TaxTMI 
TaxTMI 
2019 (10) TMI 1402
X X X X Extracts X X X X
X X X X Extracts X X X X
....e. 4. On the facts and in the circumstances of the case and in law, ld. CIT (A) has erred in reversing the action of the AO in computing income of the assessee u/s 115JB of the Act." Addition on account of interest: 3. Brief facts of the case are that the assessee is a public sector undertaking of Government of India, conducting the business of non-life insurance for large projects, motor car, health, medi-claim and for other products and establishments. During the year, the company has received an interest income of Rs. 92,00,59,000/- which the Assessing Officer brought to tax on the grounds that the interest i s accruing to it every year on debentures, loans and bonds has been provided for. The matter has reached to the level of Tribunal on the earlier years from 2002 onwards wherein the matter from 2002-03, 2004-05 , 2007-08, 2008-09 and 2011-12 has been deleted the addition continuously. 4. We have perused the order dated 29.05.2009 passed by the coordinate Bench of the Tribunal in assessee's own case for AYs 2002-03 and 2004-05, which goes to prove that this issue has already been decided in favour of the assessee by returning following findings:- "9. We have heard both....
X X X X Extracts X X X X
X X X X Extracts X X X X
....86-87 & 1988-89 by returning following findings:- "8. We find substance in the contention of learned counsel for the assessee. 9. Section 44 of the Act is a special provision dealing with the computation of profits and gains of business of insurance. It being a non obstante provision, has to prevail over other provisions in the Act. It clearly provides that income from insurance business has to be computed in accordance with the rules contained in the First Schedule. It is not the case of the Revenue that the assessee has not computed the profits and gains of its Insurance business in accordance with the said rules. The scope of section 44 of the Act came up for consideration before the Supreme Court in General Insurance Corpn.'s case (supra), and their Lordships observed thus "Section 44 of the Income-tax Act is a special provision governing computation of taxable income earned from business of insurance . It opens with a non obstante clause and thus has an overriding effect over other provisions contained in the Act. It mandates the assessing authorities to compute the taxable income for business of insurance in accordance with the provisions of the First Schedule.A plain rea....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f the CIT(A), in the light of his discussion in the impugned order . 12. We have carefully considered; the rival contentions and gone through the records , The Tribunal in assessment year 1999- 2000 has held that expenditure incurred for maintenance of the company's own guest houses is covered under section 30(a)(ii) of the Act. Therein the Tribunal accepted the plea of the assessee that in respect of the guest houses owned by the assessee, repair expenses will have to be allowed as deduction under section 30(a)(ii) of the Act. Once the expenditure is allowable under section 30(a)(ii), if the expenditure of incurred on repair and maintenance of guest house taken on lease should also be allowed. In the light of the aforesaid order of the Tribunal, we decide the matter, for the AYs in question, in favour of the assessee." 9. Hence, following the decision rendered by the coordinate Bench of the Tribunal , we are of the considered view that when the expenditure incurred by the assessee company for maintenance of company's own guest houses, the same is covered u/s 30(a) of the Act. The repair expenses thereof would al so be allowed as deduction as section 30(a) of the Act. So, we....
X X X X Extracts X X X X
X X X X Extracts X X X X
....same shall be done in accordance with the rules prescribed in First Schedule of the Act, meaning thereby ss. 28 to 43B shall not apply. No other provision pertaining to computation of income will become relevant. According to the learned counsel, two presumptions that follow on a combined reading of ss. 14, 14A and 44 and r. 5 of the First Schedule are: (a) That no head-wise bifurcation is called for. The income, inter alia, of the business of insurance is essentially to be at the amount of the balance of profits disclosed by the annual accounts as furnished to the Controller of Insurance under the Insurance Act , 1938. The said balance of profits is subject only to adjustments thereunder. The adjustments do not refer to disallowance under s . 14A of the Act. (b) Profits and gains of business as referred to in (a) above have only to be computed in accordance with r. 5 of the First Schedule. 20. Sec . 44 creates a specific exception to the applicability of ss. 28 to 43B. Therefore, the purpose, object and purview o f s. 14A has no applicability to the profits and gains of an insurance business. 21. The learned Departmental Representative strongly justified the action of th....