A.C.I.T., Circle - 6(2), Kolkata , Kolkata V. M/s. National Insurance Company Limited , Kolkata

ITA 2383/KOL/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 0523 (ITAT-KOLKATA)
• Duration Of Justice: 9 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-09-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 24-11-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K TIWARI
• Assessee Lawyers: S BHATTACHARY A
• Section: 115JB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH D, KOLKATA BEFORE SH. J.SUDHAKAR REDDY, ACCOUNTANT MEMBER AND SH. S.S.VISWANETHRA RAVI, JUDICIAL MEMBER ITA NO.2383/KOL/2017 [ASSESSMENT YEAR: 2012-13] APPELLANT BY SH. A.K.TIWARI, CIT DR RESPONDENT BY SH. S.BHATTACHARYA, FCA DATE OF HEARING 04.09.2018 DATE OF PRONOUNCEMENT 12.09.2018 ORDER PER S.S. VISWANETHRA RAVI, JUDICIAL MEMBER THIS APPEAL FILED BY THE REVENUE AGAINST THE ORDER DATED 08.09.2017 PASSED BY CIT(A)-6, KOLKATA FOR AY 2012-13. 2. GROUND NO.1 RAISED BY THE REVENUE READS AS UNDER:- 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) HAS ERRED IN HOLDING THE SUM OF RS.879,31,62,000/- BEING THE RESERVE CREATED FOR UNEXPIRED RISK SHOULD BE CONSIDERED AS RESERVE FOR COMPUTING THE BOOK PROFIT UNDER SECTION 115JB. 2.1. THE ISSUE RAISED BY THE REVENUE IS COVERED BY THE ORDER DATED 05.08.2016 IN ASSESSEES OWN CASE FOR AYS 2005-06, 2007-08 & 2008-09 PASSED BY THIS TRIBUNAL. IT IS NOTED THAT LD.CIT(A) BY PLACING RELIANCE TO THE SAID ORDER DELETED THE ADDITION MADE BY THE AO ON ACCOUNT OF RESERVE CREATED FOR UNEXPIRED RISK. THE RELEVANT PORTION AT PARA NO.8.1 IS REPRODUCED HEREIN BELOW:- ACIT, CIRCLE-6(2), AAYAKAR BHAWAN, 6 TH FLOOR, ROOM NO.6/15, P-7, CHOWRINGHEE SQUARE, KOLKATA-700069. VS M/S. NATIONAL INSURANCE COMPANY LIMITED, 3, MIDDLETON STREET, KOLKATA-700071. PAN-AAACN9967E (APPELLANT) (RESPONDENT) ITA NO.2383/KOL/2017 [ASSESSMENT YEAR: 2012-13] PAGE | 2 8.1. I HAVE EXAMINED THE CONTENTION OF THE A/ R OF THE APPELLANT AND FIND MERITS IN HIS ARGUMENTS. IN APPELLANT'S OWN CASE FOR A.Y. 2005-06, 2007-08 AND 2008-09 AT ITA NO.674, 982 AND 983 THE HON'BLE ITAT, KOLKATA IN ORDER DT. 05/08/2016 AT PARA 11 HAS ADJUDICATED IN FAVOUR OF THE APPELLANT AND THE JUDGEMENT IS AT PARA 11.4 WHICH STATES AS BELOW:- 11.4. WE HAVE HEARD THE RIVAL SUBMISSION. WE FIND THAT THE LD. CITA HAD DEALT THIS ISSUE VERY ELABORATELY AND HAD GIVEN PROPER FINDING THAT THE RESERVE CREATED FOR UNEXPIRED RISK NEED NOT BE ADDED BACK FOR THE PURPOSE OF COMPUTATION OR BOOK PROFIT U/S 115JB OF THE ACT. THE REVENUE WAS NOT ABLE TO CONTROVERT THE FINDINGS OR THE ID. CITA BEFORE US. HENCE WE FIND NO INFIRMITY IN THE ORDER PASSED BY THE ID. CITA IN THIS REGARD. ACCORDINGLY, THE GROUND NO.4 RAISED BY THE REVENUE FOR A. Y.2008-09 IS DISMISSED.' HUMBLY, FOLLOWING THE DECISION OF JURISDICTIONAL TRIBUNAL, I AM OF THE VIEW THAT WHILE CALCULATING BOOK PROFIT U/ S 115JB THE A.O. SHOULD NOT HAVE ADDED BACK A SUM OF RS.879,31,62,000/- BEING RESERVE CREATED FOR UNEXPIRED RISK. THE APPEAL OF THE APPELLANT AT GROUNDS NOS. 7 AND 8 ARE AL1OWED. 3. IN VIEW OF THE ABOVE, WE FIND NO INFIRMITY IN THE ORDER OF LD. CIT(A) AND IT IS JUSTIFIED. GROUND NO.1 RAISED BY THE REVENUE IS DISMISSED. 4. GROUND NO.2 RAISED BY THE REVENUE READS AS UNDER:- 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) HAS ERRED IN HOLDING THAT AMORTIZATION OF PREMIUM OF RS.4,82,11,000/- PAID ON PURCHASE OF INVESTMENT SHOULD BE ALLOWED, THOUGH THE ACT DOES NOT ALLOW THE SAME. 4.1. THE AO DISALLOWED THE CLAIM OF AMORTIZATION OF PREMIUM PAID ON INVESTMENT AMOUNTING TO RS.4,82,11,000/-. LD.CIT(A) BY PLACING RELIANCE IN ASSESSEES OWN CASE FOR AY 2007-08 & 2008-09, DELETED THE SAID DISALLOWANCE. THE RELEVANT PORTION IS REPRODUCED HEREUNDER:- 6.1. DURING THE APPELLATE PROCEEDINGS, THE AR OF THE APPELLANT SUBMITTED AS BELOW:- ITA NO.2383/KOL/2017 [ASSESSMENT YEAR: 2012-13] PAGE | 3 THIS GROUND RELATES TO THE DISALLOWANCES OF RS. 4,82,11,000 BEING AMORTIZATION OF PREMIUM PAID ON INVESTMENTS. THE APPELLANT ALREADY SUBMITTED THAT FOR THE EARLIER ASSESSMENT YEARS VIZ., 2007-08, 2008-09, 2010- 11 AND 2011-12 THE CIT(APPEALS) HAD HELD THAT THERE COULD NOT BE ANY DISALLOWANCE OF PREMIUM PAID ON INVESTMENTS AND ACCORDINGLY THE DISALLOWANCES MADE BY THE ASSESSING OFFICER WERE DELETED. COPIES OF THE APPELLATE ORDERS DATED 29/03/2012 AND 17/03/2015 FOR THE ASSESSMENT YEARS 2008-09 AND 2011-12 RESPECTIVELY WERE ALREADY SUBMITTED. THE APPELLANT NOW SUBMITS THAT MEANWHILE IN RELATION TO THE ASSESSMENT YEARS 2007-08 AND 2008-09. THE ITAT VIDE ITS ORDER DATED 05/08/2016 (PAGES 11 TO 13) UPHELD THE DECISION OF THE CIT(A) IN DELETING THE DISALLOWANCES MADE OF AMORTIZATION OF PREMIUM PAID ON INVESTMENTS AND CONSEQUENTLY THE REVENUE APPEAL WAS DISMISSED. A COPY OF THE ABOVE- MENTIONED ORDER DATED 05/08/2016 OF THE ITAT IS ENCLOSED FOR READY REFERENCE. THE APPELLANT SUBMITS THAT FOLLOWING THE ABOVE-MENTIONED ORDER OF THE ITAT, THE OF RS.4,82,11,000 IN RELATION TO THE AMORTIZATION OF PREMIUM PAID ON INVESTMENTS, MAY KINDLY BE DELETED. 6.2. THE ITAT, KOLKATA IN APPELLANT'S OWN CASE FOR A.Y. 2005-06, 2007-08 AND 2008-09 AT ITA NO.674, 982 &, 983 DT.05/08/2016 ON PAGE 11 TO 13 HAS DECIDED THIS ISSUE IN FAVOUR OF THE APPELLANT AND ALLOWED THE CLAIM OF THE APPELLANT OF AMORTIZATION OF PREMIUM PAID ON INVESTMENT IN THESE YEARS. HUMBLY, FOLLOWING THE DECISION OF THE JURISDICTIONAL TRIBUNAL, I ALLOW THE CLAIM OR AMORTIZATION OF PREMIUM PAID ON INVESTMENT AMOUNTING TO RS.4,82,11,000/-. GROUND NO.4 OF THE APPEAL IS ALLOWED AND ADDITION OF RS.4,82,11,000/- MADE BY THE A.O. IS DELETED. 5. IN VIEW OF THE ABOVE, WE FIND NO INFIRMITY IN THE ORDER OF LD.CIT(A) AND IT IS JUSTIFIED. 6. GROUND NO.3 RAISED BY THE REVENUE READS AS UNDER:- 3. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) HAS ERRED IN HOLDING THAT WRITTEN OFF DEPRECIATED INVESTMENTS OF RS.2,23,41,000/- SHOULD BE ALLOWED AS DEDUCTION THOUGH THE ACT DOES NOT ALLOW THE SAME. ITA NO.2383/KOL/2017 [ASSESSMENT YEAR: 2012-13] PAGE | 4 6.1. IT IS NOTED THAT THE ASSESSEE CLAIMED WRITTEN OFF DEPRECIATED INVESTMENT OF RS.2,23,41,000/-. THE AO DISALLOWED THE SAME. LD.CIT(A) BY PLACING RELIANCE ON THE ORDER DATED 05.08.2016 IN ASSESSEES OWN CASE FOR AYS 2005-06, 2007-08 & 2008-09 PASSED BY THIS TRIBUNAL. THE RELEVANT PORTION IS REPRODUCED HEREUNDER:- 5.1. DURING THE APPELLATE PROCEEDINGS, THE AR OF THE APPELLANT SUBMITTED AS BELOW:- THIS GROUND RELATES TO THE DISALLOWANCE MADE BY THE ASSESSING OFFICER OF RS.2,23,41,000 BEING THE DEPRECIATED INVESTMENTS WRITTEN OFF DURING THE YEAR. IT WAS ALREADY SUBMITTED THAT ON THIS ISSUE IN RESPECT OF THE EARLIER ASSESSMENT YEARS VIZ.2000-01, 2002-03, 2003-04, 2004-05, 2007-08, 2008- 09, 2010-11 AND 2011-12, THE CIT(APPEALS) HAD HELD THAT THERE COULD NOT BE ANY DISALLOWANCE OF THE AMOUNT WRITTEN OFF OUT OF INVESTMENTS AND CONSEQUENTLY, THE DISALLOWANCES MADE BY THE ASSESSING OFFICER FOR THOSE YEARS WERE DELETED. THE APPELLANT ALREADY SUBMITTED THE COPIES OF THE APPELLATE ORDERS DATED 29/03/2012 AND 17/03/2015 FOR THE ASSESSMENT YEARS 2008- 09 AND 2011-12 RESPECTIVELY. THE APPELLANT NOW SUBMITS THAT MEANWHILE THE HON'BLE INCOME-TAX APPELLATE TRIBUNAL A' BENCH; KOLKATA (ITAT) VIDE ITS ORDER DATED 05/08/2016 (PAGES 13 TO 16), UPHELD THE DECISION OF THE CIT(APPEALS) IN DELETING THE DISALLOWANCES AND DISMISSED THE REVENUE APPEAL ON THIS ISSUE IN RELATION TO THE ASSESSMENT YEARS 2007-08 AND 2008-09. A COPY OF THE ABOVE-MENTIONED ORDER DATED 05/08/2016 OF THE ITAT IS ENCLOSED FOR READY REFERENCE. ON THE BASIS OF THE ABOVE DECISION OF THE ITAT, THE APPELLANT SUBMITS THAT THE DISALLOWANCE OF RS.2,23,41,000 IN RELATION TO THE INVESTMENTS WRITTEN OFF MAY KINDLY BE DELETED. 5.2. ITAT, KOLKATA IN APPELLANT'S OWN CASE FOR A.Y. 2005-6, 2007-08 AND 2008-09 AT ITA NO.674, 982 & 983 DT.05/08/2016 ON PAGES 13 TO 16 HAS DECIDED THIS ISSUE IN FAVOUR OF THE APPELLANT AND ALLOWED WRITE OFF CLAIM OF THE APPELLANT IN THESE YEARS. HUMBLY, FOLLOWING THE DECISION OF JURISDICTIONAL TRIBUNAL, I ALLOW THE CLAIM OF WRITE OFF OF RS.2,23,41,000/ - MADE BY THE APPELLANT. GROUND NO. 3 IS ALLOWED AND ADDITION OF RS.2,23,41,000/- MADE BY THE A.O. IS DELETED. ITA NO.2383/KOL/2017 [ASSESSMENT YEAR: 2012-13] PAGE | 5 7. IN VIEW OF THE ABOVE, WE FIND NO INFIRMITY IN THE ORDER OF LD.CIT(A) AND IT IS JUSTIFIED. 8. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 12.09.2018. SD/- SD/- (J.SUDHAKAR REDDY) (S.S.VISWANETHRA RAVI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATE:-12.09.2018 *AMIT KUMAR* COPY FORWARDED TO: 1. APPELLANT- ACIT, CIRCLE-6(2), AAYAKAR BHAWAN, 6 TH FLOOR, ROOM NO.6/15, P-7, CHOWRINGHEE SQUARE, KOLKATA-700069. 2. RESPONDENT- M/S. NATIONAL INSURANCE COMPANY LIMITED, 3, MIDDLETON STREET, KOLKATA-700071. 3. CIT-KOLKATA 4. CIT(APPEALS)-KOLKATA 5. DR: ITAT -KOLKATA BENCHES SR.P.S./H.O.O ITAT, KOLKATA