2013 (7) TMI 1204 - AT - Income Tax

Summary

Issues involved: The judgment involves issues related to the addition made by the Assessing Officer on account of loss from Jeevan Suraksha Fund, the applicability of provisions of section 115O read with section 115Q of the Income Tax Act, and the deletion of additions by the CIT(A) for the assessment years 2007-08 and 2008-09.

Issue 1 - Addition on account of loss from Jeevan Suraksha Fund:
The Assessing Officer contended that the income from Jeevan Suraksha Fund should not be included in the total income as per section 10(23AAB) of the Income Tax Act. However, the ITAT had previously ruled in favor of the assessee in assessment years 2002-03 to 2006-07, and the Hon'ble Bombay High Court also supported this decision. The CIT(A) relied on these precedents and directed the AO to delete the addition, stating that the issue was already settled by the High Court decision. Consequently, the ground raised by the revenue was rejected.

Issue 2 - Applicability of provisions of section 115O read with section 115Q:
The Assessing Officer argued that the Government of India, being a shareholder in the assessee corporation, should pay additional tax under section 115O of the Income-tax Act on the distributed dividend. However, it was contended during the appellate proceedings that the amount paid by the Life Insurance Corporation to the Government of India is not in the nature of dividend as defined under the Income-tax Act. Previous decisions by the ITAT in favor of the assessee for various assessment years supported this argument. The CIT(A) held that the provisions of section 115O were not applicable to the assessee corporation and directed the deletion of the addition made on this issue, in line with the previous decisions.

Conclusion:
The ITAT, Mumbai dismissed the appeals filed by the revenue for both assessment years 2007-08 and 2008-09, as the issues had already been settled in favor of the assessee based on previous decisions and the CIT(A) had correctly applied the law. The orders of the CIT(A) were upheld, and the appeals were consequently dismissed on 10th July 2013.