Appeal details
Counselvise Citation
[2017] 127 COUNSELVISE.COM (IT) 7603 (ITAT-BANGALORE)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
7 month(s) 15 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
08-09-2017
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
A
Assessment Year
2012-2013
Appeal Filed On
24-01-2017
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI MANJUNATHA G, ACCOUNTANT MEMBER ITA NO.179/BANG/2017 ASSESSMENT YEAR : 2012-13 THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 5(1)(2), BANGALORE. VS. M/S. PNB METLIFE INDIA INSURANCE COMPANY LTD., # 5, BRIGADE SESHAMAHAL, VANI VILAS ROAD, BASAVANGUDI, BANGALORE 560 004. PAN: AACCM 6448H APPELLANT RESPONDENT APPELLANT BY : SHRI G.R. REDDY, CIT-I(DR)(ITAT), BENGALURU RESPONDENT BY : SHRI CHAVALI NARAYAN, CA DATE OF HEARING : 07.09.2017 DATE OF PRONOUNCEMENT : 08.09.2017 O R D E R PER MANJUNATHA G., ACCOUNTANT MEMBER THIS APPEAL FILED BY THE REVENUE IS DIRECTED AG AINST THE ORDER OF THE CIT(APPEALS)-5, BENGALURU DATED 24.10.2016 AND IT P ERTAINS TO ASSESSMENT YEAR 2012-13. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE, M/S. PNB METLIFE INDIA INSURANCE CO. LTD. ENGAGED IN THE BUSINESS OF LIFE INSURANCE HAS FILED ITS RETURN OF INCOME FOR THE AY 2012-13 ON 27.09.20 12 DECLARING NIL TOTAL ITA NO.179/BANG/2017 PAGE 2 OF 4 INCOME. THE CASE HAS BEEN SELECTED FOR SCRUTINY AND ACCORDINGLY NOTICES U/S. 143(2) & 142(1) OF THE INCOME-TAX ACT, 1961 [ THE ACT] WERE ISSUED. IN RESPONSE TO THE NOTICES, THE AR OF THE ASSESSEE APPEARED FROM TIME TO TIME AND SUBMITTED DETAILS AS CALLED FOR. THE ASSE SSMENT WAS COMPLETED U/S. 143(3) DETERMINING THE TOTAL INCOME OF RS.9,37 ,44,900 WHEREIN THE AO HAS DENIED THE BENEFIT OF AGGREGATION OF SURPLUS/DE FICIT AS PER POLICY HOLDERS ACCOUNT TO SURPLUS/DEFICIT AS PER SHAREHOLD ERS ACCOUNT. AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(APPEALS). 3. BEFORE THE CIT(APPEALS), THE ASSESSEE SUBMITTED THAT AS PER THE PROVISIONS OF SECTION 44 OF THE ACT, FOR THE PURPOS E OF COMPUTING INCOME FROM LIFE INSURANCE BUSINESS, THE ASSESSEE CAN AGGR EGATE ITS SURPLUS/DEFICIT FROM POLICY HOLDERS ACCOUNT TO SURPLUS/DEFICIT OF T HE SHAREHOLDERS ACCOUNT. THE ASSESSEE FURTHER CONTENDED THAT SIMILAR ISSUE H AS BEEN CONSIDERED BY THE JURISDICTIONAL TRIBUNAL IN ASSESSEES OWN CASE FOR THE AY 2011-12 IN ITA NO.1508/B/15 DATED 22.09.2016 WHEREIN THE TRIBUNAL HAS ALLOWED THE BENEFIT OF AGGREGATION OF INCOME FOR THE PURPOSE OF COMPUTATION OF INCOME FROM LIFE INSURANCE BUSINESS. THE CIT(APPEALS) AFT ER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND ALSO RELYING UPON T HE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR AY 2011-12 IN I TA NO.1508/B/2015 ALLOWED THE APPEAL FILED BY THE ASSESSEE. AGGRIEVE D BY THE CIT(APPEALS) ORDER, THE REVENUE IS IN APPEAL BEFORE US. ITA NO.179/BANG/2017 PAGE 3 OF 4 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL AVAILABLE ON RECORD. THE ONLY ISSUE THAT CAME UP FOR OUR CON SIDERATION IS THAT AS PER THE PROVISIONS OF SECTION 44 OF THE ACT, FOR THE PU RPOSE OF COMPUTATION OF INCOME FROM BUSINESS OF LIFE INSURANCE, CAN THE ASS ESSEE AGGREGATE SURPLUS/DEFICIT FROM POLICY HOLDERS ACCOUNT TO SURP LUS/DEFICIT OF THE SHAREHOLDERS ACCOUNT. WE FIND THAT THE COORDINATE BENCH OF THIS TRIBUNAL HAS CONSIDERED A SIMILAR ISSUE IN ASSESSEES OWN CA SE FOR THE AY 2011-12 IN ITA NO.1508/B/2015 WHEREIN IT WAS OBSERVED THAT SURPLUS/DEFICIT FROM SHAREHOLDERS ACCOUNT SHOULD BE AGGREGATED WITH SURP LUS/DEFICIT OF THE POLICY HOLDERS ACCOUNT FOR DETERMINING THE PROFIT/L OSS OF THE ASSESSEE U/S. 44 OF THE ACT. THE RELEVANT PORTION OF THE ORDER OF THE TRIBUNAL IS REPRODUCED HEREUNDER:- 8. AS REGARDS GROUNDS 9 TO 13, WE FIND THAT THEY A RE ALTERNATE GROUNDS. IF THE DEFICITS IN THE POLICY HOLDERS ACC OUNT IS TO BE SET OFF AGAINST THE SURPLUS AS PER SHAREHOLDERS ACCOUNT IN COMPUTING THE TAXABLE INCOME OF THE ASSESSEE U/S. 44 OF THE I T ACT, THE ASSESSEE CONTENDS (I) DEFICIT IN THE POLICY HOLDERS ACCOUNT SHOULD BE SET OFF AGAINST THE SURPLUS AS PER SHAREHOLDERS ACCOUNT U/S 70 OF THE IT ACT AS BOTH CONSTITUTES A SINGLE BUSINESS AND SEC. 70 PERMITS INTER UNIT SET OFF AND (II) THE LOSS OF THE BUSINESS OF ASSESSEE AS DETERMINED AT RS.1745.61 CRORES FOR EAR LIER YEARS SHOULD BE CARRIED FORWARD AND SET OFF AGAINST THE B USINESS INCOME OF THE CURRENT YEAR. AS WE HAVE HELD THAT SURPLUS/ DEFICIT AS PER SHAREHOLDERS ACCOUNT SHOULD BE AGGREGATED WITH SURP LUS/DEFICIT IN THE POLICY HOLDERS ACCOUNT FOR DETERMINING THE PROF IT/LOSS OF THE ASSESSEE U/S 44, AND SUCH AGGREGATION WOULD RESULTS IN A LOSS OF RS.34,45,94,000/- AS PER THE IMPUGNED ORDER, THE VI EW OF SETTING OFF OF LOSSES AGAINST INCOME U/S. 70,72 WOULD BE AC ADEMIC AND HENCE NOT DECIDED. ITA NO.179/BANG/2017 PAGE 4 OF 4 5. IN THIS VIEW OF THE MATTER AND ALSO RESPECTFULLY FOLLOWING THE DECISION OF THE COORDINATE BENCH OF THIS TRIBUNAL IN ASSESSE ES OWN CASE FOR AY 2011-12, WE ARE OF THE VIEW THAT SURPLUS/DEFICIT AS PER SHAREHOLDERS ACCOUNT MAY BE AGGREGATED WITH SURPLUS/DEFICIT OF T HE POLICY HOLDERS ACCOUNT FOR DETERMINING THE INCOME OF THE ASSESSEE U/S. 44 OF THE ACT. THE CIT(APPEALS) AFTER CONSIDERING THE RELEVANT PROVISI ONS OF THE ACT HAS RIGHTLY DELETED THE ADDITION MADE BY THE AO. WE DO NOT FIN D ANY ERROR OR INFIRMITY IN THE ORDER OF CIT(APPEALS). HENCE, WE ARE INCLIN ED TO UPHOLD THE CIT(APPEALS) ORDER AND DISMISS THE APPEAL FILED BY THE REVENUE. 6. IN THE RESULT, THE APPEAL BY THE REVENUE IS DISM ISSED. PRONOUNCED IN THE OPEN COURT ON THIS 8 TH DAY OF SEPTEMBER, 2017. SD/- SD/- ( VIJAY PAL RAO ) ( MANJUNATHA G .) JUDICIAL MEMBER A CCOUNTANT MEMBER BANGALORE, DATED, THE 8 TH SEPTEMBER, 2017. / D ESAI S MURTHY / COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY ITAT, BANGALORE.
