2015 (2) TMI 1372 - AT - Income Tax

ITAT Mumbai: Assessee wins appeal on deduction disallowance, interest levy upheld

The ACIT 10 (1), Mumbai Versus M/s. ICICI Lombard General Insurance Co. Ltd. And Vice-Versa

The ITAT Mumbai ruled in favor of the assessee, dismissing the Revenue's appeal on the disallowance of deduction for gains on the sale of investment and ... Disallowance of deduction for gains on sale of investment - HELD THAT:- As in own case [2014 (5) TMI 729 - ITAT MUMBAI] Tribunal has considered the issue at para- 3 of its order and at para 5.4 the Tribunal following the earlier orders of the Tribunal in assessee’s own case decided the issue in favour of the assessee and against the Revenue. Respectfully following the decision of the Co-ordinate Bench we decide this issue in favour of the assessee and against the Revenue and confirm the findings of Ld. CIT(A). Ground No.1 is accordingly dismissed. Disallowance under section 10(15) - HELD THAT:- Tribunal in the case of ICICI Prudential Insurance Company Ltd. [2012 (11) TMI 13 - ITAT MUMBAI] has considered the decision of Life Insurance Corporation of India [1977 (11) TMI 25 - BOMBAY HIGH COURT] and in the case of New India Assurance Company Ltd. [1967 (10) TMI 16 - BOMBAY HIGH COURT] the assessee is entitled to get exemption under section 10 of Act, 1961. A similar issue was considered by the Hon’ble Jurisdictional High Court in Writ Petition [2011 (12) TMI 70 - BOMBAY HIGH COURT] has quashed and set aside the notice issued for reopening of the assessment when the Revenue sought to reopen the completed assessment for disallowing the claim of deduction allowed under section 10 of the Act. In the original assessment order. Respectfully following the aforementioned judicial decision we confirm the findings of the Ld. CIT(A) on this issue and dismiss ground No.2 of the appeal. Disallowance made under section 14A - HELD THAT:- We find that similar issue was considered by the Tribunal [2013 (10) TMI 1130 - ITAT MUMBAI] concluded by holding that the issue is decided in favour of the assessee. Issues Involved:1. Disallowance of deduction for gains on sale of investment.2. Disallowance under section 10(15) of the Income Tax Act 1961.3. Disallowance made under section 14A of the Act.4. Levy of interest under section 234B and 234D.Issue 1: Disallowance of deduction for gains on sale of investmentThe ITAT Mumbai heard cross-appeals by the Revenue and the assessee against the same order of the Ld. CIT(A)-21, Mumbai for A.Y 2007-08. The Revenue raised two grounds of appeal related to the deletion of the disallowance of deduction for gains on the sale of investment and the disallowance under section 10(15) of the Income Tax Act 1961. The Tribunal noted that the issues raised by the Revenue had been previously decided in favor of the assessee by the Tribunal in the assessee's own case for assessment year 2002-03. The Tribunal, following its earlier decisions, ruled in favor of the assessee and against the Revenue, confirming the findings of the Ld. CIT(A) and dismissing the Revenue's appeal.Issue 2: Disallowance under section 10(15) of the Income Tax Act 1961Regarding the disallowance under section 10(15) of the Act, the Tribunal referred to a similar issue considered in the case of ICICI Prudential Insurance Company Ltd. and judicial decisions, including one by the Hon'ble Jurisdictional High Court. The Tribunal concluded that the assessee was entitled to exemption under section 10 of the Act, following the judicial decisions. As a result, the Tribunal confirmed the findings of the Ld. CIT(A) and dismissed the Revenue's appeal on this issue.Issue 3: Disallowance made under section 14A of the ActIn the assessee's appeal, the grievance related to the disallowance made under section 14A of the Act. The Tribunal noted that a similar issue had been decided in favor of the assessee in the assessee's own case for assessment year 2004-05. Following the earlier decision, the Tribunal ruled in favor of the assessee and against the Revenue on this issue.Issue 4: Levy of interest under section 234B and 234DThe assessee also challenged the levy of interest under section 234B and 234D. The Tribunal acknowledged that the levy of interest is mandatory and directed the AO to levy interest as per the provisions of the law. Consequently, the appeal filed by the assessee was allowed on this ground.In conclusion, the ITAT Mumbai dismissed the Revenue's appeal while allowing the assessee's appeal on the issues of disallowance under section 14A of the Act and the levy of interest under section 234B and 234D. The Tribunal upheld the decisions in favor of the assessee based on previous judicial rulings and findings of the Ld. CIT(A).