TaxTMI 
TaxTMI 
2021 (10) TMI 230
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....he assessment of income of the life insurance business is done in a rather peculiar manner, under section 44 read with First Schedule of the Income Tax Act 1961, wherein taxable income is uninfluenced by the actual expenditure, notwithstanding anything contained in section 28 to 43B, inasmuch as rule 2 in first schedule provides that "(t)he profits and gains of life insurance business shall be taken to be the annual average of the surplus arrived at by adjusting the surplus or deficit disclosed by the actuarial valuation made in accordance with the Insurance Act, 1938 (4 of 1938), in respect of the last inter-valuation period ending before the commencement of the assessment year, so as to exclude from it any surplus or deficit included therein which was made in any earlier inter-valuation period". The question then arises whether any disallowance under section 14A in respect of expense attributable to tax-exempt income. The view of the Assessing Officer is that disallowance under section 14A is applicable and based on rule 8D, disallowance has been computed. The stand of the assessee is that since no expenses have been allowed as a deduction for expenses attributable to earning the....
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.... on the petition under rule 27 straightaway, we must first understand the bigger picture. 6. What emerged as true motivation for this approach is indeed interesting, and we must spend a few minutes dealing with the same. The relevant facts, from this perspective, are as follows. The assessee before us is a public sector undertaking engaged mainly in the business of providing life insurance. While its scrutiny assessment under section 143(3) was completed on 30th December, 2011, the finalized assessment was reopened on 19th February 2015, on two counts- first, missing out on disallowance under section 14A in respect of expenses attributable to tax-exempt income; and, second, the inadmissibility of excessive foreign tax credit granted to the assessee. Its reassessment was thus finalized on 29th February, 2016 at an assessed income of Rs. 16,520.91 crores- including disallowance under section 14A amounting to Rs. 854.96 crores, and withdrawing inadmissible foreign tax credit of Rs. 7.57 crores. So far as the first point regarding disallowance of Rs. 854.96 crores is concerned, the assessee moved an appeal before the CIT(A) and succeeded in the said appeal. However, so far as withdr....
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....ective of the intended fruits of this labour, in our humble understanding of the law, the path so adopted will not yield anything more to the assessee than what the assessee would have got anyway by dismissal simpliciter of the revenue's appeal. Let us see the rationale of this proposition. It is interesting to note that rule 27 of the ITAT Rules 1963 provides that "(t)he respondent, though he may not have appealed, may support the order appealed against on any of the grounds decided against him". What can thus be supported is the order impugned in appeal, and, in effect, the conclusions arrived at in the impugned order. In other words, even though the respondent may support on any of the grounds decided against the respondent by the CIT(A), he can never seek more than what the CIT(A) has given him. It is for this reason that the respondent can only "support the order". That is materially distinct a situation vis-à-vis a situation in which the respondent is in appeal or is in cross objection, against the order of the CIT(A), before the Tribunal. It is for the reason when an assessee is in appeal or cross-objections before the Tribunal, he can not only support the conclusions....
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....en by the respondent which affects the appellant adversely is that a ground cannot be permitted to be taken by the respondent which relates to that part of the decree against the respondent and in favour of the appellant or relates to the modification of the decree passed by the lower court in favour of the respondent; we agree with Mr. Joshi that such a ground cannot be allowed to be taken unless the respondent has filed a cross-appeal or has filed cross-objections in the appeal of the appellant. But, if the fresh ground sought to be urged has no such effect and is only for the purpose of maintaining the decree of the lower court as it is, we do not think that it is a ground which affects the appellant adversely. A ground which would affect the appellant adversely is a ground which in the event of its succeeding puts the appellant in a position worse than that in which he was under the decree of the lower court. ............ ............. In our opinion..........the respondent will not be permitted to raise a ground which will work adversely to the appellant is that the respondent will not be entitled to raise a ground which he can only raise provided he....
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....titled to support the decree which is in his favour on any grounds which are available to him, even though the decision of the Lower Court in his favour may not have raised those grounds. In this regard the Division Bench had held that the powers of the Appellate Tribunal are similar to those of an Appellate Court under Order XLI Rule 22 of the Code of Civil Procedure, 1908. 12. Now, in the present case, the Commissioner of Income Tax (Appeals) allowed the appeal of the Assessee in part and deleted the disallowance made by the Assessing Officer to the extent of Rs. 13.73 lacs. However, the Commissioner of Income Tax (Appeals) confirmed the disallowance in regard to the balance representing an amount of Rs. 14.96 lacs. The Assessee's appeal against the order of the Commissioner of Income Tax (Appeals), was withdrawn, perhaps because it was barred by limitation. Once the appeal was withdrawn, it was only open to the Assessee to support the order of the Commissioner of Income Tax (Appeals) on any of the grounds decided against him. Hence, while the Assessee would support the order, that would mean that the Assessee would be entitled to urge that the deletion of the disall....