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2021 (7) TMI 275

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.... October, 2004. It filed its return of income on 27.11.2014 declaring total income at Rs. 50,76,46,500/-. The AO completed the assessment determining the total income of the assessee at Rs. 52,58,20,152/- wherein he made the following additions/disallowances:- Income From Business -     Income Declare   50,76,46,500/- Add: Disallowance of amortization of investment Rs. 1,43,46,219.44 Rs. 1,43,46,219.44 Disallowance on account of interest on TDS Rs. 960/- Rs. 960/- Disallowance on account of Bonus Unpaid Rs. 6,62,612/- Rs. 6,62,612/- Disallowance on account of Leave Encashment Unpaid Rs. 31,63,861/- Rs. 31,63,861/-     Rs. 52,58,20,152/- 3. In appeal, the ld. CIT(A), following the orders of....

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....in securities and the evidence thereof to justify its claim. The assessee filed all those details and submitted that these are verifiable with reference to books of account of the assessee. So far as the query raised by the AO as to why the amortization in respect of investment in securities charged to Profit & Loss Account should not be disallowed as the investment activity of the assessee is distinct from its life insurance business, the assessee submitted that such observation is misconceived as the investment activity has to be undertaken by the assessee company for carrying on the life insurance business as per Insurance Act and as per the guidelines of IRDA. The balance sheet and the accounts are prepared in accordance with the Insura....

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....counts and the details filed by the assessee, he noted that the assessee has shown Rs. 1,43,46,219.44 as amortization (charge)/credit against the interest earned on such securities. 9. According to the AO, the contention of the assessee is not maintainable so far as the claim of amortization is concerned. He observed that in some cases such investments have been made from the local market where cost has been incurred more than the face value of the securities. However, the market rate of such securities is not significantly less than purchase cost because in a majority of such investments in securities, further investments have been made in secured funds where the chances of any significant fall does not exist. He noted that as per the pra....

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....nd the provisions of section 28 to 43B of the Act are not applicable in the case of Life Insurance Business. Since these grounds relate to assessment of Life Insurance business these are taken together. 4.2.2 The facts of the case are similar to that of the case of the appellant for AY 2012-13 and 2013-14 and are covered by my order dt. 21.12.2015 and 09.06.2015 in Appeal Nos. 239/14-15 and 395/15-16 as also that of my Lnd. predecessor in AYs 2006-07 to 2011-12 in Appeal Nos. 136 and 664/09-10, 236/10-11, 398/11-12, 157 751/13-14 wherein it has been held that the provisions of sections 28 to 43 of the Act are not Applicable to the case of the appellant where the accounts are to be prepared in accordance with provisions of section 44 read ....

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....Harries (P) Ltd. vs. CIT, reported in 73 Taxmann 555. The ground raised by the Revenue on this issue is accordingly allowed. 13. Ground of appeal No. 4 relates to the order of the CIT(A) in deleting the addition of Rs. 6,62,612/- made by the AO on account of bonus unpaid by invoking the provisions of section 43B. We find, the ld. CIT(A) deleted the addition on the ground that identical issue was decided by his predecessors in the preceding so many assessment years. As per provisions of section 43B(c) any sum referred to in clause (ii) of sub-section (1) of section 36, payment of bonus shall be allowed as an expenditure on actual payment. Since the assessee admittedly had not paid such bonus before the specified date for which the auditors ....