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TMI Blog2017 (10) TMI 722X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal consistently is holding that the assessee has already suffered divided distribution tax u/s. 115O of the Act and, therefore, it is exempt u/s. 10(34) of the Act. Disallowance u/s. 14A r/w Rule 8D - Held that:- This issue is covered in assessee’s own case as held that Section 14A disallowance do not apply to insurance companies which are covered by special provisions of Section 44 and hence, dismiss revenue's appeal. - I.T.A. No. 5655/Mum/2015 - - - Dated:- 27-9-2017 - Shri Mahavir Singh And Shri N. K. Pradhan, AM Appellant by : Shri Anadi Varma Respondent by : Shri Madhur Agrawal Shri Chetan Kakka ORDER Per Mahavir Singh, JM This appeal by the Revenue is arising out of the order of CIT(A)-2, Mumbai, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s formed part and parcel of the assessee s business. The Tribunal in para 3 followed earlier orders and observed as under: 3. AO noted that the assessee was required to prepare two separate accounts as per IRDA Regulations, 2002 - Revenue Account of the Policy Holders (Technical Account) and Profit Loss Account of the Shareholders (non technical account). The Shareholders account showed a surplus of ₹ 21.79 crores whereas Policyholders account reflected surplus of ₹ 79.62 Crores. AO concluded that the surplus in Shareholders' account was on account of carrying on 'business activity, other than Life insurance' and therefore, the same did not form part of insurance business and hence brought forward deficit (loss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssue in this appeal of Revenue is against the order of CIT(A) allowing exemption u/s. 10(34) of the Act of dividend income. For this, the Revenue has raised following ground nos. 2(a), (b) and (c): 2. (a) Whether on the facts and in the circumstances of the case and in law the Ld. CIT(A) erred m directing to reduce dividend income (claim by the assessee exempt u/s.10(34) of the Act) from income computed in accordance with Schedule 1 r.w.s. 44 of the Act, despite the fact that income in schedule J is determined by actuary using mathematical formulae and principles and dividend income is not particularly included in these calculations? (b) Whether on the facts and in the circumstance of the case and in Law, the Ld. CIT(A) erred in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... end distribution tax u/s 115-O of the act and therefore, completely exempt u/s 10(34). Further, Section 44 did not override the provisions of Section 10(34) and hence the dividend should be considered as exempt income. The issue was allowed in favor of assessee by CIT(A) by relying upon assessee's own case for earlier years and various judicial pronouncements, which has been assailed before us by way of Ground Nos. 2, 3 4. The Ld. AR drew our attention to decision of Mumbai Tribunal in ITA Nos 290 l/Mum/2010 order dated 30/09/2011 ITA Nos. 2004 2i33/M/12, order date 09/04/2015 for AY 2007-08 2008-09 respectively. We hereby extract below Tribunal's conclusion in ITA No. 2901/M/2010:- Section 44 provides that computation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Law, the Ld. CIT(A) is correct in deleting the disallowance u/s. 14A of the Act made by the Assessing Officer in accordance with the Rule 3D? 10. At the outset, the ld. Counsel for the assessee stated that this issue is covered in assessee s own case in ITA No. 6223/Mum/2014 for A.Y. 2011-12 vide order dated 20.12.2013. The ld. Counsel for the assessee finally drew our attention to para 5, wherein the Tribunal following the earlier orders stated that no disallowance is to be made in insurance companies which are covered by special provisions of section 44 of the Act. The Tribunal in para 5 held as under: 5. As assessee earned exempt dividend income, it suffered Section 14A disallowance for an amount of ₹ 14.94 crores but ..... X X X X Extracts X X X X X X X X Extracts X X X X
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