TaxTMI 
TaxTMI 
2015 (8) TMI 76
X X X X Extracts X X X X
X X X X Extracts X X X X
....of investment is not taxable in the hands of assessee in the year under appeal." 2. "On the facts and in the circumstances of the case and in law the Ld. CIT(A) erred in deleting deduction disallowed on account of amortization of debts securities of Rs. 3,27,69,854/- without appreciating the facts" Grounds of Assessee's Appeal: 1. The Commissioner of Income-tax (Appeals)-4, Mumbai (hereinafter referred to as the CIT(A) ] erred in not admitting the additional grounds of appeal claiming deduction for pre-operative expenses of Rs. 6,422,568/-. 2. Without prejudice to (1) above, the CIT(A) ought to have directed the Assessing Officer ('AO') to allow deduction for pre-operative expenses of Rs. 6,422,568/- amortised during the yea....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed the rival contentions carefully. The dispute is regarding taxability of gain on sale of investment in case of the assessee which is in the business of general insurance. The profit of a general insurance company is required to be computed under the provisions of section 44 read with rule 5 of part B of 1st Schedule. The rule 5(b) which was applicable till assessment year 1988-89 specifically provided for taxability of gain on sale of investment. The said rule 5(b) was however deleted w.e.f assessment year 1989-90. The CBDT in circular No.528 dated 16.12.88 which has been reproduced in para 3 earlier has clarified that the amendment of rule 5(b) from assessment year 1989-90 was with a view to provide exemption of the profit earned on sale....
X X X X Extracts X X X X
X X X X Extracts X X X X
....597/Mum/2009. (copy of order placed on our record and also given to Ld. DR. 3.1 According to facts of the present case, the assessee has amortized debit securities for Rs. 3,27,69,854/- involving bonds/investments and debit securities and claimed as deduction in the return of income claiming that premium/discount relating to the securities is amortized over a period till the maturity. The AO did not agree and reject the claim of the assessee. Ld.CIT(A) has accepted the claim of the assessee on the basis of aforementioned decision of ITAT in the case of TATA AIG General Insurance vs. ACIT(supra) and referred to the following observations of the Tribunal: "7. On a careful consideration of the facts and the rival contentions, we are of the v....
X X X X Extracts X X X X
X X X X Extracts X X X X
....iture or allowance Which is not admissible under the provisions of sections 30 to 43B" appearing in the subrule has been explained by the Supreme Court to mean that there should be a specific prohibition against the expenditure or allowance in which case alone the Assessing Officer can add back the same to the balance of profits. it is common ground that there is no such specific prohibition against the allowance of the expenditure in the above sections of the Act. it may be noted that though rule 5(a) of the First Schedule considered by the Supreme Court in the above judgment was slightly different, but the words "any expenditure or allowance which is not admissible under the provisions of sections 30 to 43A" were present and the same word....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... AO did not agree and in the remand report he submitted that the said decision of the Tribunal has not been accepted by the Revenue and Revenue's appeal is pending in the High Court. After considering all these submissions Ld. CIT(A) has dismissed this ground for the reason that assessee did not make this claim in the return and also did not file revised return. Such claim has also not been examined by AO either on facts, on merits or about the allowability or otherwise of the said claim as per law. Ld. AR submitted that in the interest of justice the said issue should be restored back to the file of AO as neither making the claim in the return nor filing the revised return is necessary to submit a claim which is legally admissible to t....