TaxTMI 
TaxTMI 
2015 (2) TMI 316
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....nce. Based on its capacity of retention, the assessee company enters into further contract of reinsurance of the risks underwritten by it on direct basis. Under these contracts of reinsurance, the insurance company pays a certain share of the premium to the reinsurer as a consideration for the reinsurer sharing in the losses of the insurer on account of claim payout to the insured. Thus underlying principle behind reinsurance is spreading of the underwritten risk. The insurer reinsures that part of the underwritten risk, which is beyond its retention capacity. The insurer shares the premium received from the insured with the concerned reinsurer under a contractual arrangement, for example, under treaty or under facultative arrangement. 3....
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.... 3. That on the facts and circumstances of the case and in law, the Ld. AO/TPO erred in invoking the provisions of Section 37 of the Act for disallowing the expenses incurred on courtesies and entertainment amounting to Rs. 47,30,966/-. 4. That on the facts and circumstances of the case and in law the Ld. AO/TPO erred in invoking the provisions of Section 14A of the Act and making a disallowance of Rs. 6,70,000/-. 5. That the Ld. AO has grossly erred in initiating penalty proceedings u/s 271(1)(c) of the Act. 6. That the impugned order passed by the Ld.AO is non speaking in nature. 7. That the orders passed by the Ld. AO in pursuance to the directions of the Dispute Resolution Panel and that of the TP....
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....o AE. The DRP further observed that the international transaction of the facultative premium ceded to the AEs and commission charged thereon were not at arm's length. It was also observed by the DRP that the Department is in appeal before the Hon'ble High Court in the earlier years, therefore, for the sake of consistency and to protect the interest of revenue, the objection of the assessee was rejected. The assessee has also submitted an application under Rule 29 of the ITAT Rules, 1963 for admitting additional evidences. Ld. AR pleaded that the assessee could not get adequate/ sufficient opportunity to furnish the requisite copies of the contracts which are necessary to demonstrate a comparison of risk profile of the facultative re....
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....tative reinsurance shall be necessary in comparative analysis of the risk factor in the reinsurance under treaty reinsurance and facultative reinsurance. In view of these facts, we admit these additional evidences furnished by assessee and in the interest of justice and equity and for the cause of advancement of justice and for fair play, we find it appropriate to remit this issue to the file of the Assessing Officer for deciding de novo after considering the additional evidences as admitted by us. We order accordingly. Ground Nos.1 and 2 & 2.1 to 2.3 are restored back to the file of the Assessing Officer. 7. Ground No.3 is against the disallowance of deduction claimed by the assessee amounting to Rs. 47,30,966/- u/s 37 of the Income-tax....
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....ound no-1 of the assessee and ground no-2 of the revenue are allowed for statistical purposes." Respectfully following the aforesaid order of the ITAT, we restore back this issue to the file of the Assessing Officer. 10. With regard to Ground No.4, at the outset of the hearing, ld. AR submitted that this issue is covered by the decision of ITAT, Delhi Bench 'C', New Delhi in ITA No.5771/Del/2011 dated 21.06.2013. 11. We have heard both the sides on the issue. After going through the order of the aforesaid decision of ITAT, Bench 'C', New Delhi, we find that this issue is covered by the decision of the ITAT and the relevant para of the order is reproduced below :- "6. We have heard the rival submissions and peruse....
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....submissions. The order of the Tribunal in the case of Oriental Insurance Co. Ltd. (supra) was based upon the decision of Hon'ble Supreme Court in the case of General Insurance Co. of India Ltd. v. CIT [1999] 240 ITR 139, in which the apex court categorically held that the provisions contained in section 44 are special provisions dealing with computation of the profits of insurance business. Looking to the decision and the order, it is held that the profits of the business had to be computed in accordance with section 44 and Rule 5 of the First Schedule. The learned DR was not able to point out error in the disallowance computed by the learned CIT (Appeals). Therefore, it is held that there is no such error in his order, which requires c....