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2023 (7) TMI 898 - AT - Income TaxBenefit of Section 10(38) - Payment of Securities Transaction Tax (STT) - assessee who carries on general insurance business - HELD THAT - As decided in own case 2023 (1) TMI 1202 - ITAT DELHI assessee is entitled to exemption under section 10. Therefore, we do not see any reason to differ from the order of the CIT (A) where he has allowed assessee's claim of exemption under section 10(23AAB) of surplus of Participating Pension Business and also dividend under section 10(34). Accordingly Revenue ground on this issue is rejected. Disallowance of depreciation - assessee failed to furnish relevant information before the Assessing Officer along with Audit Report - HELD THAT - As decided in assessee own case 2021 (7) TMI 92 - ITAT DELHI f acts of the present assessment year are different as Ld. AR sufficiently demonstrated that the details were very much available before Ld. AO and Assessing Officer has not taken any steps to verify the same. In the year under consideration also, the relevant details for addition made to fixed assets in Financial Year 2009-10 have been placed on record by the assessee. The AO has, however, failed to take the same into consideration. We are, therefore, inclined to set aside this issue to the records of the AO for a de novo verification Accordingly this ground raised by assessee stands allowed for statistical purposes. Disallowance being provisions made for standard assets - HELD THAT - This Bench in assessee s own case for A.Y. 2011-12 2023 (1) TMI 1202 - ITAT DELHI has deleted the disallowance we find that there is no enabling mechanism in Rule 5(a) mandating an adjustment to disclosed profits by making an addition on account of provision made for Standard Assets - As under Rule 5 the Statute makes profit disclosed in Profit and Loss account sacrosanct, subject only do adjustments prescribed in Rules 5(a) to 5(c). The case law relied is, therefore, 'distinguishable. The Ld. CIT (A), in AY 2011-12, has also not properly addressed the issue. Relevant statutory provisions have been inadvertently misread and hence not properly understood. We therefore delete the disallowance - Decided in favour of assessee. Benefits u/s 44 qua Section 14A - HELD THAT - It is a settled proposition of law now that as Section 44 of the Act provides a complete code for computation of profit and gain of the business of the assessee insurance company. The assessing officer cannot make any adjustments in the profit of the assessee s business when they are calculated in accordance with the rules contained in first schedule. In assessee s own case for A.Y. 2000-01, 2001-02 co-ordinate Bench 2009 (2) TMI 240 - ITAT DELHI-B have held that in the light of aforesaid provisions of Section 44 of the Act there is no requirement of head wise bifurcation while computing the income u/s 44 in the case of insurance company. Thus, provisions of Section 14A are not relevant to make a disallowance. The findings of Ld. CIT(A) require no interference. The ground is decided against the Revenue.
Issues Involved:
1. Profit on sale of investment 2. Interest income not provided as income 3. Disallowance of depreciation u/s 32 4. Disallowance u/s 14A 5. Guest House Expenses 6. Provision for standard assets Summary: Issue 1: Profit on Sale of Investment The Tribunal considered the Hon'ble Delhi High Court's decision in the assessee's own case, where it was held that income from Profit on Sale/Redemption of Investments is not liable to tax for years prior to AY 2011-12 due to CBDT Circular No. 528 of 1988. For AYs 2011-12 onwards, the Tribunal allowed the assessee's claim for exemption u/s 10(38) of the Act, directing the AO to verify the status of STT payments. Issue 2: Interest Income Not Provided as Income This issue was not specifically detailed in the judgment provided. Issue 3: Disallowance of Depreciation u/s 32 The Tribunal referred to its own decisions in the assessee's case for AY 2010-11 and AY 2011-12, where the matter was remanded back to the AO for verification of relevant details. The Tribunal followed the same approach for the current year, directing the AO to re-examine the details and decide afresh. Issue 4: Disallowance u/s 14A The Tribunal upheld the CIT(A)'s deletion of the addition made u/s 14A, stating that Section 44 of the Act provides a complete code for the computation of profit and gains of the insurance business, and hence, disallowance under Section 14A is not applicable. Issue 5: Guest House Expenses The Tribunal upheld the CIT(A)'s deletion of 50% disallowance on account of expenses incurred on the guest house, as there were no distinguishing facts presented by the Revenue. Issue 6: Provision for Standard Assets The Tribunal referred to its own decisions in the assessee's case for AY 2010-11 and AY 2011-12, where the disallowance of provision for standard assets was deleted. The Tribunal reiterated that there is no enabling mechanism in Rule 5(a) mandating an adjustment to disclosed profits by making an addition on account of provision made for standard assets. Conclusion: The appeal of the Revenue was dismissed, and the appeal of the assessee was allowed partly, with specific issues remanded back to the AO for re-examination. The Tribunal's decisions were consistent with previous rulings in the assessee's own case, emphasizing the application of Section 44 and related provisions for the computation of income for insurance companies.
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