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TMI Blog2019 (2) TMI 923X X X X Extracts X X X X X X X X Extracts X X X X ..... uting book profit under Section 115JB - Held that:- We find that the contribution of 0.1% of gross premium from motor vehicle insurance is done as per the directions given by the Government of India and this amount has been paid by the assessee as per the decision taken by the General Insurance Council in the meeting held on 04.02.2005. Therefore, we find that the Tribunal was fully right in rejecting the case of the revenue stating that the estimation was done in a routine manner and it is an unascertained liability. See THE COMMISSIONER OF INCOME TAX VERSUS BAJAJ ALLIANZ GENERAL INSURANCE CO. LTD. [2016 (11) TMI 1256 - BOMBAY HIGH COURT]. Commission for receipt of reinsurance - Held that:- CIT(A) took note of the decision taken in the assessee's own case for the assessment year 2009-2010 in which the assessment for the year 2008-2009 was followed and the assessee succeeded before the CIT(A) for the assessment year 2008-2009, wherein the CIT(A) noted that as a matter of industrial practice it was termed as commission on reinsurance premium received , however, in substance it is discount on re-insurance premium received by an Insurance Company from an other Insurance Compan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pondent/assessee. 3.We propose to dispose of these appeals by a common judgment because most of the substantial questions of law arise for all the assessment years. For the sake of convenience, Ms.V.Pushpa, learned Standing Counsel for the appellant/revenue has provided us a tabulated statement, wherein the issues have been specified in brief and the assessment years, case number allotted by the Tribunal and the tax case appeal numbers have also been listed. The tabulated statement consists of tick marks against each of the issues to indicate as to in which of the assessment year, the issues arise. For easy reference, we quote the tabulated statement hereinbelow: S.No. Issues AY 2005-06 AY 2006-07 AY 2007-08 AY 2008-09 AY 2009-10 AY 2010-11 1 TCA No. 51/19 41/19 52/19 44/19 49/19 46/19 54/19 58/19 59/19 62/19 43/19 63/19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the commission paid for receipt of re-insurance premium? 5.Whether the Tribunal was right in holding that the assessee is not liable to deduct the tax at source towards survey fees paid? 5.For easy reference and convenience, we indicate the substantial questions of law in a brief manner as indicated in the above tabulated statement. 1.Depreciation on UPS: 6.This issue has been decided by us against the revenue in T.C(A).No.23 of 2019 dated 18.01.2019. Following the same, the appeals filed by the revenue on this ground are dismissed and the above substantial question of law is answered in favour of the assessee. 2.MAT/115JB On Insurance Companies: 7.We have perused the order passed by the Commissioner of Income Tax (Appeals) (CIT(A)) as well as the Tribunal. As rightly pointed out by the Tribunal, the Insurance Companies prepare profit and loss account as per the guidelines issued by the Insurance Regulatory and Development Authority of India and not as per Part II and III of Schedule VI of Companies Act. Furthermore, the applicability of Schedule VI of the Companies Act was specifically excluded in respect of Insurance Companies. The revenue has not been able to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ims of hit and run accident. The Apex Court in Bharat Earth Movers Ltd. vs. CIT [2000] 245 ITR 428/112 Taxman 61 has observed as under:- The law is settled: if a business liability has definitely arises in the accounting year, the deduction should be allowed although the liability may have to be quantified and discharged at a further date. What should be certain is the incurring of the liability. It should also be capable of being estimated with reasonable certainty though the actual quantification may not be possible. If these requirements are satisfied, the liability is not a contingent one. In this case, the liability of making a contribution to the Solatium fund at 1% of premium received, is a certain liability in view of IRDA letter dated 13th May, 2004. Therefore, it is not a contingent liability during the subject Assessment Year. In fact, this Court in Shrikant Textiles v. CIT [1971] 81 ITR 222 (Bom.) has held that whether a liability is ascertained or contingent for a subject Assessment Year, cannot be decided/determined on the basis of the amounts paid in the subsequent/next Assessment Year. 8.Therefore, in the above view, the question as framed does not give r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ia as per DTAA. Further, it was contended that reimbursements do not partake the character of income which is chargeable to tax and therefore do not warrant withholding of tax on the same. The assessee relied on the following decisions in support of this proposition: 1.CIT v. Siemens Aktiongesellschaft 220 CTR 425 (Bombay) 2.CIT v. Industrial Engineering 202 ITR 1014 (Delhi) 15.The CIT(A) on going through the contentions raised by the assessee pointed out that disallowance under Section 40(a)(i) can be made only if taxes are not withheld on income chargeable to tax in India. On facts, it held that the payment was made to Royal and Sun Alliance, U.K. to settle the amounts of various surveyors on cost to cost basis and the surveyor does not make available any technical knowledge which can independently be applied by the assessee and consequently, held that the payment by the assessee would not be taxable as fees for technical services in the hands of the recipient. Furthermore, it is noted that in the absence of permanent establishment, the income in the hands of the recipient is also not taxable in India. The above view taken by the CIT(A) was rightly affirmed by the Tribun ..... X X X X Extracts X X X X X X X X Extracts X X X X
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