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TMI Blog2019 (6) TMI 36X X X X Extracts X X X X X X X X Extracts X X X X ..... ecessary for adjudication of the controversy at hand are : Assessee is into the business of insurance other than life insurance. Assessing Officer noticed from the Note to Accounts Para 16.3 that assessee has received interest income of Rs. 67,49,59,000/- with regard to loans, debentures and bonds which have not been offered for taxation. Declining the contentions raised by the assessee, AO made addition of Rs. 67,49,59,000/- on account of accrued interest on bonds, debentures and investment. AO, after invoking the provisions contained under section 14A of the Income-tax Act, 1961 (for short 'the Act') read with Rule 8D of Income-tax Rules, 1962 (for short 'the Rules') also made addition of Rs. 36,21,92,118/- on account of disallowance. 3. Assessee carried the matter by way of an appeal before the ld. CIT (A) who has deleted the additions by partly allowing the appeal. Feeling aggrieved, the Revenue has come up before the Tribunal by way of filing the present appeal. 4. We have heard the ld. Authorized Representatives of the parties to the appeal, gone through the documents relied upon and orders passed by the revenue authorities below in the light of the facts and circumstances ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce business in accordance with the said rules. Reliance was placed on the scope of section 44, as held in the case of General Insurance Corpn. of India Vs. CIT (1999) 240 ITR 139 (SC), wherein Their Lordships of the Apex Court have categorically held that the provision of section 44 being a special provision, govern computation of taxable income earned from business of insurance. It mandates the tax authorities to compute the taxable income in respect of insurance business in accordance with the provisions of the First Schedule to the Act. In the light of these, their Lordships of Delhi High Court have held that no question of law, much less a substantial question of law survives for their consideration. In other words, order of the Tribunal has been affirmed. Following the same reasoning, addition made by the AO is deleted." 10. Since the facts of the case before us are identical to the facts of the case for assessment years 2000-01 and 2001-01, we respectfully following the decision of the ITAT in assessee's own case for assessment years 2000-1 and 2001-02, this issue is decided in favour of the assessee." 8. Hon'ble Delhi High Court has also decided the issue in question ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per its accounting policy and as per policy issued by the Insurance Regulatory Development Authority (IRDA)." 6. So following the order passed by the Tribunal for AY 2011-12 and order passed by the Hon'ble Delhi High Court in assessee's own case for AYs 1986-87 and 1988-89, we are of the considered view that the ld. CIT (A) has rightly deleted the addition by not recognizing an amount of Rs. 67,49,59,000/- as income for the years under assessment as per policies framed by the Insurance Regulatory and Department Authority (IRDA). Consequently, Ground No.1 is determined against the revenue. GROUND NO.2 7. Ld. DR for the Revenue by relying upon the assessment order contended that ld. CIT (A) has erred in deleting the addition made under section 14A read with Rule 8D. However, on the other hand, ld. AR for the assessee contended that the issue in controversy has already been decided in favour of the assessee in assessee's own case for AY 2011-12 vide which order passed by the ld. CIT (A) was confirmed. It is further contended by the ld. AR for the assessee that the taxability of the assessee is governed by section 44 of the Act read with provisions contained in Part-B of the First ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rnished to the Controller of Insurance under the Insurance Act, 1938. The said balance 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. 20. 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. 44A of the Act. 22. We have considered the rival contentions and gone through the records. The provisions of s. 44 read as under : "44. Insurance business.-Notwithstanding anything to the contrary contained in the provisions of this Act relating to the computation of income chargeable under the head 'Interest on securities', 'Income from house property', 'Capital gains' or 'Income from other sources', or in s. 199 or in ss. 28 to 43B, the profits and gains of any business of insurance, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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