Agriculture Insurance Company of India Ltd., New Delhi v. DCIT, New Delhi

ITA 5779/DEL/2015 | 2011-2012
Pronouncement Date: 09-11-2017 | Result: Allowed

Appeal Details

RSA Number 577920114 RSA 2015
Assessee PAN AAECA2874P
Bench Delhi
Appeal Number ITA 5779/DEL/2015
Duration Of Justice 2 year(s) 20 day(s)
Appellant Agriculture Insurance Company of India Ltd., New Delhi
Respondent DCIT, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 09-11-2017
Appeal Filed By Assessee
Tags No record found
Order Result Allowed
Bench Allotted G
Tribunal Order Date 09-11-2017
Assessment Year 2011-2012
Appeal Filed On 19-10-2015
Judgment Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES: G NEW DELHI BEFORE SHRI NK SAINI ACCOUNTANT MEMBER AND SHRI JOGINDER SINGH JUDICIAL MEMBER ITA NO. 5779 /DEL/201 5 A.Y. 201 1 - 12 AGRICULTURE INSURANCE CO. OF INDIA LTD. 13 TH FLOOR AMBADEEP BUILDING 14 KG MARG NEW DELHI 110 001 PAN: AAECA2874P VS . DCIT CIRCLE 1(1) NEW DELHI (APPELLANT) (RESPONDENT) APPELLANT BY SHRI AKASH SINGHAL C.A. RESPONDENT BY SH. KAUSHLENDRA TIWARI SR.D.R. DATE OF HEARING 07 TH NOVEMBER 2017 DATE OF PRONOUNCEMENT 09 TH NOVEMBER 2017 ORDER PER NK SAINI ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE L D.CIT(I) NEW DELHI DATED 18.8.2015. THE F OLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPEAL. L(A) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) [CIT(A)] HAVING HELD THAT PROVISIONS OF SECTION 14A READ WITH RULE 8D ARE NOT APPLICABLE TO THE A PPELLANT OUGHT TO HAVE NOT CONFIRMED THE DI SALLOWANCE OF RS. 41 38 913/ - AND THE REASONS ASSIGNED FOR DOING SO ARE WRONG AND CONTRARY TO THE P ROVISIONS OF THE ACT AND RULES MADE THERE UNDER. 2 L(B) THE ID.CIT (A) HAVING ADMITTED AND ALLOWED THE GROUND OF APPEAL NO. 1 RAISED BEFORE HIM FOR NON APPLIC ABILITY OF PROVISIONS OF SECTION 14A READ WITH RULE 8D TO THE APPELLANT ERRED IN CONTINUING DISALLOWANCE U/S 14A TO THE EXTENT OF SUO MOTTO OFFERED IN THE RETURN OF INCOME FOLLOWING THE SUPREME COURT DECISION IN CASE OF GOETZE INDIA LTD. 284 ITR 323. L(C ) THE LD.CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE TO THE EXTENT OF RS.41 38 913/ - WHILE ADJUDICATING THE GROUND OF APPEAL NO. 2 WHEREIN THE RELIEF SOUGHT BY THE APPELLANT WAS WITHOUT PREJUDICE TO GROUND OF APPEAL NO.1 RAISED IN REGARD TO ADDITIONAL DISA LLOWANCE OF RS.2 50 038/ - U/S 14A MADE BY THE LD. A.O. THE APPELLANT CRAVES LEAVE TO ADD ALTER AMEND AND/OR MODIFY ALL OR ANY OF THE ABOVE GROUNDS OF APPEAL ON OR BEFORE THE DATE OF HEARING. 2. DURING THE COURSE OF HEARING THE LD.COUNSEL FOR THE ASSESSEE AT THE VERY OUTSET STATED THAT THE ISSUE UNDER CONSIDERATION IS COVERED IN FAVOUR OF THE ASSESSEE VIDE ORDER DT. 1.3.2016 IN ITA 3115/DEL/2013 FOR THE A.Y. 2008 - 09 IN ASSESSEE S OWN CASE A COPY OF WHICH HAS BEEN PLACED ON RECORD. IN HIS RIVAL SUBMISSIONS THE LD.D.R. ALTHOUGH SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW BUT COULD NOT CONTROVERT THE AFORESAID CONTENTION S OF THE LD.COUNSEL FOR THE ASSESSEE. 3. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAIL ABLE ON RECORD. WE FIND THAT THIS ISSUE IS FULLY COVERED IN FAVOUR OF THE ASSESSEE IN ASSESSEE S OWN CASE IN ITA 3115/DEL/13 FOR THE A.Y. 2008 - 09 VIDE PARAS 7 AND 8 AS UNDER. 7. FIRST WE TAKE UP THE ADDITIONAL GROUND. IN THIS REGARD LD.COUNSEL REFERRED TO THE DECISION OF ITAT DELHI BENCH CIT(A) IN THE CASE OF ORIENTAL INSURANCE CO. LTD. VS. ACIT (ITA NO.5462 & 5463/DEL/2003 DATED 27.2.2009) 130 TTJ (DEL.) 388 WHEREIN THE TRIBUNAL IN PARAS 22 TO 24 HAS OBSERVED AS UNDER. WE HAVE CONSIDERED THE R IVAL CONTENTIONS AND GONE THROUGH THE RECORDS. THE PROVISIONS OF SECTION 44 READ AS UNDER. INSURANCE BUSINESS - 44 : NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THE PROVISIONS OF THIS ACT RELATING TO THE COMPUTATION OF INCOME CHARGEABLE UNDER THE HEAD INTEREST ON SECURITIES INCOME FROM HOUSE 3 PROPERTY CAPITAL GAINS OR INCOME FROM OTHER SOURCES OR PROFITS AND GAINS OF ANY BUSINESS OF INSURANCE INCLUDING ANY SUCH BUSINESS CARRIED ON BY A MUTUAL INSURANCE COMPANY OR BY A COOPERATIVE SOCIETY SHALL BE COMPUTED IN ACCORDANCE WITH THE RULES CONTAINED IN THE FIRST SCHEDULE. 23. T HE ABOVE PROVISION MAKES IT VERY CLEAR THAT SECTION 44 APPLIES NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED WITHIN THE 'P ROVISIONS OF THE INCOME - TAX ACT RELATING TO COMPUTATION OF INCOME CHARGEABLE UNDER DIFFERENT HEADS. WE AGREE WITH THE LEARNED C OUNSEL THAT THERE IS NO REQUIREMENT OF HEAD - WISE BIFURCATION CALLED FOR WHILE COMPUTING THE INCOME U/S 44 OF THE ACT IN THE CASE OF A INSURANCE COMPANY: 'THE INCOME OF THE BUSINESS OF INSURANCE IS ESSENTIALLY TO BE AT THE AMOUNT OF THE BALANCE OF PROFITS D ISCLOSED BY THE ANNUAL ACCOUNTS AS FURNISHED TO THE CONTROLLER OF INSURANCE. THE ACTUAL COMPUTATION OF PROFITS AND GAINS OF INSURANCE BUSINESS WILL HAVE TO BE COMPUTED IN ACCORDANCE WITH RULE 5 OF THE FIRST SCHEDULE. IN THE LIGHT OF THESE SPECIAL PROVISION S COUPLED WITH NON OBSTANTE CLAUSE THE AO IS NOT PERMITTED TO TRAVEL BEYOND THESE PROVISIONS. 24. SECTION 14A CONTEMPLATES AN EXCEPTION FOR DEDUCTIONS AS ALLOWABLE UNDER THE ACT ARE THOSE CONTAINED U/S 28 TO 43B OF THE ACT. SECTION 44 CREATES SPECIAL APP LICATION OF THESE PROVISIONS IN THE CASES OF INSURANCE COMPANIES. WE THEREFORE AGREE WITH THE ASSESSEE AND DELETE THE DISALLOWANCE MADE BY THE AO WHICH IS BASED ON THE APPLICATION OF SEC. 14A OF THE ACT AS ACCORDING TO US IT IS NOT PERMISSIBLE TO THE AO TO TRAVEL BEYOND SECTION 44 AND FIRST SCHEDULE OF THE INCOME - TAX ACT. RESPECTFULLY FOLLOWING THE DECISION OF THE ITAT IN THE CASE OF ORIENTAL INSURANCE CO. LTD. (SUPRA) THE ADDITIONAL GROUND RAISED BY ASSESSEE IS ALLOWED. ACCORDINGLY IT IS HELD THAT THE PROVISIONS OF SECTION 14A ARE NOT APPLICABLE IN THE CASE OF ASSESSEE. THEREFORE THE ADDITION OF RS. 23 31 454/ - STANDS DELETED. 4. RESPECTFULLY FOLLOWING THE ORDER IN ITA 3115/DEL/2013 WE ALLOW THE APPEAL OF THE ASSESSEE. 5. IN THE RESULT THE APPEA L OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 0 9 T H NOVEMBER 2017. S D / - S D / - (JOGINDER SINGH) ( NK SAINI) JUDICIAL MEMBER ACCOUNTANT ME MBER DATED: 0 9 T H NOVEMBER 2017. M ANGA 4 COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR 6. GUARD FILE BY ORDER ASST. REGISTRAR ITAT DELHI BENCHES NEW DELHI