Bajaj Allianz General Insurance Company Ltd., Pune V. Deputy Commissioner of Income-tax,

ITA 1653/PUN/2015

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 6739 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 1 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 23-10-2018
• Assessment Year: 2006-2007
• Appeal Filed On: 14-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Revised return
• Section: 43B; 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A , PUNE , , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NO. 1 653 /P U N/201 5 / ASSESSMENT YEAR : 20 0 6 - 0 7 BAJAJ ALLIANZ GENERAL INSURANCE COMPANY LTD., 1 ST FLOOR, GE PLAZA, AIRPORT ROAD, YERAWADA, PUNE 411006 . / APPELLANT PAN: AABCB5730G VS. THE DY. COMMISSIONER OF INCOME TAX, CIRCLE 1(1), PUNE . / RESPONDENT / APPELLANT BY : SHRI P.J. PARDIWALA, MS. VASANTI PATEL, SHRI NIKHIL MUTHA & SHRI RAJAT SONI / RESPONDENT BY : S HRI RAJEEV KUMAR, CIT / DATE OF HEARING : 23 . 1 0 .201 8 / DATE OF PRONOUNCEMENT: 21 . 0 1 .201 9 / ORDER PER SUSHMA CHOWLA, J M : THE APPEAL FILED BY ASSESSEE IS AGAINST ORDER OF CIT (A) - 1 , PUNE , DATED 03 . 09 .201 5 RELATING TO ASSESSMENT YEAR 20 0 6 - 0 7 A GAINST ORDER PASSED UNDER SECTION 143(3) / 254 OF THE INCOME - TAX ACT , 1961 (IN SHORT THE ACT) . ITA NO. 1653 /P U N /20 1 5 BAJAJ ALLIANZ GENERAL INSURANCE CO. LTD. 2 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUND OF APPEAL: - ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A): GROUND NO.1: DI SALLOWANCE OF CONTRIBUTION TO ENVIRONMENTAL RELIEF FUND OF RS.70,31,561: ERRED IN UPHOLDING THE ACTION OF THE ASSESSING OFFICER (AO') IN DISALLOWING THE CONTRIBUTION TOWARDS ENVIRONMENTAL RELIEF FUND OF RS.70,31,561/ - UNDER PROVISIONS OF SECTION 43B OF T HE ACT. 3. THE ISSUE RAISED IN THE PRESENT APPEAL IS AGAINST THE DISALLOWANCE OF CONTRIBUTION TO ENVIRONMENTAL RELIEF FUND OF 70,31,561/ - UNDER THE PROVISIONS OF SECTION 43B OF THE ACT. 4. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE PRESENT APPEAL IS FILED BY THE ASSESSEE IN THE SECOND ROUND OF PROCEEDINGS BEFORE THE TRIBUNAL, WHEREIN IN EARLIER ROUND VIDE ORDER DATED 6.5.2013 , THE MATTER WAS SET ASIDE TO THE FILE OF ASSESSING OFFICER. THE ASSESSING OFFICER IN THE ORIGINAL ASSESSMENT PROCEEDINGS NOTE D THAT THE ASSESSEE HAD SUO MOTU INITIALLY DISALLOWED SUM OF 70,31,561/ - ON ACCOUNT OF ENVIRONMENTAL RELIEF FUND LIABILITY UNDER SECTION 43B OF THE ACT. SUBSEQUENTLY, THE ASSESSEE FILED REVISED CO MPUTATION OF INCOME WITH THE NOTE THAT IT HAD ERRONEOUSLY ADDED THE SAME AS DISALLOWABLE UNDER SECTION 43B OF THE ACT. THE ASSESSING OFFICER IN THE FIRST ROUND HAD NOT ENTERTAINED THE RELIEF CLAIMED BY THE ASSESSEE IN LINE WITH THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF GOETZE (INDIA) LIMITED [2006] 284 ITR 323 (SC), SINCE THE ASSESSEE HAD FAILED TO FURNISH ANY REVISED RETURN OF INCOME. THE DISPUTE RESOLUTION PANEL (DRP) HAD ALSO UPHELD THE DRAFT ASSESSMENT ORDER OF ASSESSING OFFICER AND HENCE, FINAL ASSESSMENT ORDER WAS PASSED. THE TRIBUNAL HAD SET ASIDE THE ISSUE BACK TO THE FILE OF ASSESSING OFFI CER TO CONSIDER THE CLAIM OF THE ASSESSEE. IN THE SECOND ROUND OF ITA NO. 1653 /P U N /20 1 5 BAJAJ ALLIANZ GENERAL INSURANCE CO. LTD. 3 ASSESSMENT PROCEEDINGS, THE ASSESSEE POINTED OUT THAT SINCE IT HAD NOT ROUTED THE SAID AMOUNT THROUGH THE PROFIT AND LOSS ACCOUNT , NO DISALLOWANCE COULD BE MADE UNDER SECTION 43B OF THE ACT. RELIANCE WAS PLACED ON DIFFERENT DECISIONS IN THIS REGARD. THE ASSESSING OFFICER WAS OF THE VIEW THAT THE LIABILITY WAS CREATED UNDER THE PUBLIC LIABILITY FUND ACT, 1999 (IN SHORT PLI ACT, 1999) TO WHICH PROVISIONS OF SECTION 43B OF THE ACT WERE APPLI CABLE. IN VIEW THEREOF , A SUM OF 70,31,561/ - WAS DISALLOWED AND ADDITION MADE IN THE HANDS OF THE ASSESSEE. 5. THE CIT(A) UPHELD THE ORDER OF ASSESSING OFFICER HOLDING THAT THE AMOUNT WAS COVERED UNDER CESS AND THERE WAS NO PROVISIONS IN THE ACT TO E XCLUDE SUCH CASE FROM THE AMBIT OF THE PROVISIONS OF SECTION 43B OF THE ACT. HE FURTHER HELD THAT THE ASSESSEE COULD CLAIM THE SAME IN THE YEAR OF PAYMENT. 6. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF CIT(A). 7. THE LD.AR FOR THE ASSESSEE POINTED T HAT THE ASSESSEE WAS A COLLECTING AGENCY ON BEHALF OF THE GOVERNMENT OF INDIA AND THE AMOUNT WAS TO BE HANDED OVER TO THE GOVERNMENT OF INDIA. OUR ATTENTION WAS DRAWN TO THE PLI ACT, 1999 AND IT WAS POINTED OUT THAT AS PER SECTION 23 OF THE SAID ACT , GOVE RNMENT WAS TO FORMULATE THE RULES FOR THE MANNER IN WHICH AND THE PERIOD WITHIN WHICH THE AMOUNT RECEIVED WAS TO BE REMITTED BY THE INSURER TO THE GOVERNMENT OF INDIA. THESE RULES WERE PRESCRIBED IN DECEMBER 2008 AND THE ASSESSEE MADE THE PAYMENT ON 02.01. 2009. OUR ATTENTION WAS DRAWN TO SECTION 4(1) AND 4(2C) OF THE SAID ACT. HE ALSO MADE A REFERENCE TO THE PROVISIONS OF SECTION 7 AND POINTED OUT THAT FROM ASSESSMENT YEAR 2002 - 03 ONWARDS THE ASSESSEE HAD ITA NO. 1653 /P U N /20 1 5 BAJAJ ALLIANZ GENERAL INSURANCE CO. LTD. 4 COLLECTED SUM OF 4.12 CRORES. IT WAS POINTED OUT THAT WHERE THE AMOUNT IS NEVER RECEIVED AS RECEIPT OF THE PERSON, WHICH IS NEVER ROUTED THROUGH THE PROFIT AND LOSS ACCOUNT AND, HENCE, THE QUESTION OF APPLICATION OF SECTION 43B OF THE ACT DOES NOT ARISE. RELIANCE WAS P LACED ON THE RATIO LAID DOWN BY THE HON'BLE SUPREME COURT IN THE CASE OF SIDDHESHWAR SAHAKARI SAKHAR KARKHANA LIMITED REPORTED IN 270 ITR 1 (SC). THE ASSESSEE STRESSED THAT BY MISTAKE IN THE ORIGINAL RETURN OF INCOME, IT HAD OFFERED THE SAME TO TAX. THE SECOND OBJECTION RAISED BY THE LD. AR FOR THE ASSESSEE WAS THAT WHERE NO DEDUCTION HAS BEEN CLAIMED ON ACCOUNT OF SAID FUND, THE PROVISIONS OF SECTION 43B OF THE ACT DO NOT APPLY. IT WAS FURTHER STRESSED THAT THE CIT(A) WAS WRONG IN STATING THAT THIS WAS CESS. THE LD.AR OF THE ASSESSEE POINTED OUT THAT WHERE THE GOVERNMENT OF INDIA DOES NOT PRESCRIBE THE SCHEME, THE ASSESSEE COULD NOT SUFFER AS ASSESSEE WAS READY TO PAY. HE THEN REFERRED TO RULE 5 UNDER SCHEDULE 1 R.W.S.44 OF THE I.T. ACT, WHEREIN SPE CIAL PROCEDURE FOR THE A SSESSABILITY OF INCOME OF GENERAL INSURANCE COMPANY IS PRESCRIBED. THE SAID RULE STARTS WITH THE PROFIT AND LOSS ACCOUNT AND SINCE THE AMOUNT IS NOT DEBITED TO THE PROFIT AND LOSS ACCOUNT , HENCE, PROVISIONS UNDER SECTION 43B OF THE ACT ARE NOT APPLICABLE. THE LD. AR OF THE ASSESSEE THEN PLACED RELIANCE ON THE FOLLOWING DECISIONS: - I ) SOMAIYA ORGENO - CHEMICALS LTD. VS. CIT [1974] 74 TAXMAN 206 (BOM); II ) CIT VS. NEW HORIZON SUGAR MILLS (P) LTD. [2004] 141 TAXMAN 254 (SC) 8. THE LD. AR ALS O INVITED OUR ATTENTION TO THE DEFINITION OF CESS AS HELD BY THE HONBLE SUPREME COURT IN THE CASE OF M/S GURUSWAMY & CO. ETC. VS. STATE OF MYSORE & ORS. AIR 67 SC 1512. THE LD. AR ALSO PLACED RELIANCE ON THE FOLLOWING DECISIONS: - ITA NO. 1653 /P U N /20 1 5 BAJAJ ALLIANZ GENERAL INSURANCE CO. LTD. 5 I ) CIT VS. MCDOWELL & CO. LTD., [2009] 314 ITR 167; AND II ) DALMIA CEMENT (BHARAT) LTD. VS. CIT [2013] 36 TAXMANN.COM 358 (DELHI) 9. THE LD.DR FOR THE REVENUE POINTED OUT THAT THE ASSESSEE HAD COLLECTED THE FUND AND HE WAS TAKING ADVANTAGE OF THE SAID FUND AND WAS EVEN EARNING INTERE ST ON THE FUND. THE LD.DR FOR THE REVENUE ALSO POINTED OUT THAT IN THE FINANCIAL YEARS 2001 - 2002 AND 2003 - 2004 THE ASSESSEE SUO MOTU HAD MADE THE AFORESAID DISALLOWANCE. ADDRESSING THE CONTENTION OF LD. AR OF THE ASSESSEE THAT IT WAS COLLECTING AGENCY; H ENCE, WHERE IT WAS STATUTORY LIABILITY, IT HAD TO BE DEPOSITED BEFORE FILING THE INCOME TAX RETURN AND SINCE THE ASSESSEE HAD FAILED TO DO SO, THE PROVISIONS OF SECTION 43B OF THE ACT ARE TO BE APPLIED. THE LD. DR FOR THE REVENUE FURTHER POINTED OUT THAT WHERE THE FUND WAS ESTABLISHED LATER, THEN THE ASSESSEE CAN CLAIM THE DEDUCTION UNDER SECTION 43B OF THE ACT ON THE DATE OF PAYMENT. HE STRESSED THAT THE CASE S RELIED UPON BY THE ASSESSEE ARE NOT RELEVANT TO THE ISSUE. HE ALSO POINTED OUT THAT IN CASE NO RULES WERE PRESCRIBED , THEN THE ASSESSEE COULD NOT TAKE ADVANTAGE OF THE SAME. HE PLACED RELIANCE ON THE FOLLOWING DECISIONS: - I ) OM PRAKASH AGARWAL VS. GIRI RAJ KISHORI & ORS., (1987) 164 ITR 376(SC); II ) CIT VS. ASSOCIATED PIGMENTS LTD. [1993] 71 TAXMAN 244 (CAL.) 10. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ASSESSEE WAS A JOINT VENTURE BETWEEN BAJAJ ALLIANZ GENERAL INSURANCE COMPANY LIMITED, INDIA AND ALLIANZ SE, GERMANY, INCORPORATED ON 31.03.2007. THE ASSESSEE RECEIVED THE REGISTRA TION CERTIFICATE AND APPROVAL ON 02.05.2001 FROM INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY (IRDA) TO CARRY ON GENERAL INSURANCE BUSINESS IN INDIA. THE ASSESSEE WAS ENGAGED IN FIRE, ITA NO. 1653 /P U N /20 1 5 BAJAJ ALLIANZ GENERAL INSURANCE CO. LTD. 6 MARINE , MOTOR AND MISCELLANEOUS (WORKMEN COMPENSATION EMPLOYERS LIABI LITY, PUBLIC PRODUCT LIABILITY , ENGINEERING, AVIATION, HEALTH, PERSONAL ACCIDENT, ETC. INSURANCE BUSINESS. FOR THE YEAR UNDER CONSIDERATION , THE ASSESSEE HAD IN THE RETURN OF INCOME SUO MOTU MADE A DISALLOWANCE OF 70,31,561/ - RELATING TO CONTRIBUTION TO THE ENVIRONMENT FUND LIABILITY UNDER SECTION 43B OF THE ACT. HOWEVER, DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE FILED REVISED COMPUTATION OF INCOME AND CLAIMED THE SAID AMOUNT AS DEDUCTIBLE. THE P LEA OF THE ASSESSEE WAS THAT THE ENVIRONMENT RELIEF FUND LIABILITY IS A CONTRIBUTION COLLECTED UNDER PUBLIC LIABILITY FUND ACT, 1999 EQUIVALENT TO THE AMOUNT OF PREMIUM ON PUBLIC LIABILITY POLICIES ISSUED AND DISCLOSED UNDER THE HEAD CURRENT LIABILITIES. THE AMOUNT COLLECTED TOWARDS CONTRIBUTION TO ENVIRONMENT RELIEF FUND WAS TO BE REMITTED IN A MANNER AS PRESCRIBED BY THE CENTRAL GOVERNMENT. HOWEVER, THE GOVERNMENT HAD NOT NOTIFIED THE MANNER OF REMITTING THE FUNDS SO COLLECTED TILL DECEMBER, 2008. AC CORDINGLY, THE ENTIRE LIABILITY TOWARDS THE CONTRIBUTION RECEIVED TOWARDS ENVIRONMENT FUND LIABILITY REMAINED UNPAID AS ON 31 ST MARCH, 2006. THE ISSUE WHICH ARISES BEFORE US IS THAT THE CONTRIBUTION SO COLLECTED BY THE ASSESSEE WHICH HAD TO BE REMITTED TO THE FUND CREATED UNDER PUBLIC LIABILITY FUND ACT, IN THE ABSENCE OF ANY SUCH FUND BEING CREATED TILL THE DUE DATE OF FILING OF THE RETURN OF INCOME AND, HENCE, NOT BEING CONTRIBUTED, WHETHER CAN BE ADDED AS INCOME OF THE ASSESSEE UNDER SECTION 43B OF THE ACT ? 11. THE RELEVANT PROVISIONS OF THE PUBLIC LIABILITY FUND ACT, 1991 ARE AS UNDER: - 4(1) EVERY OWNER SHALL TAKE OUT, BEFORE HE STARTS HANDLING ANY HAZARDOUS SUBSTANCE, ONE OR MORE INSURANCE POLICIES PROVIDING FOR CONTRACTS OF INSURANCE THEREBY HE IS INSURED AGAINST LIABILITY TO GIVE RELIEF UNDER SUB - SECTION (1) OF SECTION 3; ITA NO. 1653 /P U N /20 1 5 BAJAJ ALLIANZ GENERAL INSURANCE CO. LTD. 7 XXXXXX 4(2C) EVERY OWNER SHALL ALSO, TOGETHER WITH THE AMOUNT OF PREMIUM, PAY TO THE INSURER, FOR BEING CREDITED TO THE RELIEF FUND ESTABLISHED UNDER SECTION 7A, SUCH FURTHER AMO UNT, NOT EXCEEDING THE AMOUNT OF PREMIUM, AS MAY BE PRESCRIBED.; 12. THE CASE OF THE ASSESSEE BEFORE US IS THAT THE AMOUNTS COLLECTED TOWARDS ERF WERE SPECIFICALLY IDENTIFIED IN THE POLICY SCHEDULE ISSUED BY IT. THE ASSESSEE COLLECTS THE SAID AMOUNT FRO M THE OWNER (INSURED) OF THE INSURANCE POLICY BUT IT WAS ACTING ONLY AS A CHANNEL BETWEEN PROPOSED INSURED AND THE GOVERNMENT. THE LIABILITY TO CONTRIBUTE TO THE SAID FUND ARISES WHEN THE OWNER (INSURED) PAYS THE ADDITIONAL REMUNERATION TO THE INSURER . A S PER CLAUSE 4(2D) OF PLI ACT , THE LIABILITY OF INSURER WAS TO REMIT THE AMOUNT RECEIVED FROM THE OWNER UNDER SUB - SECTION ( 2C ) TO THE RELIEF FUND , IN SUCH MANNER AND WITHIN SUCH PERIOD AS MAY BE PRESCRIBED ; AND WHERE THE INSURER FAILS TO SO REMIT THE AMOUN T, SUCH AMOUNT SHALL BE RECOVERABLE FROM INSURER AS ARREARS OF LAND REVENUE OR OF PUBLIC DEMAND. IN OTHER WORDS , THE LIABILITY OF ASSESSEE (INSURER) IS TO DEPOSIT THE SA ID SUM COLLECTED FROM THE OWNER (INSURED) , TO THE RELIEF FUND. HOWEVER, THE MANNER TO DEPOSIT AND THE PERIOD WITHIN WHICH THE SAME IS TO BE DEPOSITED, IS TO BE PRESCRIBED BY THE GOVERNMENT OF INDIA. THE ASSESSEE THOUGH COLLECTS THE AMOUNT FROM THE OWNER (INSURED) BUT IT IS NOT THE INCOME OF THE ASSESSEE. THE ASSESSEE AT BEST IS A CONDUIT FOR DEPOSITING THE AMOUNT TO THE RELIEF FUND ON BEHALF OF THE OWNER (INSURED). IN SUCH CIRCUMSTANCES , THE COLLECTION OF THE CONTRIBUTION TO ERF ACCOUNT CANNOT BE REGARDED AS INCOME OF THE ASSESSEE. AT BEST IT IS GOVERNED BY THE PRINCIPLE OF D IVERSION OF INCOME BY OVERRIDING TITLE. IN THIS REGARD, WE FIND SUPPORT FROM THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF SIDDHESHWAR SAHAKARI SAKHAR KARKHANA LIMITED, 270 ITR 1(SC), WHEREIN IT HAS BEEN LAID DOWN THAT IN CASE THE ITA NO. 1653 /P U N /20 1 5 BAJAJ ALLIANZ GENERAL INSURANCE CO. LTD. 8 ASSESSEE ACTED AS AN AGENT IN COLLECTING THE AMOUNTS AND REMITTING THE SAME TO THE GOVERNMENT AND TRUSTEES, THEN THE MONEY COLLECTED BY THE ASSESSEE WAS NOT REACHING THE ASSESSEE AS PART OF ITS INCOME , BUT THE COLLECTION WAS MADE FOR AND ON BEHALF OF THE PERSON TO WHOM IT IS PAYABLE . WE FURTHER FIND SUPPORT FROM THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF NEW HORIZON SUGAR MILLS (P) LTD. [2004] 141 TAXMAN 254 (SC) AND THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF SOMAIYA ORGENO - CHEMICALS LTD. [1994] 7 4 TAXMAN 206 (BOMBAY) FOR THE AFORESAID PROPOSITION. IN SUCH CIRCUMSTANCES, WHERE THE ASSESSEE HAS COLLECTED THE CONTRIBUTION TO THE ERF FROM THE OWNER (INSURED) THEN HE IS ONLY ACTING AS A CUSTODIAN OF THE SAID FUND AND THE SAID AMOUNT CANNOT BE REGARDED AS INCOME OF THE ASSESSEE. IN CASE THE AMOUNT IS NOT THE RECEIPT OF THE ASSESSEE , NOT ROUTED THROUGH PROFIT AND LOSS ACCOUNT, THEN THERE IS NO QUESTION OF APPLICABILITY OF PROVISIONS OF SECTION 43B OF THE ACT. 13. ANOTHER ASPECT WHICH NEEDS TO BE KEPT IN MIND IS THE ABSENCE OF A MECHANISM OF MAKING CONTRIBUTION TO ERF ; THOUGH UNDER THE ACT, THE ASSESSEE HAS COLLECTED THE AMOUNT FROM THE OWNER (INSURED) , BUT IN THE ABSENCE OF THE FUND BEING CREATED, THE ASSESSEE WAS HANDICAPPED IN TRANSFERRING THE AMOUN T SO COLLECTED TO THE FUND. THE MANNER OF REMITTANCE WAS PRESCRIBED IN DECEMBER 2008 AND THE ASSESSEE HAS PAID THE ACCUMULATED BALANCE ON 2.9.2009. IN THE ABSENCE OF THE CREATION OF FUND , THE ASSESSEE HAD NO MEANS OF DEPOSITING THE SAID AMOUNT AND THE AS SESSEE IN SUCH CIRCUMSTANCES CAN NOT BE HELD RESPONSIBLE FOR NON - DEPOSITING THE CONTRIBUTION TO ERF. IN ANY CASE , WE HAVE ALREADY HELD IN THE ABOVE PARAS THAT THE ASSESSEE WAS ONLY THE COLLECTOR ITA NO. 1653 /P U N /20 1 5 BAJAJ ALLIANZ GENERAL INSURANCE CO. LTD. 9 OF FUNDS OF THE AMOUNT WHICH WAS TO BE DEPOSITED ON BEHALF OF THE OWNER (INSURED), WHE N THE MECHANISM WA S PROVIDED FOR SUCH DEPOSIT. 14. BEFORE PARTING, WE MAY ALSO POINT OUT THAT THERE IS NO MERIT IN THE ORDER OF CIT(A) IN HOLDING THE SAID PAYMENT TO BE IN THE NATURE OF CESS. THE HONBLE SUPREME COURT IN THE CA SE OF M/S GURUSWAMY & CO. ETC. (SUPR A) HAS DECIDED THE SAID ISSUE AT PARA 21 OF ITS JUDGMENT AND HAS HELD THAT THE WORD CESS MEANS TAX AND GENERALLY USED WHEN THE LEVY IS FOR SUCH SPECIFICALLY ADMINISTRATIVE EXPENSES WHICH THE NAME INDICATES I.E. HEALTH CESS, EDUCATION CESS, ROAD CESS , ETC . THE SAID LEVY (I.E. CESS) IS AN ADDITIONAL LEVY WITH TAX AND IS WITHIN THE POWERS OF STATE LEGISLATURE TO LEVY THE SAME. APPLYING THE SAID PRINCIPLE TO THE FACTS OF THE CASE, WHERE THE LEVY IS PRESCRIBED UNDER THE PL I ACT, CANNOT BE SAID TO BE A STATE LEVY OF CESS . THUS, WE FIND NO MERIT IN THE ORDER OF THE CIT(A) IN THIS REGARD. ALLOWING THE CLAIM OF THE ASSESSEE, WE HOLD THAT THE FUND COLLECTED BY THE ASSESSEE W AS NEITHER FEE , TAX OR CESS A ND, HENCE, DO NOT COME WITHIN THE AMBIT OF SECTION 43B OF THE ACT. 1 5 . THE LAST POINT FOR THE ADJUDICATION IS THE SPECIAL MANNER OF DETERMINATION OF INCOME OF THE INSURANCE COMPANIES AS PRESCRIBED UNDER RULE 5 OF SCHEDULE 1 OF THE ACT . THE PROFIT AND LOSS ACCOUNT DISCLOSED BY THE ASSESSEE I . E. ITS ANNUAL ACCOU NTS ARE SACROSANCT . T HE SAID RULE PROVIDES THAT THE INCOME TO BE DETERMINED IS SUBJECT TO CLAUSE 8 I.E. IF ANY EXPENDITURE IS DEBITED TO THE PROFIT AND LOSS ACCOUNT , THEN THE SAME CAN BE ADDED BACK. AS POINTED OUT IN THE PARA S ABOVE, THE ASSESSEE HA D NOT DE BITED THE AFORESAID AMOUNT TO THE PROFIT AND LOSS ACCOUNT , BUT SHOWN AS CURRENT LIABILITIES AND CONSEQUENTLY , THE SAME CANNOT BE ADDED BACK TO THE PROFITS OF THE BUSINESS FOR THE YEAR OF INSURANCE ITA NO. 1653 /P U N /20 1 5 BAJAJ ALLIANZ GENERAL INSURANCE CO. LTD. 10 BUSINESS . ACCORDINGLY, THE DISALLOWANCE MADE BY THE ASS ESSING OFFICER OF 70,31,561/ - IS HEREBY DELETED. THE GROUND OF APPEAL RAISED BY ASSESSEE IS THUS, ALLOWED. 1 6 . IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON THIS 21 ST DAY OF JANUARY , 201 9 . SD/ - SD/ - ( ANIL CHATURVEDI) (SUSHMA CHOWLA) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; DATED : 21 ST JANUARY , 201 9 . PKM / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPONDENT; 3. ( ) / THE CIT(A) - 1 , PUNE ; 4. THE PR. CIT - I , PUNE ; 5. 6. , , / DR A , ITAT, PUNE ; / GUARD FILE . / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE