TaxTMI 
TaxTMI 
2016 (3) TMI 1367
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....crop insurance. It had filed its return declaring income of Rs. 247,79,13,474/-. The AO while completing the assessment made disallowance of Rs. 4,28,13,369/- u/s 14A and also made addition of Rs. 14,54,000/- on account of provision for stock holding and other charges. 3. Ld. CIT(A) in his order has noted that the AO reduced that amount and added only Rs. 58,11,413/- in the rectified order as against original disallowance of Rs. 4,28,13,369/-. 4. Before ld. CIT(A) it was submitted that section 44 provided for application of special provisions for computation of profits and gains of insurance business in accordance with Rule 5 of the first schedule and, therefore, it was not permissible for the AO to travel beyond sec. 44 and the First....
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.... of facts. "On the facts and circumstances of the case, the provisions of Section 14A of the Income tax Act are not applicable to the appellant case in view of the special provisions of See 44 of the Income Tax Act and in accordance with the judgments in following cases GIC v. Addl. CIT Range 13, T. Bom, 2012(ID2) ITA no. 6260/MUM GIC Vs. ACIT. Kotak Mahindra Old Mutual Life Insurance Ltd. v. ACIT dated 30.09.2011, ITA no. 2901/Mum/2010. CIT v. Kribhco dated 18.07.2012 (Delhi HC) 2012-(349)-ITA- 0618-DEL. 7. First we take up the additional ground. In this regard ld. counsel referred to the decision of ITAT Delhi Bench "C" in the case of Oriental Insurance Co. Ltd. vs. ACIT (ITA no. 5462 & 5463/Del/2003....
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....ule 5 of the First Schedule. In the light of these special provisions coupled with non obstante clause the AO is not permitted to travel beyond these provisions. 24. Section 14A contemplates an exception for deductions as allowable under the Act are those contained u/s 28 to 43B of the Act. Section 44 creates Special application of these provisions in the cases of insurance companies. We, therefore, agree with the assessee and delete the disallowance made by the AO which is based on the application of sec. 14A of the act as according to us, it is not permissible to the AO to travel beyond section 44 and First Schedule of the Income-tax Act. 8. Respectfully following the decision of the ITAT in the case of Oriental Insurance Co. ....
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....butable to earning of exempted income and therefore not allowable u/s 14A of the LT. Act, 1961 r.w.r. 8D(i) of the I.T. Rules, 1962. As it is held by the under signed in paragraph 3 of this order that expenses related to exempted company earned by the assessee company is to be computed in accordance with rule 80 of the 1.T. Rules, 1962 and therefore to be disallowed." 10. Ld. CIT(A) confirmed the addition. Ld. counsel referred to page 106 of the PB, wherein P&L account for the year ending 31.3.2008 is contained. 11. Ld. counsel submitted that the expenditure on this head of account was actually paid by the assessee but inadvertently shown it as provision. Ld. counsel further submitted that this expenditure has been allowed in earlier ....