the issue of such policies is irrelevant|
All that is required for an insurance policy to meet the requirements of Section 10(10D), therefore, has to be – (a) it should be a life insurance policy; (b) it should be taken by the assesse on the life of another person who is, or was, an employee of the assesse or is related to the business of the assesse is any manner. As long as a policy is an insurance policy, whether it involves a capital appreciation or is under any other investment scheme, it meets the tests laid down under section 10(10D). Even if such an inference is desirable, as long as it does not emerge from the plain words of the statute, it cannot be open to supply the same. The concepts of term policy, pure life policy and the IRDA guidelines find no mention in the statutory provisions. But even if these concepts ought to be incorporated in this statutory provision of the Income Tax Act to make it more meaningful and workable, it cannot be open to any judicial forum to supply these omissions. The IRDA guidelines, no matter how relevant as these guidelines may be, have no role to play in the interpretation of the statutory provisions. The fact that the insurance policies in question were not termed as keyman insurance policies is irrelevant. The keyman insurance policy is a defined concept and as long as it meets the requirements of this definition, the terminology given by the insurers have no relevance for the purposes of the Income Tax Act.