TaxTMI 
TaxTMI 
2022 (7) TMI 1640
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.... of Baroda, Andhra Bank and UK based financial and investment company Legal and General with individual share of 44%, 30% and 265 respectively. During this year assessee earned dividend income (not including the dividend income earned under pension fund scheme, if any) during the relevant year. The return of income of Rs..21,89,25,490/- being dividend had been claimed as exempt u/s. 10(34) of the Act. Assessing Officer disallowed the claim of dividend and held that dividend was taxable under provisions of section 44 of the Act. Further, Assessing Officer observed that addition on account of dividend income to the tune of Rs..21,89,25,490/- has been made based on the discussion on the issue of sec. 10(34) of the Act. 4. However, the Assessing Officer observed that the issue of disallowance u/s. 14A of the Act has not been considered as the whole dividend income has been taken as includible in the surplus as per section 44 of the Act. However, if at any stage of appellate proceedings in the case of the assessee, the dividend income is held as allowable then, the disallowance u/s. 14A is to be considered at that stage. Accordingly, he worked out the disallowance u/s. 14A r.w. Rule ....
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....he ground raised by the assessee by relying on the decision of ITAT in assessee's own case for A.Y. 2010-11. 8. With regard to 14A disallowance assessee submitted that provisions of section 14A cannot be invoked in the case of assessee who is engaged in the business of Life Insurance, Health Insurance and Annuity Business. 9. Further, it was submitted that Hon'ble Supreme Court in the case of GIC (106 taxman 389) held that "section 44 r.w. the rules contained in the First Schedule to the Act lays down an artificial mode of computing the profits and gains of Insurance business. For the purpose of Income tax, the figures in the accounts of the assessee drawn up in accordance with the provisions of the First Schedule to the Act and satisfying the requirement of Insurance Act are binding on the Assessing Officer under the Act and he has no general power to correct the errors in the accounts of an insurance business and undo the entries made therein". 10. Further, submitted that this issue is covered in favour of the assessee by the decision of the Coordinate Bench in the case of ICICI Prudential Insurance v. ACIT (supra). 11. After considering the submissions of the ass....
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....f the revenue has argued that the CIT(A) has wrongly allowed the claim of the assessee u/s 10(34) of the Act, therefore, the finding of the CIT(A) is not justifiable, hence, is liable to be set aside. However, on the other hand, the Ld. Representative of the assessee has strongly relied upon the order passed by the CIT(A) in question. Before going further, we deem it necessary to advert the finding of the CIT(a) on record: - "6.4 I have considered the facts of the case and the appellant's submissions. I find that identical issue had come up for consideration in the appellant's appeal for A.Y. 2010 11 wherein my Id. predecessor had observed and held as under: "5.3 I have considered the facts and circumstances of the case, appellant's submissions and the case laws supported by the appellant This issue had come into consideration of various judicial rulings which is as under: (i) ICICI Prudential Insurance vs. ACIT ITA Nos. 6854, to 6856, 6509, 7765 to 7767 and 7213/Mum/2010 In view of the above and respectfully following the same we hold that assessee is entitled to exemption under section 10. Therefore, we do not see any reason to diff....
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....and holding as under: "7. Regarding the 2nd issue, which relates to the disallowance of dividend income u/s 10(34) qua the provisions of section 44 of the Act, we find that the finding of the CIT(A) in para 5.3 of his order is fair and reasonable as the same is taken based on the various binding judicial precedents in the case of LIC vs Addl. CIT. : ICICI Prudential Insurance vs ACIT; SBI Life Insurance Company Ltd vs CIT etc, (contents on page 8 of the CIT (A) order are relevant . Accordingly, we affirm the order of the CIT (A) on this issue too. Thus, both the issues raised by the revenue are allowed in favour of assessee." Facts and issue being the same as that of the earlier year, respectfully following the decision of the Hon'ble Tribunal in the appellant's own case, the appellant's around of appeal is allowed." 7. On appraisal of the above said finding, we noticed that the CIT(A) has passed the order on the basis of the decision of Hon'ble ITAT in the assessee's own case in ITA. No. 7276/M/2014 vide order dated 11.01.2017 for the A.Y.2010-11. The facts are not distinguishable at the stage. No law contrary to the law relied by the assessee ha....