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TMI Blog2015 (2) TMI 316X X X X Extracts X X X X X X X X Extracts X X X X ..... or deciding de novo. - Decided in favor of assessee for statistical purposes. Disallowance of deduction claimed u/s 37 - Held that:- We considered it necessary in the light of the arguments advanced before the Bench that the AO shall examine the position of double taxation vis-à-vis the amounts which already stood offered to tax u/s Fringe Benefit Tax. The past position can be considered but simply because it was not challenged in the earlier year is not a good enough reason to resort to ad hocism the AO is directed to ascertain the correct facts and then decided the issue in accordance with law by way of speaking order after giving the assessee a reasonable opportunity of being heard. We restore back this issue to the file of the Assessing Officer. - Decided in favour of assesssee for statistical purposes. Addition made under Section 14A - profits and gains of any business of insurance - Held that:- In view of provisions of Section 44, read with Rule 5 of the First Schedule, the provisions of Section 14A are not applicable in the appellant's case - Decided in favour of assesssee. - IT APPEAL NO. 5551 (DELHI) OF 2010 - - - Dated:- 15-12-2014 - B.C. MEENA AND C.M. GARG, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arm's length price computed by the Appellant. 2.3 The Ld. AO/TPO erred in appreciating the etymological difference in 'Treaty' and 'Facultative' transactions with respect to reinsurance contracts and that the two are not comparable. 3. That on the facts and circumstances of the case and in law, the Ld. AO/TPO erred in invoking the provisions of Section 37 of the Act for disallowing the expenses incurred on courtesies and entertainment amounting to ₹ 47,30,966/-. 4. That on the facts and circumstances of the case and in law the Ld. AO/TPO erred in invoking the provisions of Section 14A of the Act and making a disallowance of ₹ 6,70,000/-. 5. That the Ld. AO has grossly erred in initiating penalty proceedings u/s 271(1)(c) of the Act. 6. That the impugned order passed by the Ld.AO is non speaking in nature. 7. That the orders passed by the Ld. AO in pursuance to the directions of the Dispute Resolution Panel and that of the TPO are bad in law and void ab initio. 4. Ground Nos.1 and 2 including sub-grounds 2.1, 2.2 2.3 are against the addition of ₹ 42,02,000/ - made on account of arm's length price. 5. For the year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lready observed above that assessee company is engaged in the general insurance business and it was in receipt of certain commissions from AEs on account of reinsurance business (both treaty and facultative reinsurance). The TPO made adjustment of ₹ 42,02,200/- for the reason that the commission earned by the assessee from its AEs on account of facultative reinsurance was not at arm's length. The commission on facultative reinsurance was at lower side in comparison to the commission received from treaty reinsurance. The reasons given by the revenue authorities for arriving at such conclusion was that a comparison of a risk profile of a facultative reinsurance business could not be established on the basis of documents in comparison to the treaty reinsurance. On this issue, we also note that assessee was not provided an opportunity to furnish the requisite evidence in the form of copy of contracts before the TPO. In view of these facts, we hold that the documents submitted along with this application under Rule 29 of the ITAT Rules, 1963 which are copies of illustrative contract/cover notes pertaining to the facultative reinsurance shall be necessary in comparative analysi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10. With regard to Ground No.4, at the outset of the hearing, ld. AR submitted that this issue is covered by the decision of ITAT, Delhi Bench 'C', New Delhi in ITA No.5771/Del/2011 dated 21.06.2013. 11. We have heard both the sides on the issue. After going through the order of the aforesaid decision of ITAT, Bench 'C', New Delhi, we find that this issue is covered by the decision of the ITAT and the relevant para of the order is reproduced below :- 6. We have heard the rival submissions and perused the material available on record and the judgements and orders which have been referred to for our consideration have also been taken into consideration. It may be relevant at this point of time to reproduce the relevant findings of the CIT(A) which is under challenge:- 7. I have gone through the above submissions of the appellant and have also perused the ITAT's order in appellant's own case for Assessment Year 2004-05 and have gone through the judgements cited above. In my view, this issue has been clearly dealt by the Hon'ble ITAT in their order dated 26.03.2009 in appellant's own case for Assessment year 2004-05. The ITAT has in no unc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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