TaxTMI 
TaxTMI 
TaxTMI 
2025 (1) TMI 1636
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....) has erred, in deleting the disallowance of Rs. 2,30,10,949/- on account of U/s 14A of the Act (normal provision and provision U/s 115JB of the Act)? 3) Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred, in deleting the addition of Rs. 4,70,60,000/- on account of provision made for Standard Assets? 4) Whether on the fact and circumstances of the case CIT(A) was correct on fact that the view of Hon'ble High court in the case of Oriental Insurance Co. Ltd. V. DCIT order dated 30.08.2017 is in favor of assessee ignoring the fact the Hon'ble High court supports the view of the Revenue that profit from sale of investment is taxable w.e.f. A. Y. 2011-12 and issue of applicability of section 10(38) was not before the court." 3. Brief facts of the case:- The assessee is a Public Sector Undertaking of Government of India and is in the business of Non-Life Insurance, The assessee offers insurance covers for large projects like power plants, petrochemical, steel and chemical plants. It also offers various insurance products like Motor Policies, Health-Mediclaim/ Overseas Medi-claim Personal Accident, Motor Vehicle, Agr....
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....d no.2 the Revenue has contested the action of the Ld. CIT(A) in deleting the disallowance of Rs. 2,30,10,949/- on account of u/s 14A of the Act both under the normal provision and as well as the provisions u/s 115JB of the Act. The disallowance of 14A under the normal provisions of the Act was decided against the Revenue by the Hon'ble Delhi High Court in the case of the assessee company in ITA No.172/2020 vide order dated 04.03.2020. The relevant discussion in para no.9 & 10 of the said order is reproduced as under :- "9. We have heard learned counsels and are of the view that no substantial question of law arises for our consideration. The Tribunal has interpreted Section 44 read with the first schedule and concluded that applicability of Section 14A is excluded in relation to computation of income of an insurance company. We have examined the relevant provisions. Section 44 begins with a non-obstante clause and overrides the other provisions of the Act as mentioned therein including Section 14A. We are not convinced with the submission of Mr. Ajit Sharma that Section 14A would be applicable in respect of the Respondent. Section 14A does not have independent legs to....
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....der, on the basis of submissions not advanced before the Tribunal. We, therefore do not find any substantial question of law arising in relation to the view taken by the Tribunal." 7.1. Further, the addition of the aforesaid disallowance of Rs. 2,30,10,949/- on account of u/s 14A of the Act under the provisions of section 115JB of the Act has been decided against the Revenue by the Co-ordinate Bench of the Tribunal in the case of the assessee for AY 2015-16 in ITA No.5834/Del/2018, vide order dated 24.09.2021. The relevant discussion is reproduced as under :- 14. Ground of appeal No.3 by the Revenue reads as under :- "3. On the facts and the circumstances of the case and in law, Ld. CIT (A) has erred in deleting an addition of Rs. 25,85,91,755/- being disallowance u/s 14A of the I.T. Act made by the A.O. for the purpose of 115 JB of the Act." 15. Facts of the case, in brief, are that the AO computed the book profit u/s 115JB by adding the disallowance u/s 14A made by him at Rs. 25,85,81,755/-. In appeal, the ld. CIT(A), following the order for A.Y. 2014-15, deleted the addition made by the AO at Rs. 25,85,81,755/- for the purpose of computation of book....
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.... where in the case of an assessee, being a company, the income-tax, payable on the total income as computed under this Act in respect of any previous year relevant to the assessment year commencing on or after the 1st day of April, 2012, is less than eighteen and one-half per cent of its book profit, such book profit shall be deemed to be the total income of the assessee and the tax payable by the assessee on such total income shall be the amount of income-tax at the rate of eighteen and one- half per cent. (f) the amount or amounts of expenditure relatable to any income to which section 10 (other than the provisions contained in clause (38) thereof) or section 11 or section 12 apply; or (i) the amount or amounts set aside as provision for diminution in the value of any asset, if any amount referred to in clauses (a) to (i) is debited to the statement of profit and loss or if any amount referred to in clause (j) is not credited to the statement of profit and loss, and as reduced by, -- (i) the amount withdrawn from any reserve or provision (excluding a reserve created before the 1st day of April, 1997 otherwise than by way of a debit to the statement of profit and loss), if any suc....
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....al questions of law framed by a bench of this court are answered in favour of the assessee and against the revenue. In the result, the order passed by the tribunal dated 09.01.2015 insofar as it pertains to the findings recorded against the assessee is hereby quashed. In the result, the appeal is allowed." 21. Respectfully following the decision of the Hon'ble Karnataka High Court, cited (supra) we hold that the disallowance made u/s 14A could not be added to the book profit u/s 115JB of the Act. Accordingly, the order of the CIT(A) on this issue is upheld and the ground raised by the Revenue is dismissed." 7.2. The facts are identical in the case of the assessee for the present assessment year also. Therefore, respectfully following the order of the of the Hon'ble High Cour and the Co-ordinate Bench, the order of the Ld. CIT(A) on this issue is upheld and the ground raised by the Revenue is dismissed. 8. The ground no.3 raised by the Revenue has been decided against the Revenue by the Co-ordinate Bench of the Tribunal in the case of the assessee for AY 2016-17 in ITA No.6444/Del/2019, vide order dated 31.07.2023. The relevant discussion is reproduced as unde....
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.... in the circumstances of the case and in law. the Ld. CIT(A) has erred, in deleting the addition of Ris.1103,09.03,443- on account of proft on sale of Investment (normal provision)? 4. Whether on the facts and circumstances of the case CIT(A) was correct on fact that the view of Hon'ble High Court in the case of Oriental Insurance Co. Ltd. v. DCIT order dated 30.08.2017 is in favor of 05300500 ignoring the fact the HÆ¡n ble High Court supports the view of the Revenue that profit from sale of Investment is taxable wat. A.Y. |paras 4 2 and 4.3 Page 2. para 4 - conclusions at page 3. Page 9. para 6 - conclusions page 11, pars 67 CIT(A) folows ITAT decision in case of 'A' for AY 2011-12 reported in (2023) 145 taxmann.com 297 (Dehi - Trib.)/ (2023) 102 ITR(T) 122 (Deli - High Court in 'A' own case reported in 407 ITR 658(Del) - Kind reference is invited to the decision of Hon bie Dehi copy endosed at pages 96 to 109 of PB. relevant conclusions are at pages 104 to 108, paras 25 to 48. it has been held by High Court in this case that in years prior to AY 2011-12 owing to CBOT Circular No. 528 of 1988 Income from Profit on Sale/Redemption of Investments is not liable to tax. This dec....
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....onble Bench has held that 'A' is ertilled to claim benefit of exemption u's 10(38). AD has however been directed to verify about status of STT piryment. Thereafter, consistenty claim for exemption uis 10(36) of the Act on this income has been alowed by Hon'bie ITAT as under: · In AY 2012-13 in ITA No. 6134/Del/2016 vide onder dated 26° September 2023 copy enclosed al pages 190 to 194 of PB relevant @ page 193, para 7 · In AY 2013-14 in ITA No. 1962/De/2018 vide ceder dated 29" May 2023 copy enclosed at pegos 195 to 214 of PB meievent @ pages 197 to 209, paras 6 to 6.1 . In AYs 2014-15 & 2015-16 in ITA Nos. 5611 & 5612/Del/2018 vide order dated 08* January 2024 copy endosed at pages 215 to 225 of PB relevant @ pages 217 and 218, paras 5 and 6. · In AY 2016-17 in ITA No. 6444/Del/2019 vide order dateci 31" July 2023 copy enclosed at pages 227 to 231 of PB relevant @ page 229, para 5. Document 2 Income of 'A' is to be computed as per provision of section 44 r.w. Rule 5 of First Schedule. It has been Iwid by ITAT that while computing total income as per Rule 5r.w. section 44, provisions of section 14A are not applicable. Lead order in this regard in for A....