TaxTMI 
TaxTMI 
2018 (11) TMI 129
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....ssment order, the difference between the interest accrued as per the balance sheet (which included interest paid at the time of purchase of securities) and the interest as per the profit and loss account was added to the income of the assessee. The original assessment was completed at a taxable income of Rs. 2,89,55,200/- whereas the reassessment was completed at a total income of Rs. 5,00,21,010/- after making an addition of Rs. 2,10,65,809/- which was in respect of the amount of interest alleged to have escaped taxation as per the revenue audit objection. In the appeal before the Ld. CIT (A), the reopening of the assessment by the Assessing Officer was annulled. On merits also, the Ld. CIT (A) held in favour of the assessee considering the fact that the assessee had followed Accounting Standard 13 issued by the Institute of Chartered Accountants of India which dealt with pre-acquisition interest paid and post acquisition interest income. The revenue is in appeal against the order of the Ld. CIT (A) and the ground raised by the department challenges the action of the Ld. CIT(A) in deleting the addition of Rs. 2,10,65,809/- made by the AO on account of accrued income from investmen....
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.... department's appeal for assessment year 2008-09 wherein the department is challenging the order dated 05.12.2012 passed by the Ld. CIT (A)-I, New Delhi wherein the Ld. CIT(A) has issued directions to the AO to compute the income of the assessee u/s 44 of the Act. Thus, this year is also identical in facts and issues to assessment years 2005-06, 2006-07 and 2007-08. 1.5 ITA No. 6245/Del/2013 is department's appeal for assessment year 2009-10 and the department is challenging the order dated 20.09.2013 passed by the Ld. CIT (A)-I, New Delhi wherein, as in earlier assessment years 2005-06, 2006- 07, 2007-08 and 2008-09, the Ld. CIT (A) has directed the AO to compute the income of the assessee in terms of provisions of Section 44 of the Act. 1.6 ITA No. 6246/Del/2013 is the department's appeal for assessment year 2010-11 and the order under challenge has been passed by the Ld. CIT (A)-I, New Delhi wherein vide order dated 25.09.2013, the Ld. CIT (A) has directed the AO to determine the income of the assessee in terms of provisions of Section 44 of the Act. The facts and issues are identical in this year also. 1.7 ITA No. 3480/Del/2012 is the assessee's appeal for assessment year 20....
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.... under challenge before the ITAT, the order of the Ld. CIT (A) to that extent remained unchallenged and, therefore, the quashing of reassessment proceedings stands accepted by the department and, accordingly, the appeal of the department only on merits becomes mere academic in nature. 3.1 For the other six appeals preferred by the department for assessment years 2005-06 to 2010-11 on identical issue, the Ld. Sr. Advocate placed reliance on the order of the ITAT Delhi Bench the case of Max New York Life Insurance Company vs. DCIT reported in (2018) 91 taxman.com 477 (Delhi Trib.) wherein vide order dated 5th January, 2018 it has been indicated that Section 44 debars the Revenue to apply provisions of Section 28 to 43 B of the Act while computing profit and gains for an Insurance Company. It was also submitted that the Ld. CIT (A) had rightly allowed the assessee's additional ground raised before him because it is the mandate of the Income Tax Law that correct income has to be computed under the correct provisions of the Act and although initially the assessee company had filed its return/s of income under incorrect provisions, the assessee company did file the revised computation/s....
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....med that the impugned amount of interest had not been taxed, the revenue audit objection as well as the consequent reassessment proceeding was not on sound legal footing in the absence of finding that the income computed by the assessee was not in accordance with the provisions of First Schedule or that the said amount of interest was to be included as per the computation provided in parts A or B of the said Schedule and was not so included. The Ld. CIT (A) has further observed that there is no such finding by the C & AG or the Revenue in this regard and therefore the reassessment order was liable to be annulled. Further, a perusal of Para 5.5 of the impugned order again shows that the facts clearly indicate that there was no material in possession of the AO other than the observation of revenue audit to proceed against the assessee. The Ld. CIT (A) has observed that the change of opinion was not even based on any fact observed by the AO but on a presumptive observation of revenue audit and, therefore, the case squarely fell within the realm of 'change of opinion' which could not have been the basis for reopening of settled assessments, particularly after the lapse of 4 years. The ....
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....ides other provisions of the Act for the purpose of computation of profit and gains from the life insurance business, we find no reason to interfere with the directions of the Ld. CIT (A) in all the captioned years and we uphold his direction that the income of the assessee should be computed in accordance with the provisions of Section 44 of the Act. Accordingly we dismiss the grounds raised by the department in all the six appeals. Accordingly ITA Nos. 6243/Del/2013, 6244/Del/2013, 5624/Del/2011, 1347/Del/2013, 6245/Del/2013 and 6246/Del/2013 stand dismissed. 5.3 ITA No. 3480/Del/2012- In this appeal the assessee is challenging the upholding of penalty of Rs. 6,13,947/- imposed u/s 271(1)(c) of the Act. It is evident from the notice issued u/s.274 r.w.s. 271 of the Act dated 05.09.2011 for the impugned year that the Assessing Officer has not specifically mentioned as to under which limb of Section 271(l)(c) of the Act the penalty proceedings had been initiated by him, i.e., whether for concealment of particulars of income or for furnishing of inaccurate particulars of income. The Hon'ble High Court of Karnataka in the case of CIT vs. Manjunatha Cotton & Ginning Factor, reported ....