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TMI Blog2014 (1) TMI 1030X X X X Extracts X X X X X X X X Extracts X X X X ..... Income Tax Appellate Tribunal for assessment year 2002-03 to 2006-07 and the reasons assigned for the same are wrong and contrary to the facts of the case and provisions of the Act and Rules made thereunder. 1.3 On the facts and in the circumstances of the case and in law the learned CIT(A) ought to have allowed the appellant's claim for deduction in respect of investments written off which was without prejudice to the appellant's claim for exemption of the profit on sale of investments and not doing so is wrong and contrary to the facts of the case and the provisions of the Income Tax Act, 1961, and rules made thereunder. 1.4 On the facts and in the circumstances of the case and in law the learned CIT(A) failed to appreciate that the disallowance of the investments written off and debited to Profit & Loss Account was contrary to the provisions of section 44 of the Act and the Rule 5 of the First Schedule thereto. 1.5 On the facts and in the circumstances of the case and in law the authorities below failed to appreciate that the disallowance of investments written off along with the disallowance of the profit on sale of investment amounts to double addition as any profit realize ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,71,64,388/- and Rs.2,31,44,10,397/- on account of interest on tax free bonds and dividend income earned from investment in securities as taxable income of the business of insurance by holding that no exemption can be claimed by the appellant company under any other provisions of the Act as the same cannot be taken out under Rule 5 of the First Schedule to the Income Tax Act, 1961 and the reasons assigned for doing so are wrong and contrary to the facts and circumstances of the case, provisions of Income Tax Act, 1961, and Rules made thereunder. 3.1 On the facts and in the circumstances of the case and in law the learned CIT(A) having held that the provisions of section 115lB are not applicable to the appellant should not have treated the ground raised in this respect before him as infructuous and the reasons assigned for doing so are wrong and contrary to the facts and circumstances of the case, provisions of Income Tax Act, 1961, and Rules made thereunder. 3.2 On the facts and in the circumstances of the case and in law the learned CIT(A) failed to appreciate that the appellant had offered total income as computed u/s l15lB in the Return of Income there being loss under the nor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owever, in further appeal, the ITAT vide order dated 25.02.12 passed in ITA No.3554/M/11, deleted the additions. The co-ordinate bench of the Tribunal while deleting the additions on the identical issue has observed as under: "3. Issue No.1: Addition on account of 'profits on sale of investments'. (Modified ground of appeal No.1.1 (Original ground 1.1 and 1.2)). The assessee had earned an amount of Rs. 819,26,24,325/- as profit on sale of investment which was claimed as exempt. The Assessing Officer had considered that amount has to be brought to tax which was affirmed by the CIT (A). At the outset it was submitted that this issue has been considered and adjudicated upon by this Tribunal in assessee's own case for the AY 2005-06 in ITA No.7437/Mum/2007 vide order dated 14/02/2009. The same was also followed in assessee's own case for AY 2006-07 in ITA No.6260/Mum/08, dated 10th December, 2010. The Tribunal has adjudicated this issue in Para 5 to 8 in AY 2005-06 as under: "5. The first ground relates to confirming addition of Rs.4,648,476,597/ - on account of profit on sale of investment. 6. The Ld. A.R. of the assessee stated that this issue is covered in favour of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relief accordingly." Following the decision of the Tribunal in the case of the assessee for earlier years, we allow the ground for the year under consideration also. Accordingly following the orders of AY 2005-06, which in turn was followed in AY 2006-07 in assessee's own case, we decide the issue in favour of the assessee and against the Revenue. The addition made on account of profit on sale of investment is accordingly deleted. The assessee's Counsel also placed on record similar decisions in the following cases in support of its contention: i) ITAT Pune in Bajaj Allianz (ITA No.1447/Pune/07 - Para 3 to 8) ii) ITAT Mumbai in HDFC ERCO GIC (ITA No.338/Mum/ 2009 - Para 2 to7). iii) TATA AIG General Insurance Co. Ltd (ITA No.2597/Mum/2009 (Para 17 to 20). iv) Reliance General Insurance Co Ltd vs. DCIT -3(3) in ITA no/781/1520/6262 dt 30-04-2010. v) Reliance General Insurance Co Ltd vs. Jt.CIT-3(3) -in ITA no3083 etc dtd. 02-02-2010 Since the issue is covered by assessee's own case, there is no need to discuss/extract the relevant orders quoted above into this order. Suffice to say that this issue is covered in assessee's favour in various orders and accordingly the issue is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 10 is directly governed by the decision rendered by the Division Bench in Life Insurance Corporation vs. Commissioner of Income-tax (supra) following the earlier decision in Commissioner of Income-tax vs. New India Assurance Co. Ltd. (supra). The Assessing Officer could not have ignored the binding precedent contained in the two Division Bench decisions of this Court. Moreover, the Assessing Officer in allowing the benefit of the exemption in the order of assessment under Section 143(3) specifically relied upon the view taken by the CBDT in its communication dated 21 February 2006 to the Chairman of IRDA. The communication clarifies that the exemption available to any other assessee under any clauses of Section 10 is also available to a person carrying on non-life insurance business subject to the fulfillment of the conditions, if any, under a particular clause of Section 10 under which exemption is sought. It needs to be emphasised that is not the case of the Assessing Officer that the assessee had failed to fulfil the condition which attached to the provisions of the relevant clauses of section 10 in respect of which the exemption was allowed. This of course is apart from claus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. assessment year 2007-08. 10. While dealing with the identical issue, the co-ordinate bench of the Tribunal has observed as under: "10. Issue No.7 Non-applicability of provisions of section 115JB i.e. MAT (Modified Ground of Appeal No.4 - Original Ground of Appeal No.4). The assessee had offered income under section 115JB book profit in the original return and subsequently in revised return. Before the CIT (A) it raised an additional ground where it was contended that provisions of section 115JB are not applicable to the assessee. As this ground goes to the root of taxability of book profit under section 115JB, the same was admitted by the CIT (A) and adjudicated as under: "15.2 In the course of appellate proceedings, it has been informed that the accounts of appellant are prepared in accordance with the Insurance Act and not in accordance with Schedule VI of the Companies Act. In particular my attention has been drawn to the provisions of section 211 of the Companies Act which deals with the form and contents of balance sheet and profit and loss account. It has been argued that the proviso to sub- section1 categorically specifies that the provisions shall not be applicable fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the Hon'ble Supreme Court in the case of Goetze India Ltd reported in 284 ITR 323. 11. It was submitted by the learned Counsel that the issue of non applicability of 115JB was decided by the Coordinate Bench in the case of Krung Thai Bank PCL vs. Jt DIT in ITA No.3390 of 2009. It was further submitted that the CIT (A) is bound to grant relief following the decision of the Hon'ble Supreme Court in the case of National Thermal Power Corporation vs. CIT 229 ITR 383 followed by the Hon'ble Bombay High Court judgment in the case of Set Satellite (Singapore) Pte Ltd vs.DDIT 307 ITR 205. It was also submitted that the Coordinate Bench in the case of Chicago Pneumatic India Limited (15 SOT 252) also considered that Assessing Officer is bound to assess the correct income and he may grant relief/refunds suo motto and can do so on being pointed out by the assessee in the course of assessment proceedings for which the assessee has not filed revised return. On the principles laid down in the above cases, it was submitted that the CIT (A) erred in not granting the relief and requested for granting relief from application of provisions of section 115JB. The learned Departmental Representat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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