https://www.taxtmi.com/caselaws?id=278318 Keyman insurance premiums paid on policies covering partners are deductible business expenditure when the policies protect the firm against financial loss and maturity proceeds accrue to the firm. The statutory framework and CBDT guidance recognise the business character of such cover. For disallowance relating to exempt income, only expenditure with a proximate nexus to that income may be considered. Interest on partners' capital is not interest on borrowed money or debt, and where sufficient interest-free funds exist and shares are held as stock-in-trade, a borrowed-funds-based proportionate interest disallowance is not justified. The disallowance is confined to a net-interest basis. en-us Fri, 28 Aug 2015 00:00:00 +0530 Fri, 25 Jan 2019 08:01:09 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=278318 Keyman insurance premiums paid on policies covering partners are deductible business expenditure when the policies protect the firm against financial loss and maturity proceeds accrue to the firm. The statutory framework and CBDT guidance recognise the business character of such cover. For disallowance relating to exempt income, only expenditure with a proximate nexus to that income may be considered. Interest on partners' capital is not interest on borrowed money or debt, and where sufficient interest-free funds exist and shares are held as stock-in-trade, a borrowed-funds-based proportionate interest disallowance is not justified. The disallowance is confined to a net-interest basis. Case-Laws Income Tax Fri, 28 Aug 2015 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=278318