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TMI Blog2010 (12) TMI 1200X X X X Extracts X X X X X X X X Extracts X X X X ..... n respect of this sum. The CIT(A) factually erred in alleging that it was agreed that this issue was covered against the appellant by the CIT(A) s order for the assessment years 2002-03, to 2004-05 2. The ld. AO has erred in confirming the disallowance of ₹ 3,73,76,789/- by the DCIT on account of investments written off 3. The ld.CIT(A) erred in confirming the disallowance of ₹ 34,00,22,121/- by the DCIT on account of loss on amortization 4, The ld. CIT(A) erred in confirming he addition/disallowance of ₹ 44,03,609/- on account of disallowance of expenditure u/s 14A the CIT (A) erred in holding that the amendment to section 14A by the finance Act, 2006 was clarificatory; 5. The ld. CIT(A) erred in not directing the deletion of the interest u/s 234D of the Act charged upon the appellant. The CIT(A) erred in holding that no submission was made by the appellant on this issue 3. The appellant in this appeal is a Government of India Corporation and for filing the appeal before this Tribunal the approval of the Committee on Disputes is to be taken before filing of the appeal. The COD granted the permission to the assessee for pursuing the grounds o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the grievance of the 9. In view of these discussions, as also following the coordinate bench decision in the case of Bajaj Allianz General Insurance Company assessee. The profits on sale of investment in the years before us, which are year prior to the years with effect from which prospective amendment is made, are not taxable in the hands of the assessee. The taxability of income of insurance companies under the head income from business and profession as governed by provisions of section 44 read with first schedule to the Income- tax Act, does not extend to taxability of profits on sale of investments - So far as the assessment years before us are concerned. 10. For the reasons set out above, we direct the Assessing Officer to exclude profits on sale of investments from income of the assessee liable to be taxed. The assessee gets the 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. 5. Accordingly, by following the earlier order of this Tribunal, we decide this issue in favour of the assessee and against the revenue. The addition made on account of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e past. Now it has been informed that this controversy in respect of insurance company set at rest by a decision of Tribunal, Delhi Bench verdict in the case of Oriental Insurance Co. Ltd. (ITA Nos. 5462 5463/Del/2003) asst. yrs. 2000-01 and 2001-02 order dt. 27th Feb., 2009 [reported as Oriental Insurance Co. Ltd. v. Asstt. CIT [2010] 130 TTJ (Delhi) 388 : [2010] 38 DTR (Delhi) 225-Ed.]. Therefore considering the vehement reliance of learned Authorised Representative it is worth to mention at the outset itself that the issue now stood resolved by this latest decision of Delhi, Tribunal in the case of Oriental Insurance Co. Ltd. (supra), the relevant portion reproduced below : 17. We have heard rival submissions of the parties and have gone through the material available on record. Identical issue arose in assessee's own case for asst. yr. 1985-86. The Tribunal accepted the plea of the assessee and in fact the issue went up to the Hon'ble Delhi High Court in asst. yrs. 1986- 87 to 1988-89, which is reported as CIT v. Oriental Insurance Co. Ltd. [2003] 179 CTR (Delhi) 85 : [2002] 125 Taxman 1094 (Delhi), decided the issue in favour of the assessee by holding that s. 44 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The income of the business of insurance is essentially to be at the amount of the balance of profits disclosed by the annual accounts as furnished in the Controller of Insurance. The actual computation of profits and gains of insurance business will have to be computed in accordance with r. 5 of the First Schedule. In the light of these special provisions coupled with non obstante clause the AO is not permitted to travel beyond these provisions. 24. Sec. 14A contemplates an exception for deductions as allowable under the Act are those contained under ss. 28 to 43B of the Act. Sec. 44 creates special application of these provisions in the cases of insurance companies. We therefore, agree with the assessee and delete the act as according to us, it is not permissible to the AO to travel beyond s. 44 and First Schedule of the IT Act. 18. It may not be out of place to mention that the respected Co-ordinate Bench has duly taken the note of an earlier decision of that very Bench decided in the case of that very assessee vide order dt. 29th Sept., 2004 bearing ITA Nos. 7815/Del/1989, 3607 to 3609/Del/1990; 5035/Del/ 1998 and 3910/Del/2000 named as Dy. CIT v. Oriental General Insur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of profits is subject only to adjustments thereunder. The adjustments do not refer to disallowance under s. 14A of the Act. (b) Profits and gains of business as referred to in (a) above have only to be computed in accordance with r. 5 of the First Schedule. 22. Sec. 44 creates a specific exception to the applicability of ss. 28 to 43B. Therefore, the purpose, object and purview of s. 14A has no applicability to the profits and gains of an insurance business. 21. The learned Departmental Representative strongly justified the action of the AO and that of the CIT(A) in the light of the clear provisions of s. 14A of the Act. Since the view has already been expressed by respected Co-ordinate Bench therefore, we have no reason to take any other view except to follow the same. With the result we hereby accept the argument of learned Authorised Representative to the extent that in the present situation the provisions of s. 14A need not to apply while granting exemption to an income earned on sale of investment primarily because of the reason of the withdrawal or deletion of sub-r. 5(b) to First Schedule of s. 44 of IT Act. Once we have taken this view therefore the enhancement ..... X X X X Extracts X X X X X X X X Extracts X X X X
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