TaxTMI 
TaxTMI 
2019 (11) TMI 516
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....Briefly stated, the facts of the case are that the assessee company has been set up to provide financial security to persons engaged in agriculture and elite activities, through insurance product and other support services, as per declared policy of the Government of India. The assessee company is promoted by the General Insurance Corporation of India (GIC), National Bank for Agriculture and Rural Development (NABARD) and four Public Sector Insurance Companies viz. National Insurance Company Ltd., New India Assurance Company Ltd., Oriental Insurance Company Ltd. and United India Insurance Company Ltd. As in the past, the assessee company is engaged in the business of Agriculture Corp Insurance. 4. During the course of scrutiny assessment proceedings, the Assessing Officer noticed that the assessee has invested its funds as per the investment pattern prescribed by the IRDA Regulations on Investments, and the company's Investment Policy. Gross income from investments amounted to Rs. 252.56 crores, which included an investment income of Rs. 8.62 crores. The Assessing Officer found that the profit and loss account excludes income from investment amounting to Rs. 8,62,47,181/-, w....
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....d directions to the appellant company to credit the interest earned to corpus fund only as the income earned belongs to the Government. The Ministry of Agriculture, Department of Agriculture and Cooperation vide letter dated 28.06.2007 has directed the appellant company to add up the interest accrued in the corpus fund. The appellant has filed this copy of the letter as Annexure A to the submission.x The appellant has also filed the auditor's observation and comments of the management on the objections raised by the CAG wherein it is mentioned that CAG has raised objections on the accounts of the appellant company and suggested that interest earned to be credited to corpus fund and it was to be accepted by the appellant company being a public sector company. The remark sheet has been attached by the appellant as Annexure B to the submission. It is submitted by the appellant that corpus fund belonged to and owned by the Government.' The company used the funds as per the investment guidelines of IRDA along with the normal business investment and credited the proportionate interest amount directly to the corpus fund as directed by the Government of India vide its letter dated 28.0....
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....in the instant case, the amount credited to corpus of the fund according to Government directives and guidelines should be excluded from the total income of the appellant company." 10. After discussing certain other judicial decisions, the ld. CIT(A) observed that the income received from investments and credited to the corpus fund has been credited as per the directions of the Government of India and such income was earned out of the amount received from the Central Government and State Government in the corpus fund for specified purposes by the Government of India. Accordingly, he deleted the addition of Rs. 8,62,47,181/-. 11. Before us, the ld. DR vehemently stated that the appellant's activities in respect of investments out of corpus fund vis a vis other investments are same for which common expenses have been debited in the Profit and Loss Account. Further, the assessee has utilized the corpus funds, ownership/ right to use, vests with the assessee. The ld. DR further stated that the ld. CIT(A) has simply referred to the submissions of the assessee and has deleted the additions without any speaking order. Therefore, the matter should be restored to the file of the ld....
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....order of the coordinate bench in ITA No. 5779/DEL/2015 order dated 09th November 2017. We find that the coordinate bench has followed the earlier order of the coordinate bench in ITA No. 3115/DEL/2013. The relevant findings of the coordinate bench read as under: "We have considered the rival contentions and gone through the records. The provisions of section 44 read as under. 'Insurance business, - 44 : Notwithstanding anything to the contrary contained in the provisions of this Act relating to the computation of income chargeable under the head 'interest on securities', 'income from house property', 'capital gains' or 'income from other sources' or profits and gains of any business of insurance, including any such business carried on by a mutual insurance company or by a cooperative society, shall be computed in accordance with the rules contained in the First Schedule. 23. The above provision makes it very clear that section 44 applies notwithstanding anything to the contrary contained within the 'provisions of the income-tax Act relating to computation of income chargeable under different heads. We agree with the....