2019 (3) TMI 480

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....t of the assessment order passed by the AO u/s. 143(3) of the Income Tax Act (Act), dated 27-02-2014. 2. The Ld. AR submitted for the Bench that the assessee is engaged in the business of General Insurance. The Ld. AR submitted that the AO made the following four additions in the assessment order as per the details below:     Rs. a. Profit on sale of investments claimed as exempt u/s. 10(38) 588,85,02,720 b. Disallowance u/s. 14A 30,52,81,492 c. Payment to clubs 2,83,505 d. Unutilized CEN VAT Credit 4,30,42,802 3. The Ld. AR submitted that this is second round of litigation before the Tribunal. In the first round, the Hon'ble ITAT vide its order dt. 03-08-2018, restored the is....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ule-5 of First Schedule of the Income Tax Act was omitted w.e.f. 01-04-1989 by the Finance Act, 1989. 3.1. Ld. Counsel for the assessee also submitted that the intent of Clause(b) was to provide exemption to General Insurance Companies on profits on sale of investments to enable them to play an active role in the capital market. Now the Rule 5(b) of the First Schedule has been amended by the Finance Act, 2010 by re-inserting Clause-5(b), which provides that - any gain or loss on realization of investments shall be added or deducted, as the case may be, if such gain or loss is not credited or debited to Profit and Loss A/c, which is applicable from 1st April, 2011. Ld. AR submitted that the said amendment would not make the assessee liabl....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ores on 26-09- 2019. The said demand is primarily on account of disallowance of exemption u/s. 10(38) of the Act in respect of gain/profit on sale of investments, which was claimed exempt u/s. 10(38) of the Act to the extent of Rs. 588,85,02,720/-. Though both the parties tried to argue the case on merits, we would like to make it clear that at this stage, we are not going on merits of the case and deciding the stay petition only. In this case the assessee has already deposited Rs. 25,00,00,000/- against the outstanding demand. The assessee has tried to make out a prima facie case in its favour by stating. We are therefore of the opinion that stay should be granted subject to the condition that assessee shall deposit another Rs. 25,00,00....