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TMI Blog2020 (1) TMI 619X X X X Extracts X X X X X X X X Extracts X X X X ..... he normal provisions of the computation of income in Income Tax Act. Royalty paid by the assessee in our view cannot be regarded to be an expense relating to the life insurance business. There is nothing wrong caused to the Revenue as Royalty cannot be regarded to be liability incurred for life insurance business. We therefore set aside order of CIT(A) on this issue and delete the enhancement made by CIT(A). - ITA Nos. 4384 & 4385/Del/2019, ITA Nos. 4634, 4633, 4635 & 4636/Del/2019 - - - Dated:- 14-1-2020 - Shri G.S. Pannu, Vice President And Shri K. Narasimha Chary, Judicial Member For the Assessee : Sh. Himanshu S. Sinha, advocate, Sh. BhuwanDhoopar, Advocate For the Respondent : Sh. Subha Kant Sahu, Sr. DR ORDER PER K. NARASIMHA CHARY, J.M. Aggrieved by the separate orders dated 28.02.2019 in appealsNos. 06/16-17 and 14/16-17 -New Delhi, passed by the learned Commissioner of Income Tax (Appeals)-22, New Delhi ( Ld. CIT(A) ),for the assessment years 2012-13 to 2013-14, M/s Max Life Insurance Company Ltd. ( the assessee ) and the Department have filed cross-appeals Nos. 4384 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6/2016 in respect of both the years requesting to rectify the assessment order passed under section 143(3) of the Act and requested to apply the rate of tax at 1.5% instead of 30%. Learned Assessing Officer, however, rejected the rectification application as filed by the assessee stating that the assessee had not offered to tax profit on sale of investments and accordingly the same is brought to tax by way of separate addition in accordance with the provisions of section 28 to 43B of the Act as profit on sale of investments representing income from nonlife insurance business and also that there is justification for taxing the other disallowances, namely, provision for bad debts and donation expenses at the rate of 30%. In appeal Ld. CIT(A) however accepted the contentions of the assessee and while following the orders of the Tribunal for the assessment year 2010-11 deleted the same. Revenue, therefore, preferred appeals in ITA 4633 and 4636 /Del/ 2019 for the assessment years 2012-13 and 2013-14 respectively. 5. Insofar as the appeal of the assessee are concerned, first challenge relates to the disallowance of the donation made by the assessee. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oduced and there is no contradiction from the other side on this aspect. 9. In assessee s own case for the assessment year 2010-11, reported in Max New York Life Insurance Co. Ltd. vs. DCIT (2018) 91taxmann.com 477 (Delhi-Trib.) a coordinate Bench of this Tribunal dealt with this issue in detail and observed that,- 97. Now coming to the additional ground taken by the assessee which relates to the claim of deduction by the assessee u/ 10 (34) in respect of dividend income, we noted that this issue is duly covered by decision of Mumbai Bench of this Tribunal in case of ICICI Prudential Insurance Co. Ltd. (supra) in which under para 47 while dealing with similar issue following decision of General Insurance Corp of India (supra) by Bombay HC gave clearcut finding that assessee is entitled to exemption u/s 10(34) for the dividend income. We also noted while disposing of ground relating to applicability of S. 14A for disallowance of expenditure in respect of income not forming part of Total Income. This Tribunal Mumbai Bench in the aforesaid case under para 45-46 took the view that since S. 44 creates a specific exception to the applicabili ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accordingly allow the additional ground and dismiss the plea of learned DR that directions be given in case exemption is granted u/s 10(34) to disallow be expenditure u/s 14A of the Income Tax Act. 10. The above view taken for the assessment year 2010-11 was followed subsequently in assessee s own case for assessment year 2006-07 by order dated 22/4/2019 in ITA No. 5643/del/2010 and the Tribunal directed the assessing officer to allow exemption to the assessee under section 10(34) of the Act without disallowing any expenditure under section 14A of the Act. On this issue also neither any change of circumstances nor any decision of any higher forum is brought to our notice by the Revenue. Hence while respectfully following the above consistent view taken by the Tribunal in assessee s own case for the earlier assessment years, we allow ground No. 2 of assessee s appeal and direct the Assessing Officer to allow exemption to the assessee under section 10(34) of the Act without disallowing any expenditure under section 14A of the Act. 11. Now coming to the Revenue s appeal, Revenue challenges the direction of the Ld. CIT(A) to the learn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 93. Ground no. 6 relates to enhancing the assessment by making additions for the provision for doubtful debts amounting to ₹ 2,41,83,000/- in shareholders' P L a/c. We heard rival submissions and carefully considered the same while disposing of ground no. 2 in the preceding paragraph. We have already held that income in the shareholders a/c also forms part of profit gains from life insurance business of the assessee. Income has to be computed as per Rule 2 of Schedule I r.w.s. 44 of the Income Tax Act. S. 44 debars Revenue to apply the provisions of Sections 28 to 43B of the Income Tax Act while computing profit gains from an insurance company and income has to be computed with the Rules contained in the First Schedule. In view of this specific provision, in our view the Revenue cannot apply the normal provisions of the Income Tax Act for computing the income under the Income Tax Act. From form A - P L a/c i.e. shareholders a/c pg 178 of the audited balance sheet and P L a/c, it is apparent that the assessee has made provision for doubtful debts amounting to ₹ 2,41,83,000/-. We noted that Revenue on the one side disallowed provision for d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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