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TMI Blog2024 (9) TMI 741X X X X Extracts X X X X X X X X Extracts X X X X ..... stments. This Court in the assessee's own case in several tax cases appeals relating to A.Ys 2006-2007 to 2009-2010 has noted the applicability of the earlier decision in the case of United Insurance Company [ 2019 (7) TMI 387 - MADRAS HIGH COURT ] deciding the issue in favour of the petitioner. With this, we find no necessity whatsoever to remand the matter as the facts in issue as well as the applicability of law to those facts is very clear as borne out from the statutory position, and the decisions in United India Insurance Company [ 2019 (7) TMI 387 - MADRAS HIGH COURT ] and Oriental Insurance Co. Ltd. [ 2017 (9) TMI 172 - DELHI HIGH COURT ] As regards the reference to the judgment in Apollo Tyres Ltd. [ 2002 (5) TMI 5 - SUPREME CO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come declaring loss for both assessment years and seeking refunds. The returns were processed and an intimation was made under Section 143(1) for A.Y.2003-04 on 20.11.2003, subsequently rectified under Section 154 of the Act on 13.11.2006. An order of assessment was made under Section 143(3) for A.Y.2004-05 on 13.11.2006, subsequently rectified under Section 154 of the Act on 03.01.2007. 4. In the assessment, the assessee's claim for exclusion of profits from sale of investments was denied. The fact that the assessee had computed its income in accordance with the provisions of Section 44 read with Rule 5 of the First Schedule to the Act is undisputed. Rule 5 of the First Schedule had, at the relevant point in time, not contained any sti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd there was no leeway available to exclude such profits. 9. As against the assessments, the assessee filed appeals before the first Appellate Authority, who, by common order dated 17.12.2007, allowed the appeals following the ratio of the judgment in K.P. Varghese vs The Income Tax Officer, Ernakulam, anr. [131 ITR 597] This judgment is on the point that due weightage is to be given to the purpose for which a provision had been included/excluded from an enactment. 10. With the deletion of Rule 5(b) from the First Schedule, the purpose was clear, to the effect that the profits/loss earned by an Insurance Company from sale of investments, was to be excluded from the computation of income. 11. Second appeals filed at the instance of the Reven ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tored with effect from 01.04.2011 (A.Y.2011-12). We are concerned with the applicability of the said clause for the interregnum period. 15. The purport behind clause (b) to Rule 5 was clear, to either include or exclude profits/losses from sale of investments, specific to insurance businesses. With the deletion of that clause for the periods 1988 to 2011, there is no justification whatsoever to continue to tax profits/losses from sale of investments. Such an interpretation would result in reading clause (b) as continuing on the stature book, even for a period when it had stood deleted. 16. This very issue had come up for consideration before this Court in Commissioner of Income Tax V. United India Insurance Company. [2019 111 Taxman.com 217 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e active role in capital markets for the benefit of policy holders, the Finance Act has amended sub-r.(b) of R. 5 of the First Schedule to provide for exemption of the profits earned by them on the sale of investment. As a corollary, it has also been provided that the losses Incurred by the General Insurance Corporation on the realisation of the investment shall not be allowed as a deduction in computing the profits chargeable to tax. 45.2 This amendment will take effect from the 1st April, 1989, and will accordingly, apply in relation to the asst. yr. 1989- 90 and subsequent years. 18. We are thus of the considered view that there is no justification in bringing to tax profits from sale of investments so long as they stand deleted for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Supra 3) and deciding the issue in favour of the petitioner. 22. With this, we find no necessity whatsoever to remand the matter as the facts in issue as well as the applicability of law to those facts is very clear as borne out from the statutory position, and the decisions in United India Insurance Company (Foot Note Supra 3) and Oriental Insurance Co. Ltd. (Foot Note Supra 4). 23. As regards the reference to the judgment in Apollo Tyres Ltd. (Foot Note Supra 1), we are of the considered view that that judgment would have no relevance to the present case as it was delivered in the context of the computation of income under Minimum Alternate Tax (MAT) for which the basis is the profit and loss account, as confirmed by the shareholders in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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