2021 (9) TMI 228 - AT - Income Tax

Income from pension fund u/s 10(23AAB) - CIT(A) admitted the fresh claim - Claim of exemption when the income is taxable u/s 44 - HELD THAT - As relying on own case 2019 (8) TMI 1754 - ITAT MUMBAI in the instant case the assessee filed revised computation of claim at the time of assessment proceedings - CIT(A) accepted the enhanced claim made in revised computation. Once the assessee is held to be eligible for claiming the benefit of exemption u/s.10(23AAB) of the Act, the exemption of correct amount should be allowed to the assessee. If the assessee failed to revise its claim by way of revised return of income, for any reason whatsoever, the assessee is not estopped to make correct claim by way of revised computation. The revised claim can be entertained in appellate proceedings. We find no infirmity in the action of CIT(A) to allow revised enhanced claim. The ground no.1 of the appeal by Revenue is thus dismissed. Deduction on dividend income u/s 10(34) - HELD THAT - As relying on own case . 2019 (8) TMI 1754 - ITAT MUMBAI AO is directed to allow appellant's claim of sec.10(34). Disallowance u/s 14A - HELD THAT - As relying on ICICI PRUDENTIAL INSURANCE CO LTD. 2012 (11) TMI 13 - ITAT MUMBAI we hold that the provisions of section 14A are not attracted in the case of Insurance Companies.

Summary

Issues Involved:
1. Exclusion of income from pension fund under section 10(23AAB).
2. Deduction claimed on dividend income under section 10(34).
3. Disallowance under section 14A related to expense on exempt income.

Detailed Analysis:

1. Exclusion of Income from Pension Fund under Section 10(23AAB):

The Revenue contested the CIT(A)'s decision to exclude income from the pension fund amounting to ?17,52,19,809 under section 10(23AAB) of the Income Tax Act, 1961. The Tribunal noted that this issue had been previously adjudicated in favor of the assessee in earlier assessment years (AYs), specifically AY 2013-14 (ITA No. 1912/Mum/2018). The Tribunal upheld the CIT(A)'s decision, referencing the Bombay High Court's ruling in the case of LIC of India Ltd. (338 ITR 212), which established that losses from pension funds should be excluded while determining actuarial valuation surplus from insurance business under section 44. The Tribunal found no reason to deviate from this precedent and dismissed the Revenue's appeal on this ground.

2. Deduction Claimed on Dividend Income under Section 10(34):

The Revenue challenged the CIT(A)'s decision to allow a deduction on dividend income amounting to ?24,78,31,300 under section 10(34). The Tribunal referenced its own previous rulings in the assessee's favor for AYs 2010-11, 2011-12, and 2013-14, noting that the CIT(A)'s decision was consistent with these precedents. The Tribunal reiterated that the CIT(A) had correctly allowed the deduction, following judicial rulings such as ICICI Prudential Insurance vs. ACIT and LIC vs. Addl. CIT, which supported the assessee's claim. Consequently, the Tribunal dismissed the Revenue's appeal on this ground as well.

3. Disallowance under Section 14A Related to Expense on Exempt Income:

The Revenue disputed the CIT(A)'s deletion of disallowance made under section 14A related to expenses incurred for earning exempt income. The Tribunal referenced multiple decisions, including SBI Life Insurance Co. Vs. JCIT, ICICI Prudential Insurance v/s. ACIT, and Birla Sunlife Insurance Co. Ltd., which consistently held that section 14A does not apply to insurance companies. The Tribunal noted that the Revenue failed to present any contrary decisions. Thus, the Tribunal upheld the CIT(A)'s decision to delete the disallowance under section 14A, dismissing the Revenue's appeal on this ground.

Conclusion:

The Tribunal upheld the CIT(A)'s order in its entirety, dismissing the Revenue's appeal on all grounds. The Tribunal's decision was pronounced in the open court on August 30, 2021.