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2019 (2) TMI 923 - HC - Income TaxDepreciation on UPS @60% - Held that - Tribunal was correct holding that UPS is the part of computer and entitled for depreciation at 60% - Decided against the revenue MAT/115JB applicability On Insurance Companies - Held that - As rightly pointed out by the Tribunal, the Insurance Companies prepare profit and loss account as per the guidelines issued by the Insurance Regulatory and Development Authority of India and not as per Part II and III of Schedule VI of Companies Act. Furthermore, the applicability of Schedule VI of the Companies Act was specifically excluded in respect of Insurance Companies. The revenue has not been able to dislodge this finding before us in these appeals. We find that the conclusion arrived at by the Tribunal in this regard is proper and valid. - Decided in favour of assessee MAT computation on Solatium Fund - revenue contending that the solatium fund has been estimated in a routine manner and this amount is an unascertained liability and therefore, liable to be disallowed while computing book profit under Section 115JB - Held that - We find that the contribution of 0.1% of gross premium from motor vehicle insurance is done as per the directions given by the Government of India and this amount has been paid by the assessee as per the decision taken by the General Insurance Council in the meeting held on 04.02.2005. Therefore, we find that the Tribunal was fully right in rejecting the case of the revenue stating that the estimation was done in a routine manner and it is an unascertained liability. See THE COMMISSIONER OF INCOME TAX VERSUS BAJAJ ALLIANZ GENERAL INSURANCE CO. LTD. 2016 (11) TMI 1256 - BOMBAY HIGH COURT . Commission for receipt of reinsurance - Held that - CIT(A) took note of the decision taken in the assessee's own case for the assessment year 2009-2010 in which the assessment for the year 2008-2009 was followed and the assessee succeeded before the CIT(A) for the assessment year 2008-2009, wherein the CIT(A) noted that as a matter of industrial practice it was termed as commission on reinsurance premium received , however, in substance it is discount on re-insurance premium received by an Insurance Company from an other Insurance Company. We find that the Tribunal rightly decided the issue in favour of the assessee. TDS on Survey Fees u/s 195 - fee has been paid for utilizing the expertise of the surveyor and therefore, tax has to be deducted at source - Held that - CIT(A) on going through the contentions raised by the assessee pointed out that disallowance under Section 40(a)(i) can be made only if taxes are not withheld on income chargeable to tax in India. On facts, it held that the payment was made to Royal and Sun Alliance, U.K. to settle the amounts of various surveyors on cost to cost basis and the surveyor does not make available any technical knowledge which can independently be applied by the assessee and consequently, held that the payment by the assessee would not be taxable as fees for technical services in the hands of the recipient. Furthermore, it is noted that in the absence of permanent establishment, the income in the hands of the recipient is also not taxable in India. The above view taken by the CIT(A) was rightly affirmed by the Tribunal and we find that the revenue has not made out any grounds to interfere - decided against revenue
Issues:
1. Depreciation on UPS 2. MAT/115JB on Insurance Companies 3. Solatium Fund 4. Commission for receipt of reinsurance 5. TDS on Survey Fees Depreciation on UPS: The court dismissed the appeals filed by the revenue on this ground based on a previous judgment. The substantial question of law was answered in favor of the assessee. MAT/115JB On Insurance Companies: The court upheld the Tribunal's decision that insurance companies prepare accounts as per guidelines from the Insurance Regulatory and Development Authority, not the Companies Act. The appeals filed by the revenue were dismissed, and the question of law was answered in favor of the assessee. Solatium Fund: The court rejected the revenue's appeal, stating that the contribution to the Solatium fund was not a contingent liability and was correctly estimated. The decision was supported by a previous judgment, and the appeals were dismissed. Commission for receipt of reinsurance: The court affirmed the Tribunal's decision in favor of the assessee, stating that the commission was a discount on reinsurance premium and not liable for taxation. The appeals filed by the revenue were dismissed. TDS on Survey Fees: The court upheld the Tribunal's decision that the survey fee paid to a non-resident surveyor was not taxable in India as per DTAA. The revenue's appeals were dismissed, and the substantial question of law was answered against the revenue. In conclusion, all the tax case appeals were dismissed, and no costs were awarded. The connected miscellaneous petitions were closed as well.
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