9911796707
TMI Blog2025 (1) TMI 640X X X X Extracts X X X X X X X X Extracts X X X X ..... 14, 38 & 39/2016-17 dated 14.12.2017. Dy. Commissioner of Income Tax, Large Tax Payer Unit, Chennai. 2 ITA-87/2018 2009-10 ITA Nos. 13, 14, 38 & 39/2016-17 dated 14.12.2017. 3 ITA-88/2018 2010-11 ITA Nos. 13, 14, 38 & 39/2016-17 dated 14.12.2017. 4 ITA-89/2018 2011-12 ITA Nos. 13, 14, 38 & 39/2016-17 dated 14.12.2017. 5 ITA-90/2018 2011-12 ITA Nos. 24/14-15, 12/16-17, 73/16-17 & 72/16-17 dated 14.12.2017. 6 ITA-91/2018 2012-13 ITA Nos. 24/14-15, 12/16-17, 73/16-17 & 72/16-17 dated 14.12.2017. 7 ITA-92/2018 2013-14 ITA Nos. 24/14-15, 12/16-17, 73/16-17 & 72/16-17 dated 14.12.2017. 8 ITA-93/2018 2014-15 ITA Nos. 24/14-15, 12/16-17, 73/16-17 & 72/16-17 dated 14.12.2017. 9 ITA-491/2018 2008-09 ITA Nos.13,14,38 & 39/2016-17 dated 14.12.2017 10 ITA-492/2018 2010-11 ITA Nos. 13, 14, 38 & 39/2016-17 dated 14.12.2017. 11 ITA-493/2018 2011-12 ITA Nos. 24/14-15, 12/16-17, 73/16-17 & 72/16-17 dated 14.12.2017. 12 ITA-494/2018 2012-13 ITA Nos. 24/14-15, 12/16-17, 73/16-17 & 72/16-17 dated 14.12.2017. 13 ITA-495/2018 2013-14 ITA Nos. 24/14-15, 12/16-17, 73/16-17 & 72/16-17 dated 14.12.2017. 14 ITA-496/2018 2014-15 ITA Nos. 24/14-15, 12/16-17, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... because it would be hard to conclude that assessing officer had expressed opinion on an issue that he was not fully aware of in the first place. He concluded that availability of "reasons to believe" is important rather than an established facts of escapement in any case for initiation of action u/s 148. 2.3 We have heard the rival submissions in the light of material available on records. The Ld. Counsel for the assessee invited our attention to the following reasons recorded by the revenue. Reasons recorded for AY-2008-09 "....As requested by you vide above referred letter, the reasons recorded for initiation of proceedings u/s 147 of the Income-tax Act, in your case for Assessment Year 2008-09 are reproduced below: The information existing as per records reflect the fact M/s. Paramount Health Services TPA Pvt. Ltd. (PAN: AACCP4465H) is a TPA (Third Party Administrator) for M/s. Royal Sundaram Alliance Insurance Company Limited. The assessee being insurance company through the TPA reimbursed the following amounts to various hospitals and insured persons. Financial Year 2007-08 (AY-2009-10) Payments to Hospitals (Cashless) Payments to insured persons (Reimbursement cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he vehicle dealers collected premium from the customers and issued policies to them by accessing the portal of the Insurance Brokers. For insuring the vehicles, dealers are given Payout calculated at a given percentage on Own Damage premium by your Insurance Company. On the basis of the invoices issued by the dealers, the Assessee -M/s Royal Sundaram Alliance Insurance Co.Ltd., (RSAICL) had taken CENVAT Input Service Credit. The Dealers had admitted that though they had not provided any service as mentioned in the invoices, they simply issued the same as per the directions of insurance companies. It is further noticed that the rates are not fixed according to the services mentioned in the invoices but calculated on the basis of the percentage on Own damage premium and dealers are paid accordingly. The ineligible CENVAT credit on this count worked out for this Assessment Year 2009-10 is as under: (1) CENVAT Value for the FY:2008-09 - Rs. 2,52,85,336 (2) Service Tax rate applicable for FY:2008-09 - 10.30% (3) Corresponding Expenditure (a/(b) - Rs. 24,54.,88,699 In as much as the CENVAT credit has been wrongly claimed, the corresponding expenditure amounting to Rs. 24,54,88, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sactions, was provided to the Ld. AO and that therefore there cannot be any case for reopening u/s 148. 2.6 At this stage we deem it necessary to examine the statutory provisions of Income escaping assessment postulated u/s 147 of the act reproduced herein below. ".....147. Income escaping assessment.-If the 2[Assessing Officer]3[has reason to believe] that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of sections 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under this section, or recompute the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned (hereafter in this section and in sections 148 to 153 referred to as the relevant assessment year): Provided that where an assessment under sub-section (3) of section 143 or this section has been made for the relevant assessment year, no action shall be taken under this section after the expiry of four years from the end of the relevant assessment year, unless any incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d was made to the facts of the case surrounding determination of taxable income of the assessee. In view of the elaborate enquiries and discussions made in the assessment order in respect of impugned transactions the AO is precluded from changing his opinion subsequently and reopening the case u/s 148. 2.9 The reasons recorded by the Ld. AO and as approved by his supervisory authorities, reproduced herein above do not in any way demonstrate that there was any failure on part of the assessee to have not fully and truly disclosed true facts of the case. The action of the AO in initiating proceedings u/s 148 is thus hit by the concept of "change of opinion" or a case of "review of the assessment order" and the same cannot be approved. We have also noted that there is no fresh and tangible material which has been brought on record by the Ld. AO to justify his action. We have also noted that, from the reasons recorded in the case extracted herein above, there is not even a whisper that the assessee is in any way guilty of suppressing any disclosure of any material. It is a certain position of law that reasons recorded in a case must be viewed on a stand alone basis and that nothing can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eal and ITA Nos.493 to 496 for AYs-2011-12 to AY-2014-15, of revenues appeal. 6.0 The first issue raised by the assessee and revenue vide its ground of appeals in above indicated ITA Nos. is regarding the disallowance of insurance premium paid to Non-Resident Insurers. Brief facts of the case are that the assessee has been paying reinsurance premium to Non-resident entities. It is the case of the revenue that the amounts remitted by the assessee to Non-resident entities is exigible to TDS deduction u/s 40(a)(i) of the act. The issue has been considered at length by the Hon'ble Coordinate Benches of this tribunal and decided in favour of the assessee's and against the revenue. We have noted that identical facts exists in the present case as well. On the available judicial landscape, the Ld. Counsel for the assessee has invited our attention to the decision of Hon'ble Coordinate Bench of this tribunal in the case of Cholamandalam General Insuracne ITA No.711/Chny/2020 dated 26.08.2022, United India Insurance Company Limited ITA No.1085/Chny/2017 dated 19.07.2024. Additionally reliance has also been placed upon decisions of Hon'ble Coordinate Benches of ITAT, Mumbai, Delhi Pune etc h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowed u/s. 40(a)(i) of the Act, for non-deduction of TDS u/s. 195 of the Act. The relevant portion of the findings of the Tribunal in para 6 & 7 of the order in ITA No.1692/Chny/2011 dated 28.06.2023 are extracted herein below:- "6. We have heard both the parties, perused the materials available on record and gone through orders of the authorities below. We find that an identical issue has been considered by the Tribunal in the assessee's own case in ITA Nos.1673, 1688, 1689, 1691/Chny/2011 for AYs 2003-04, 2004-05, 2005-06, 2006-07, order dated 26.08.2022, and after considering relevant facts held that reinsurance premium ceded to NRRs, is not taxable in India under the Income Tax Act, 1961 or under DTAA between India and respective countries, where the NRRs are tax residents, and thus, reinsurance premium cannot be disallowed u/s. 40(a)(i) of the Act, for non-deduction of TDS u/s. 195 of the Act. The relevant findings of the Tribunal are as under: 10. We have heard both the parties, perused material available on record and gone through orders of the authorities below. The assessee is an insurance company engaged in the business in General insurance in terms of IRDAI regulatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsurance Act, 1938 and IRDAI Regulations on reinsurance and concluded that the assessee has violated provisions of Insurance Act, 1938 and consequently, reinsurance premium ceded to NRRI is not deductible u/s. 37 (1) Of the Income Tax Act, 1961. The matter travelled to the Hon'ble High Court of Madras and the Hon'ble High Court has remanded the issue back to the Tribunal and directed the Tribunal to decide the issue on three points:- i) Whether the Assessing Officer was right in disallowing reinsurance premium u/s. 40(a)(i) of the Act; ii) Whether the CIT(A) was right in rejecting partially the appeal filed by the assessee; & iii) Whether the CIT(A) was justified in restricting claim of the assessee to 15% instead of confirming order passed by the Assessing Officer. The Hon'ble High Court of Madras also observed that the Tribunal shall decide above questions alone and nothing more and decision shall be taken based on the available material and the assessee& the Revenue are not entitled to place any fresh materials before the Tribunal so as to enable the Tribunal to take decision. Therefore, from the above, it is very clear that controversy with regard non-compliance wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have noted the facts of the present case are identical to the decision taken herein above and the same has not been distinguished in any way. Accordingly, in respectful compliance to the decision of Hon'ble Coordinate Bench in the case of United India Insurance Limited supra, the order of lower authorities is set aside and the Ld.AO is directed to delete the additions made towards disallowance of reinsurance premium conceded to NRRs u/s. 40(a)(i) of the Act for the assessment years 2011-12, 2012-13, 2013-14 and 2014-15. Thus, the grounds of appeal raised by the assessee on this issue for the assessment years 2011-12, 2012-13, 2013-14 and 2014-15 are allowed and that of the Revenue for the assessment years 2011-12, 2012-13, 2013-14 and 2014-15 are dismissed. 7.0 The next issue raised by the assessee vide ground of appeal bearing ITA No. 89 and 91 for AY 2011-12 and 2012-13 are regarding the disallowance of excess depreciation claimed on projectors and UPS. Perusal of the assessment order for AY-2011-12 and 2012-13 shows that the Ld.AO has made the addition of Rs. 1,00,999/- and Rs. 37,365/- on account of projector and Rs. 4,37,870/- and Rs. 617915/- on account of UPS respectively. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e co-ordinate Bench, we are inclined to uphold findings of the learned CIT(A) and direct the Assessing Officer to allow depreciation on UPS @ 60% as claimed by the assessee....". 7.3 It has been noted that the facts of the present case identical to the one existing in the case of Cholamandalam General Insurance Company Limited. Accordingly, in respectful compliance to the decision of Hon'ble Coordinate Bench supra we set aside the order of the lower authorities and direct the Ld. AO to allow depreciation @ 60% on UPS. As regards claim of depreciation on projectors, we do not find any infirmity with the findings of the Ld.CIT(A) that a projector is neither nor an output device or a computer and can be used independently also as an electronic gadget. Consequently, the decision of the Ld. CIT(A) on the issue of the projector is confirmed. Accordingly, the ground of appeal raised by the assessee ITA No. 89 and 91 for AY 2011-12 and 2012-13 are partly allowed. 8.0 The next ground of appeal raised by the assessee for AYs 2010-11, 2011-12, 2011-12, 2012-13, 2013-14, 2014-15 is regarding the disallowance of payment made to motor vehicle dealers. Brief factual matrix of the controversy at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... doubt about the genuineness of service rendered by the car dealers. Therefore, this Tribunal do not find any reason to interfere with the order of the lower authority and accordingly the same is confirmed...." 8.2 We have also noted that identical controversy had come up for consideration of Hon'ble Coordinate Bench of this tribunal in ITA NO.1085/Chny/2017 dated 19.07.2024 in the case of United India Insurance Company Limited. ".....22. The next issue that came up for our consideration from the Revenue appeals for the assessment years 2014-15 to 2019-20 is in regard to disallowance of amount paid to motor car dealers towards infra payment u/s. 37 of the Act amounting to Rs. 63.94 crores for assessment year 2014-15. 22.1 The learned counsel for the assessee, at the outset submitted that this issue of payment made to motor car dealers by the assessee towards infra payment u/s. 37(1) of the Act is also covered in favour of the assessee by the earlier decision of this Tribunal dated 28.08.2018 in assessee's own case for the assessment year 2013-14, which was affirmed by the Hon'ble High Court of Madras in TCA No.339 to 342 of 2019 vide order dated 21.06.2019 and a copy of which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO holding that unexpired premium reserve falls under clause(c) of explanation-1 to section 115JB and confirmed the addition. 9.1 We have heard the rival submissions in the light of material available on records. It is the case of the assessee that the impugned addition is unwarranted. It has been argued that UPR created in the books of accounts is based on the guidelines issued by IRDA and not on any adhoc basis. It was further argued that UPR is neither a reserve nor a provision for any unascertained liability and therefore cannot be exigible for any adjustments u/s 115JB. The Ld. Counsel for the assessee would like to place reliance upon the decision of Hon'ble Coordinate Bench of this tribunal in the ITA No.711/Chny/2020 Supra holding that UPR cannot be subject matter for inclusion in 115JB. Reliance was also placed upon the decision of Hon'ble Kolkatta Bench in the case of National Insurance Company Limited. The Ld. Counsel for the revenue would like to place reliance upon the decision of lower authorities. 9.2 We have noted the following decision of Hon'ble Coordinate Bench of this tribunal in the case of Cholamandalam Insurance Company Limited Supra, relevant part of which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cord. We find that the assessee is a German re-insurance company Munchener Ruckversichrungs Gesellschaft Aktiengesellschaft in Munchen (Munich Re) which provides re-insurance solutions worldwide and operates in three segments namely, non-life reinsurance, life insurance and health solutions. The assessee is registered with Insurance Regulatory and Development Authority of India ('IRDAI') from 01/02/2017 and carries on various activities through its Indian Branch including receipts of premium on re-insurance treaties and purchase/sale of investment as per IRDAI guidelines. The assessee is regulated by the IRDAI and it maintains books of account as per the IRDAI guidelines. The assessee maintains its regular books of accounts by preparing a policyholders account (called revenue account) and shareholders account (profit and loss account) separately and a balance sheet as a whole which is mandated by IRDAI. The assessee is also audited under the regulation of IRDAI. The creation of reserves, accounting of liabilities, etc. is determined by the actuary in accordance with the Insurance Regulatory and Development Authority of India Act, 1999 ('IRDA Act') and its regulation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... observed that the word 'any reserve' in clause (b) of Explanation 1 to section 115JB(2) of the Act refers to all kinds of reserves and encompasses all types and categories and only excludes the reserve specified under section 33AC of the Act. c) The ld. AO observed that the assessee has deferred its income by creating 'the Reserve for Unexpired Risk' but has not deferred the expenditure incurred for earning the same during the year and is accumulating the premium over time by a reserve for unexpired risk without any taxation. The ld. AO observed that the accounting treatment of the assessee does not fulfil the matching concept of accounting. d) Further, the ld. AO while making the adjustment, considered the reserve for unexpired risks as an unascertained liability which is required to be added and included for the purpose of book profits u/s 115JB of the Act. The reliance placed by the assessee on Bharat Earth Movers v. CIT (2000) 245 ITR 428 (SC) was disregarded on the basis that it is in respect of actuarial valuation of leave encashment and not applicable to facts of the assessee. 6. We find that the ld. AR submitted that the "Reserve for Unexpired Risk" r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ately disclosed in the financial statements. Hence logically that part of income which is attributable to the succeeding accounting period is reduced from the total premiums received during an accounting period by way of creation of a reserve for unexpired risk which is in accordance with the Insurance Act, 1938. In this regard, the ld. AR also submitted that every year adjustments are made to the existing reserve for unexpired risk by way of crediting or debiting the amount of difference between the reserve created in the immediately preceding year and the reserve required to be credited during the current accounting year. Accordingly, we hold that it cannot be considered as any "amount carried to any reserve" debited to the Profit & Loss Account, but it represents that part of premium income which does not relate to the current accounting period. Hence, in our considered opinion, the creation of a reserve for unexpired risk cannot be considered to be similar to those "reserves" which have been referred to in clause (b) of Explanation (1) to section 115JB(2) of the Act. The amount of provision for unexpired risk has been reduced from the net premium received and there is no debit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his decision would be squarely applicable for the reserve for unexpired risk and premium deficiency made by the assessee in the instant case as they are not only estimated but are also derived based on statistical method and the same has been duly certified by the actuary and the auditors of the assessee. Hence we hold that the same should be excluded for the purpose of computing book profit. 10. Our aforesaid view is also fortified by the decision of Co- ordinate Bench of Kolkata Tribunal in the case of DC1T v. National Insurance Co.Ltd reported in 72 taxmann.com 116, wherein it was held that a reserve created for unexpired risk in case of general insurance business cannot be added back for the purpose of computation of book profits u/s 115JB of the Act as it does not fall in the category of reserves specified in clause (b) of Explanation 1 to section 115JB(2) of the Act. The relevant facts and the adjudication thereon by the Kolkata Tribunal are reproduced hereunder for the sake of convenience:- 11. Addition towards Reserve created for Unexpired risk u/s 115JB of the Act The brief facts of this issue is that while computing the Book Profit u/s. 115JB of the Act for the purpos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any (carrying on General Insurance Business), the creation of "Reserve for Unexpired Risk" cannot be considered to be similar to those "Reserves" which have been referred to in Clause (b) of Explanation (1) to Section 115JB(2). It may also be appreciated that the "Reserve for Unexpired Risk" can, in any case, not be considered as any provision made for meeting liabilities, other than ascertained liabilities as referred to in Clause(c) of Explanation (1) to Section 115JB(2). On the basis of the above facts it may kindly be appreciated that there has not been any requirement to add back any sum in relation to the "Reserve for Unexpired Risk" while computing "Book Profit" u/s. 115JB(2) for the Assessment Year 2008-09. Accordingly, the assessee submitted that the "Reserve for Unexpired Risks" not being of the nature as specified in clause (b) of Explanation 1 to section 115JB(2), the action of the ld AO in making an addition of such Reserve should be held as unjustified. Hence, the assessee submitted that the ld AO may kindly be directed to delete the addition of Rs. 169,45,00,000/-made by him in computing the Book profit u/s 115JB of the Act. 11.1 The ld CITA observed that the provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... serve created for unexpired risk should be considered as reserve for computing the Book Profit under section 115JB of the Income-tax Act." 11.3 The ld DR vehemently relied on the order of the ld AO. In response to this, the ld AR vehemently relied on the order of the ld CITA. 11.4 We have heard the rival submissions. We find that the ld CITA had dealt this issue very elaborately and had given proper finding that the reserve created for unexpired risk need not be added back for the purpose of computation of book profits u/s 115JB of the Act. The revenue was not able to controvert the findings of the ld CITA before us. Hence we find no infirmity in the order passed by the ld CITA in this regard. Accordingly, the Ground No. 4 raised by the revenue for Asst Year 2008-09 is dismissed. 10.1. We further find that this decision of Kolkata Tribunal has been subsequently affirmed by the Hon'ble Calcutta High Court in ITA No. 76 of 2019. 11. Before we conclude the issue, we would also like to address the issue in dispute that Rule 5 of the First Schedule of the Act specifies the computation mechanism of profits/gains arising from general insurance business and specifically allows ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e additions made towards UPR to book profit u/s. 115JB of the Income Tax Act, 1961, for both the assessment years...." 9.3 We have also noted that the facts of the present case are identical to those in the case of M/s. Cholamandalam Insurance Supra. Accordingly, in respectful compliance to the ratio laid down by Hon'ble Coordinate Bench above, the order of the lower authorities is set aside and the Ld. AO is directed to delete the additions made towards UPR to book profits u/s 115JB of the act. The ground of appeal raised by the assessee on the issue of non-inclusion of UPR to book profits u/s 115JB of the act is therefore allowed. 10.0 The next issue raised by the assessee for ITA Nos.88 & 90 for AY-2010-11 & 2011-12 pertains to addition of insurance premium received in respect of long term policy. Facts of the case for AY-2010-11 & 2011-12 are common except of variations in figures. The Ld. AO has while making an addition of Rs. 15,64,68,000/-, discussed the issue in para 10(2)(i) of his order for AY-2010-11. The Ld. First Appellate Authority endorsed the decision of the Ld. AO. As per brief factual matrix of the case the assessee company had changed its policies of accounting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal of the revenue save those adjudicated herein above. The first issue raised by the revenue is regarding depreciation on computer software raised vide ITA Nos. 491 492, 494, 495 & 496 /Chny/2018 for AYs: 2008-09, 2010-11, 2012-13, 2013-14, 2014-15. As regards ITA No. 491 for AY-2008-09 is concerned the Assessment order per se which is based upon proceedings u/s 147/148 has been found to be barred by limitation on account of suffering from incurable deficiencies. The appeal of the revenue for impugned year vide ITA No. 491 for AY-2008-09 is therefore dismissed in limine. 11.1 The issue seminal to all the remaining ITA Nos. 492, 494, 495 & 496/Chny/2018 for AYs: 2010-11, 2012-13, 2013-14, 2014-15 contested by the appellate revenue is regarding allowance of depreciation on computer software. It is the case of the revenue that the assessee is eligible for claim of depreciation @ 25% on computer software since the license to use software is an intangible asset and that therefore the action of Ld. CIT(A) is erroneous in allowing depreciation @ 60%. For the purposes of this appeal the figures for the AY-2010-11 are taken. The Ld. AO had noted the fixed asset schedule of the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... % instead of 25% allowable on intangible assets as the software license being intangible amount as per part B of depreciation schedule and the ld. Authorised Representative submitted break up Written Down Value (WDV) of computer and software license. The ld. Assessing Officer considering the claim of the assessee on depreciation rate and applicability of inclusive definition of intangible assets has disallowed the excess claim of depreciation and Assessed total income of 16,80,88,230/- vide order u/s. 143(3) of the Act dated 18.03.2015. Aggrieved by the order, the assessee filed an appeal before us. 4. In the appellate proceedings, the ld. Authorised Representative argued on the grounds and explained the facts an reasons on claim of depreciation on software license. The assessee company purchased software license and added to the opening written down value (WDV) of Block of computers and computer software and license '' as on 01.04.2011 and the same being part of the Block cannot be segregated and entitled for depreciation at 60% and not the rate applicable to the intangible assets. The ld. Commissioner of Income Tax (Appeals) considered the grounds, arguments, facts of the case, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... als) has erred in allowing depreciation @60% relying on the judicial decisions not relevant to the facts of the assessee and prayed for allowing the appeal. 6. Contra, the ld. Authorised Representative relied on the orders of Commissioner of Income Tax (Appeals) and the assessee's own case for the assessment year 2010-2011 allowed in favour of the assessee on similar issue and submitted judicial decisions and prayed for dismissing the appeal. 7. We heard the rival submissions, perused the material on record and judicial decisions cited. The crux of the issue dealt as per the arguments of the ld. Departmental Representative that the depreciation on software license should be restricted to 25% rate and treated as Intangible Asset and shall not be included in Block of computers. The ld. Authorised Representative contravened the arguments and substantiate that in assessee's own case the Coordinate of this Tribunal has allowed the depreciation on software licence @60% and supported his submissions with the decision of Hyderabad Tribunal in the case of Srinivasa Resorts vs. ACIT (2014) 41 taxmann.com 350 (Hyd. Trib) were it was observed that the computer software alongwith computer h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 2011-12, 2012-13 & 2013-14 is regarding the disallowance of amortization of premium on investments. For the purposes of this appeal, we consider the assessment order for AY-2010-11 as facts of all the remaining years are identical. The Ld. AO has discussed the issue on page 12 to page 16 of his order. It is the case of the Ld. AO that the method of differing the premium income in miscellaneous insurance business is not in accordance with the provisions of the act and consequently he proceeded to add back the same. The Ld. First Appellate Authority has deliberated upon this issue in para 4.6.1 on page 7 of his order. Placing reliance upon the decision of on Hon'ble ITAT Kolkata in the case of National Insurance Company Limited 72 Taxmann.com 116 he deleted the addition of the Ld. AO. 12.1 We have heard the rival submissions in the light of material available on records. The Ld. Counsel for the assessee has apart from endorsing the views of Ld.First Appellate Authority also drawn our attention to the order of this tribunal in the case of United India Insurance vide ITA No.1085/Chny/2017 dated 19.07.2024 and requested for sustaining the order of Ld.CIT(A). The Ld. Sr.Standing Couns ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owards amortization of premium paid on purchase of securities. Therefore, the ground raised by the assessee on this issue of amortization of premium paid on purchase of securities for the assessment years 2013-14, 2014-15, 2015-16, 2016-17, 2017-18, 2018-19 & 2019-20 is dismissed...." 12.2 We have noted that there is no difference in facts pointed out by the Ld.Counsel for the revenue in the present case viz a viz those available in the case of United India Insurance supra. Respectfully following the decision, we hold that there is no need to interfere with the order of the Ld.CIT(A) and the same is therefore confirmed. 13.0 The next issue raised by the revenue vide ITA Nos. 493, 494, 495 & 496 /Chny/2018, AYs: 2011-12, 2012-13, 2013-14, 2014-15 is regarding disallowance of provisions for claims incurred but not reported (IBNR) and incurred but not enough reported (IBNER). Brief factual matrix of the controversy at hand is that in the assessee's line of business claims arise qua insurance policies sold by it to its customers. With a view to factor in its liabilities arising on account of claims, the assessee creates provisions qua claims incurred but which have not been reported ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in the balance sheet of the insurance company and such claims are known as claims incurred, but not reported. Sometimes, damage/loss incurred may be reported, however, it was not enough reported and therefore, the assessee has made provision as per IRDAI guidelines. The liability of the assessee company is determined based on the actual loss/damage. Therefore, such provision is in accordance with guidelines and norms issued by IDRAI and thus, is deductible u/s. 37(1) of the Income Tax Act, 1961. 12. On the other hand, the Ld. Sr. Standing Counsel for the Revenue submitted that the assessee has created provision in anticipation of settlement of claims that were not ascertained. What is reported to the assessee is damage/ loss caused to the insured persons. According to the Sr. Standing Counsel, the assessee is yet to assess loss and determine amount to be compensated. Therefore, it is unascertained liability and same cannot be allowed as deduction. The Sr. Standing Counsel further submitted that this issue is covered by the decision of the ITAT., Chennai in assessee's own case for earlier assessment years, where the Tribunal has held that provision made for IBNR and IBNER is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 09-10. Hence, the CIT(Appeals) is not correct in allowing the claim of the assessee. Accordingly, the order of the CIT(Appeals) is set aside and that of the Assessing Officer is restored." 14. In this view of the matter and consistent with view taken by the co-ordinate Bench, we are of the considered view that the assessee is not entitled for deduction towards provision created for IBNR & IBNER and thus, we uphold the findings of the learned CIT(A) on this issue for the assessment years 2014-15, 2015-16, 2016-17, 2018-19 & 2019-20 and reject grounds taken by the assessee. Further, the assessee has also pleaded that with respect to AY 2017-18, the amount disallowable with respect to provisions for IBNR and IBNER claims cannot exceed Rs. 1250.89 crores being the amount debited to the revenue accounts of the assessee. The assessee submitted that the additional amount of Rs. 1582.58 crores being the amount not debited to the profit & loss account be deleted. We are in conformity with the views of the assessee that amount of monies, as provisions, not debited to the profit & loss account cannot be a part of the disallowance. Accordingly, the AO is directed to recalculate the disallowa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ordinate Bench in assessee's own case for earlier years as well as in case of other insurance companies involving similar issues. He placed on record the decision of ITAT in assessee's own case in ITA No. 3535 and 1702/Mum/2011 and ITA No. 1584 and 3596/Mum/2011 preferred by both the parties for Assessment Year 2006-07 and also appeal for Assessment Year 2008-09 dated 20/11/2015. He also submitted a case law compilation to support that issues are covered in this appeal. We have carefully considered the rival contentions and perused the orders of the lower authorities. We have also considered the order of the coordinate bench in assessee's own case as well other decision of coordinate benches involving similar issues. First ground of appeal is related to the provisions for claim Incurred but Not Reported (IBNR) and claim Page | 6 ITA No.14/Mum/2021 Tata AIG General Insurance Co. Ltd.; AY 15-16 Incurred But Not Enough Reported (IBNER) amounting to Rs.148,43,01,915/- held to be liable under section 37(1) of the Act by the learned Commissioner of income-tax (Appeals). 010. 011. Fact shows that the assessee has debited the above sum to the profit and loss account and claimed as allowabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ge | 8 ITA No.14/Mum/2021 Tata AIG General Insurance Co. Ltd.; AY 15-16 u/s 37 (1) of the act and the addition made by the learned AO was deleted. 012. We have carefully considered the rival contentions and perused the orders of the lower authorities. The facts show that during the year the assessee has made a provision of Rs.148,43,01,950/- towards claims Incurred But Not Reported (IBNR) and claims Incurred But Not Enough Reported (IBNER). The above deduction was claimed under section 36(1) of the Act. The basis of the claim was that the provision has been made for all the unsettled claims on the basis of the claims alleged by insured persons. Certain times the loss incurred are not reported in the balance sheet of the insurance company and therefore, such claims are classified as claims incurred but not reported. Certain times such claims are reported, however they were not adequately reported. These are called claims incurred but not enough reported. The assessee made the provisions on the basis of the guidelines provided by insurance regulator and development authority of India. The claims made and provided for, are certified by the Actuary in accordance with the guidelines and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for 6 different assessment years and found that the actual claim settled is always higher than the provisions made by the assessee. This it shows that the provisions made are not excessive. Further, it was stated before us that this claim is allowed to the assessee from year to year. In view of this, we find that assessee has incurred an expenditure, which is incurred during the year with respect to the provisions made for the IBNER and IBNR claims, on scientific basis and also certified by the valuer with respect to the methodology adopted in making such provisions. Thus, it satisfies the entire ingredient for its allowance u/s 37 (1) of the act. Thus, there is no Page | 11 ITA No.14/Mum/2021 Tata AIG General Insurance Co. Ltd.; AY 15-16 infirmity in the order of the learned CIT (A) in allowing the claim of Rs. 148,43,01,915/- under section 37(1) of the Act. Accordingly, the ground no.1 of the appeal is dismissed...." It is noted that the Hon'ble Coordinate Bench has considered the ratios laid down by Hon'ble Coordinate Bench of Kolkata Tribunal as well as the decision of Hon'ble Kolkata High Court. 13.4 Further we have noted that Hon'ble Delhi High Court order in the case of C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... find any merit in the addition made by the AO in this case. Hence, this ground of appeal is allowed." 14. We have heard both the parties and perused the records. In the light of the assessee's submissions herein above, we find that ld. CIT (A) has taken correct decision, which does not need any interference on our part. The case law from Kolkata Bench of ITAT duly holds that these are ascertained liabilities. Hence, we uphold the order of ld. CIT (A). " 7. The computation of profits of general insurance business is undisputedly regulated by the provisions made in the First Schedule of the Act and which requires an entity engaged in the business of insurance to compute its profits and gains from business as per its profit and loss account prepared in accordance with the Insurance Act, 1938, the rules framed under the said enactment or the Insurance Regulatory and Development Authority Act, 1999 and the rules and regulations framed by the IRDA. We find that the provisioning for IBNR is based upon the Insurance Regulatory and Development Authority of India (Assets, Liabilities and Solvency Margin of General Insurance Business) Regulations, 20168. 8. The determination of amo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion, if the mathematics produces negative value, the Appointed Actuary shall ignore the IBNR provision for that year of occurrence. (f) The estimation process shall not discount the estimated future development of paid claims to the current date." 9. While dealing with IBNR claims reserve, Clause 3(3) of Schedule II provides that IBNR would be estimated by usage of appropriate actuarial principles. IBNR itself is to be estimated on the basis of a study undertaken by an appointed actuary. Clause 4 then prescribes the various actuarial methods that may be used for the estimation of IBNR reserves. The said Clause reads as follows:- "4. ACTUARIAL METHODS (1) The following Standard Actuarial Methods may be used for the estimation of IBNR reserves: (a) Basic Chain Ladder Method (both on incurred and paid claims) (b) Bornhuetter Ferguson Method (both on incurred and paid claims) (c) Frequency - Severity Method (2) The Appointed Actuary shall use more than one method to arrive at an estimate that s/he believes is adequate to meet the future liabilities. (3) Appointed Actuary may use methods other than standard actuarial methods of IBNR estimation. (4) In his/her annual repo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces will be required to settle the obligation; and (c) a reliable estimate can be made of the amount of the obligation. If these conditions are not met, no provision can be recognised. 23. Liability is defined as a present obligation arising from past events, the settlement of which is expected to result in an outflow (2009) 13 SCC 283 from the enterprise of resources embodying economic benefits. A past event that leads to a present obligation is called as an obligating event. The obligating event is an event that creates an obligation which results in an outflow of resources. It is only those obligations arising from past events existing independently of the future conduct of the business of the enterprise that is recognised as provision. For a liability to qualify for recognition there must be not only present obligation but also the probability of an outflow of resources to settle that obligation. Where there are a number of obligations (e.g. product warranties or similar contracts) the probability that an outflow will be required in settlement, is determined by considering the said obligations as a whole. 24. In this connection, it may be noted that in the case of a manufac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds and those justifying the making of an appropriate provision. Historical trend was acknowledged to be a study of defects detected over a period of time and the data collated in respect thereof. The concept of historical trends was explained as under:- "35. In the present case, the High Court has principally gone by the judgment of the Supreme Court in Shree Sajjan Mills [(1985) 4 SCC 590 : 1986 SCC (Tax) 82 : (1985) 156 ITR 585]. That was the case of gratuity. For Assessment Year 1974-1975 the assessee Company sought to deduct a sum of Rs 18,37,727 towards the amount of gratuity payable to its employees and worked out actuarially. No provision was made for Rs 18,37,727. The claim for deduction was made on the ground that the liability stood ascertained by actuarial valuation and, therefore, was deductible under Section 37 of the 1961 Act. The Income Tax Officer allowed the deduction only in respect of the amounts actually paid by the assessee and the rest was disallowed on the ground of non- compliance with the provisions of Section 40-A(7) of the 1961 Act. This view of ITO was affirmed by CIT(A). 36. The Tribunal in Shree Sajjan Mills [(1985) 4 SCC 590 : 1986 SCC (Tax) 82 : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on an accrued basis was entitled to deduction either under Section 28 or under Section 37 of the said Act. This aspect, therefore, indicates that the present value of the contingent liability like the warranty expense, if properly ascertained and discounted on accrued basis, could be an item of deduction under Section 37 of the said Act. This aspect is not noticed in the impugned judgment. 40. We may add a caveat. As stated above, the principle of estimation of the contingent liability is not the normal rule. As stated above, it would depend on the nature of business, the nature of sales, the nature of the product manufactured and sold and the scientific method of accounting being adopted by the assessee. It will also depend upon the historical trend. It would also depend upon the number of articles produced. As stated above, if it is a case of single item being produced then the principle of estimation of contingent liability on pro rata basis may not apply. 41. However, in the present case, it is not so. In the present case, we have the situation of large number of items being produced. They are sophisticated goods. They are supported by the historical trend, namely, defects ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... possible of the amount of obligation. As stated above, Indian Molasses Co. [AIR 1959 SC 1049 : (1959) 37 ITR 66] is different from the present case. As stated above, in the present case we are concerned with an army of items of sophisticated (specialised) goods manufactured and sold by the assessee whereas Indian Molasses Co. [AIR 1959 SC 1049 : (1959) 37 ITR 66] was restricted to an individual retiree. On the other hand, Metal Box Co. of India [AIR 1969 SC 612 : (1969) 73 ITR 53] pertained to an army of employees who were due to retire in future. 48. In Metal Box Co. of India case [AIR 1969 SC 612 : (1969) 73 ITR 53] the company had estimated its liability under two gratuity schemes and the amount of liability was deducted from the gross receipts in the profit and loss account. The company had worked out its estimated liability on actuarial valuation. It had made provision for such liability spread over to a number of years. In such a case it was held by this Court that the provision made by the assessee Company for meeting the liability incurred by it under the gratuity scheme would be entitled to deduction out of the gross receipts for the accounting year during which the prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT Vs. Vinitec Corporation (P) Ltd. 278 ITR 337 which is referred by the Tribunal also. In that case the assessee had claimed deduction under Section 37 of the Act, inter alia, on the provision made by it in the year against future claims by customers under the warranty clause which was part of the sale. The AO disallowed the claim on the ground that it was a contingent liability. The Tribunal, however, accepted the assessee's claim holding that the liability was definite and certain quantification was done on estimate basis after taking into consideration the data for past years of the percentage of warranty expenses. The High Court affirmed the decision of the Tribunal holding that the warranty clause was a part of the sale document and imposed a liability upon the assessee to discharge its obligation under that clause for the period of warranty. It was a liability, which Neutral Citation: 2011 DHC:394-DB was capable of being construed in definite terms, which had arisen in the accounting year, although its actual quantification and discharge might be deferred to a future date. Once the assessee is maintaining his accounts on the mercantile system, a liability accrued, though to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of Commissioner of Inland Revenue (supra) where the Privy Council dealing with a taxpayer who was selling new motor vehicles to the dealers to indemnify them against warranty claims which, in turn, resulted in providing of warranty clause for 12 months from the date of delivery to the purchaser by the dealer, held as under :- "Held, dismissing the appeal, that, although the taxpayer's liability under the warranty for each vehicle sold was contingent on a defect appearing and being notified to the dealer within the warranty period so that no liability was incurred by the taxpayer until those conditions were satisfied, regard could be had to its estimation of warranty claims based on statistical information, which showed that as a matter of existing fact not future contingency 63 per cent. of all vehicles sold by the taxpayer contained defects likely to be manifested within the warranty period and require work under warranty; that since theoretical contingencies could be disregarded, the taxpayer was in the year of sale under an accrued legal obligation to make payments under those warranties and even though it might not be required to do so until the following year, it was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the warranty provision should be based on past experience of the company. A detailed assessment of the warranty provisioning policy is required particularly if the experience suggests that warranty provisions are generally reversed if they remained unutilized at the end of the period prescribed in the warranty. Therefore, the company should scrutinize the historical trend of warranty provisions made and the actual expenses incurred against it. On this basis a sensible estimate should be made. The warranty provision for the products should be based on the estimate at year end of future warranty expenses. Such estimates need reassessment every year." 18. Apart from other things, the Court highlighted that provision for warranty on turnover of the company based on past experience fulfills accrual concept as well the matching concept. The Court not only laid stress on the past experience based on historical trend of warranty provisions, it was also emphasized that this provided estimates under the assessment every year. 19. We may also point out at this stage itself that the Supreme Court distinguished the judgments in Sajjan Mills (supra) as well as Indian Molasses Co. (supra) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ranted in the Petitioner's favour...." 13.6 The above judicial ratios were not available on records while adjudicating the appeal in the case of United India Insurance supra as at ITA 1085/Chny /2017 dated 19.07.2024. The matter of allowance of IBNR and IBNER as an ascertained liability or as an unascertained liability has been considered. It is noted that in the case of appellant assessee the same meets the criteria laid down by the Hon'ble Coordinate Benches of Kolkata, Delhi and Mumbai as well as the Hon'ble Delhi and Mumbai High Courts. The impugned liability principally arising in view of guidelines formulated by IRDA and calculated by a IRDA approved actuarial valuer fulfills the ratio laid down by Hon'ble Apex Court mandating the that as long as a liability is properly ascertainable on the basis of empirical data or a known methodology, the same cannot possibly be held to be a contingent liability. The Hon'ble Supreme Court thus held that it is the right of an enterprise to make provisions for a liability which could be measured by a "substantial degree of estimation" and consequently that its allowance as an valid expenditure would be permissible. We have noted that fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the issue is covered by the cited decision of Hon'ble Madras High Court as well this tribunal. 14.2 We have noted that in the case of United India Insurance supra the following has been observed. "....18. The next common issue that came up for our consideration from the Revenue appeals for the assessment years 2014-15 to 2016-17 and 2018-19. The Assessing Officer has made disallowance for assessment years 2014-15 to 2016-17 and 2018-19. However, for assessment years 2017-18 & 2019-20, no disallowance was made by the Assessing Officer u/s. 14A read with Rule 8D of the Income Tax Rules, 1962. 18.1 During the previous year relevant to assessment years under consideration, the assessee has earned exempt income, and made suomotu disallowance voluntarily towards expenditure relatable to exempt income u/s. 14A. The Assessing Officer has disallowed expenditure relatable to exempt income u/s. 14A of the Act by invoking Rule 8D of Income Tax Rules, 1962, as substantial amount of investments in equities and mutual funds have been made by the assessee and part of remuneration and other expenses attributable to top executives are linked to this exempt income that would be earned out of suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome by provisions of section 14A. Accordingly, the grounds of appeal raised by the Revenue for AY 2014-15 to 2016-17 and 2018-19 are therefore dismissed and thus, the Ld.AO is directed to delete additions made..." 14.3 Again the Hon'ble Madras High court in assessee's own case in TCA No. 854 of 2018 have observed as under:- "............The petitioners have filed these application seeking a review of the Judgment dated 18.11.2021 in T.C.A.Nos. 839, 842, 848, 852, 853 and 854 of 2018 on the premise that the same suffers from errors apparent on the face of the record with regard to the substantial questions of laws (B) and (C) raised and considered in the above Tax Case Appeal: B. Whether the deductions under Section 14A of the Income Tax Act, 1961 stands excluded while computing income of an Insurance Company, in view of Section 44 of the Income Tax Act, 1961? C. Whether the profits on sale of investments is exempted under Income Tax Act, 1961? : 2. It is submitted that with regard to question B, this Court, after referring to the Judgment of the Delhi High Court in Principal Commissioner of Income Tax LTU, New Delhi Vs Oriental Insurance https://www.mhc.tn.gov.in/judis Com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the appellant inasmuch as the above direction does not suffer from any error apparent on the face of the record. The scope of a review application is limited to rectify errors apparent on the face of the record, however the Judgment dated 18.11.2021 insofar as it holds that https://www.mhc.tn.gov.in/judis the issue stands covered by the decision in Commissioner of Income Tax Vs. United India Insurance Co. reported in [2019] 111 taxmann.com 217 (Madras ) and remitting the matter back to the Tribunal cannot be said to be order which suffers from any error apparent on the face of the record. In any view it has only been directed that the Tribunal shall re-examine the matter keeping in view the above decision of this Court and thus no prejudice whatsoever is caused. 6. In view of the above, paragragh 5 of the order dated 18.11.2021 made in T.C.A No. shall stand modified as under: It is thus clear that Section 14A of Income Tax Act, 1961 stands excluded while computing the Income Tax of an Insurance Company, in view of the non-obstante clause contained in Section 44 of Income Tax Act, 1961, the questions of law stand decided against the Revenue. In all other respects the order d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cts and figures have not been clearly brought out on records. The amounts of money credited to profit and loss account would include amount of UPR disallowed by the assessee in earlier years. Within the meanings of proviso to Rule 6E, the amount disallowed in earlier years cannot be included in the current year, as the same would tantamount to double taxation. It is trite law that double taxation of income is not permitted under the income tax act. Be that as it may be we are of the view that ends of justice would met if the Ld. AO is given one more chance to readjudicate the matter. Accordingly, we set aside the order of the lower authorities and direct the Ld. AO to verify whether the amounts disallowed in earlier year have been credited to profit and loss account and if yes to reduce them from the amounts of the present year, in accordance with provisions of rule 6E. The Grounds of appeal raised by the revenue vide ITA Nos. 493, 494, 495 & 496/Chny/2018, AYs: 2011-12, 2012-13, 2013-14 and 2014-15 are therefore allowed for statistical purposes. 16.0 The next issue raised by the revenue vide ITA Nos. 493, /Chny/2018, AYs: 2011-12, is regarding disallowance of reinsurance premium ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibunal in General Insurance Corporation of India (supra). 65. We have considered the rival submissions on either side and perused the relevant material available on record. While making re- insurance premium, the assessee can retain the commission at the agreed rate and pay the balance to the re-insurer. The re-insurer may be either domestic insurance company or General Insurance Corporation. Hence, the assessee can retain the so-called commission. It is not a case of payment of commission. At the best, it can be termed as discount given to the insurance companies for making re-insurance premium. Therefore, as rightly found by Mumbai Bench of this Tribunal in General Insurance Corporation of India (supra), such payment cannot be construed as commission. Therefore, the assessee is not liable for deduction of tax. In view of the above, this Tribunal do not find any reason to interfere with the order of the lower authority and accordingly the same is confirmed....". 16.2 We have noted the facts of the present case are identical to those as available in assessee's case for earlier years adjudicated by the Hon'ble Coordinate Bench supra. We find ourselves to be in agreement with the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 165 ITD 27 (Delhi - Trib.) (SB). 18.1 We have heard the rival submissions in the light of material available on records. As regards the order of the Ld. AO we have noted that the same has been passed in a summary manner without any apparent application of mind. The Ld. Counsel for the assessee also submitted that the impugned controversy is covered in its favour by the decision of Special Bench of the Tribunal in the case of ACIT vs. Vireet Investments (P) Ltd. [2017] 165 ITD 27 (Delhi - Trib.) (SB). We have also noted that the Ho'ble Coordinate Bench of this tribunal in the case of United India Insurance Company Limited, Vide ITA No.1085/Chny/2017 dated 19.07.2024 on the impugned controversy concluded as under:- ".....17.1 At the outset, learned counsel for the assessee stated that this issue is squarely covered by the decision of Special Bench of the Tribunal in the case of ACIT vs. Vireet Investments (P) Ltd. [2017] 165 ITD 27 (Delhi - Trib.) (SB), wherein the Special Bench has considered an identical issue and after considering relevant facts held that computation under clause (f) of Explanation 1 to section 115JB(2) of the Act is to be made without resorting to computation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iance upon a catena of judicial rulings of Hon'ble tribunals, Hon'ble Madras High Court and Hon'ble Apex Court both upon the issue of admission per se of additional ground during present proceedings and upon the merits of the ground itself. The Ld. Counsel for the revenue argued that there is no merit in the contention of the assessee and that first proviso to provisions of section 40(a)(ii) mandate otherwise. 19.1 We have heard the rival submissions in the light of material available on records. It is the case of the assessee that it is eligible for claim of education cess and higher secondary education cess while computing the tax liability for AY-2013-14. We have noted the following statutory provisions of section 40(a)(ii):- ".....40. Amounts not deductible - Notwithstanding anything to the contrary in 3[section 30 to 38], the following amounts shall not be deducted in computing the income chargeable under the head ―Profits and gains of business or profession‖,- (a) in the case of any assessee- .................................................................................................................................................................... ..... X X X X Extracts X X X X X X X X Extracts X X X X
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