ICICI LOMBARD GENERAL INSURANCE CO. LTD, MUMBAI V. ACIT RG 10(1), MUMBAI

ITA 2398/MUM/2009

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 8597 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 5 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-10-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: I
• Next Hearing Date: 20-09-2012
• Assessment Year: 2003-2004
• Appeal Filed On: 15-04-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Rule of consistency
• Section: 43B; 115JB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI I BENCH MUMBAI BENCHES, MUMBAI BEFORE SHRI RAJENDRA SINGH, AM & SHRI VIJAY PAL RA O, JM ITA NO. 2398/MUM/2009 (ASST YEA 2003-04 ) ICICI LOMBARD GENERAL INSURANCE CO LTD ZENITH HOUSE 2 ND FLOOR KESHAVRAO KHADE MARG OPP RACE COURSE, MAHALAXMI MUMBAI 34 VS THE ASSTT COMMR OF INCOME TAX RANGE 10(1), MUMBAI (APPELLANT) (RESPONDENT) PAN NO. AAACI7904G ASSESSEE BY MS ARATI VISSANJI REVENUE BY SH PRITAM SINGH DT.OF HEARING 24 TH SEPT 2012 DT OF PRONOUNCEMENT 10 TH OCT 2012 PER VIJAY PAL RAO, JM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 12.1.2009 OF THE COMMISSIONER OF INCOME TAX(APPEALS) FOR THE ASS ESSMENT YEAR 2003-04. 2 THE ONLY GROUND RAISED BY THE ASSESSEE IN THIS AP PEAL IS AS UNDER: ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE LAW, THE COMMISSIONER OF INCOME TAX(APPEALS) ERRED IN CONFIRMING THE DISAL LOWANCE IN RESPECT OF THE DEDUCTION FOR GAINS ON SALE OF INVESTMENT AMOUNTING TO ` 3,49,46,887/- ON THE GROUND THAT PROFITS FROM INSURANCE BUSINESS ARE TO BE TAKEN TO BE BALANCE OF THE PROFITS AS DISCLOSED BY ANNUAL ACCOUNTS, SUBJECT TO THE ADJUSTMENTS PROVIDED IN CLAUSE 5(A) TO (C) AND IT IS NOT OPEN T O THE APPELLANT TO REDUCE THESE PROFITS FROM ITS COMPUTATION OF INCOME NON OBST INATE CL. B OF RULE 5 OF THE FIRST SCHEDULE. 3 THE ASSESSEE IS ENGAGED IN THE GENERAL INSURANCE BUSINESS. IN THE COMPUTATION OF INCOME, THE ASSESSEE HAS REDUCED THE GAIN ON SALE OF INVESTMENT AMOUNTING TO ` 3,49 CRORES WHILE CALCULATING THE PROFIT OR LOSS OF BUSINESS OR PROFESSION. ON A QUERY FROM THE ASSESSING OFFICER, THE ASSESSEE HAS CONTENDED THAT THE GAINS ON ITA NO.2398/M/09 ICICI LOMBARD GENERAL INSURANCE CO LTD 2 SALE OF INVESTMENT AMOUNTING TO ` 3.49 CRORES IS EXEMPT FROM TAX IN VIEW OF CIRCULAR NO.528 DATED 16.12.1998 ISSUED BY CBDT. IT WAS FUR THER SUBMITTED THAT AS PER SECTION 44 OF THE ACT, THE PROFITS AND GAINS FOR INSURANCE BUSINESS SHALL BE COMPUTED IN ACCORDANCE WITH THE RULES CONTAINED IN THE FIRST SC HEDULE TO THE ACT AND THE PROFIT FROM THE INSURANCE BUSINESS SHALL BE TAKEN TO BE TH E BALANCE OF THE PROFITS AS DISCLOSED BY ANNUAL ACCOUNT, WHICH ARE REQUIRED UND ER THE INSURANCE ACT, 1938 TO BE FURNISHED TO THE INSURANCE AUTHORITIES, SUBJECT TO THE ADJUSTMENTS PROVIDED IN CLAUSE 5(A) TO (C) . CLAUSE 5(B) WHICH PROVIDED FOR ADJUSTMENT, INTER ALIA, FOR PROFIT OR LOSS ON THE REALIZATION OF INVESTMENTS, HAS BEEN DE LETED BY THE FINANCE ACT, 1988 AND AS PER EXPLANATORY NOTES; THE AFORESAID AMENDME NT WAS MADE TO ENABLE THE GENERAL INSURANCE COMPANIES TO PLAY A MORE ACTIVE R OLE IN CAPITAL MARKETS FOR THE BENEFIT OF THE POLICY HOLDERS. THUS, THE ASSESSEE CONTENDED THAT THE AMENDMENT IS MADE TO PROVIDE FOR EXEMPTION OF THE PROFITS EARNED BY THE GENERAL INSURANCE COMPANIES ON THE REALIZATION OF THE INVESTMENT AN D AS A COROLLARY LOSSES INCURRED ON REALIZATION OF INVESTMENT WOULD NOT BE ALLOWED A S DEDUCTION IN COMPUTING PROFITS CHARGEABLE TO TAX. 3.1 THE ASSESSING OFFICER, HOWEVER, DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE AND HELD THAT PROVISIONS OF SEC. 44 A DID NOT PROVI DE FOR ANY PROFIT/GAIN ON SALE OF INVESTMENT TO BE REDUCED WHILE COMPUTING THE PROFIT S AND GAIN OF ANY BUSINESS OF INSURANCE. THE ASSESSING OFFICER WAS OF THE VIEW T HAT CIRCULAR 525 DOES NOT SEEK TO OVERRIDE THE PROVISIONS OF SEC. 44 AND RULE 5 OF TH E FIRST SCHEDULE. 3.2 ON APPEAL, THE COMMISSIONER OF INCOME TAX(APPEA LS) HAS CONFIRMED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER ON THIS ACCOUNT. 4 BEFORE US, THE LD AR OF THE ASSESSEE HAS SUBMITTE D THAT THIS ISSUE HAS BEEN CONSIDERED AND DECIDED BY THIS TRIBUNAL IN A SERIES OF DECISIONS WHEREIN IT HAS BEEN ITA NO.2398/M/09 ICICI LOMBARD GENERAL INSURANCE CO LTD 3 HELD THAT PROFIT ON SALE OF INVESTMENTS PRIOR TO AS SESSMENT YEAR 2011 IS NOT TAXABLE IN THE HANDS OF THE GENERAL INSURANCE COMPANIES. THE LD AR HAS POINTED OUT THAT THE TRIBUNAL HAS REPEATEDLY TAKEN NOTE THAT THE DELETI ON OF SUB. RULE (B) OF RULE 5 OF FIRST SCHEDULE WAS WITH SPECIFIC PURPOSE OF GRANTING EXE MPTION ON THE PROFIT ON SALE OF INVESTMENTS AND THAT IS WHY THE LEGISLATURE HAS NOW BOUGHT IN A PROSPECTIVE AMENDMENT FROM ASSESSMENT YEAR 2011-12, WHEREBY INS ERTED RULE 5(B)(I) OF FIRST SCHEDULE OF THE I T ACT. BY VIRTUE OF THIS AMENDME NT, THE PROFIT ON SALE OF INVESTMENTS IN THE CASE OF THE INSURANCE COMPANIES WILL BE TAXA BLE W.E.F AY2011-12. THE LD AR HAS RELIED UPON THE FOLLOWING DECISIONS: ITA NO.2398/M/09 ICICI LOMBARD GENERAL INSURANCE CO LTD 4 4.1 THE LD AR HAS FURTHER POINTED OUT THAT THE CIRC ULAR NO.528 DT 16.12.1988 OF THE CBDT ISSUED AS A EXPLANATORY NOTE ON THE FINANCE AC T 1988 WHEREBY THE SUB RULE (B) OF RULE 5 OF FIRST SCHEDULE HAS BEEN DELETED AND IT HAS BEEN EXPLAINED TO ENABLE THE GENERAL INSURANCE COMPANIES AND ITS SUBSIDIARIES TO PLAY A MORE ACTIVE ROLE IN CAPITAL MARKETS FOR THE BENEFIT OF POLICY HOLDERS. THIS RULE HAS BEEN AMENDED FOR EXEMPTION OF THE PROFITS EARNED BY THEM ON THE SALE OF INVESTMENTS. 4.2 ON THE OTHER HAND, THE LD DR HAS SUBMITTED THAT THE ASSESSMENT OF THE INSURANCE COMPANIES HAS TO BE FRAMED AS PER THE PRO VISIONS OF SEC. 44 AND IN ACCORDANCE WITH THE FIRST SCHEDULE OF THE INSURANCE ACT. EVEN AFTER THE AMENDMENT WHEREBY THE SUB RULE (B) OF RULE 5 OF FIR ST SCHEDULE WAS REMOVED THE TOTAL INCOME OF THE ASSESSEE HAS TO BE COMPUTED AS PER THE EXISTING PROVISIONS. HE HAS SUBMITTED THAT SECTION 44 R.W. THE FIRST SCHEDU LE TO THE I T ACT PROVIDES THE SCHEME OF COMPUTATION OF INCOME OF INSURANCE COMPAN IES AND ACCORDING TO RULE 5 OF THE SAID SCHEDULE, THE INCOME OF NON-LIFE INSURA NCE BUSINESS IS TAKEN AS PROFIT BEFORE TAX AND APPROPRIATIONS AS PER THE PROFIT AND LOSS ACCOUNT OF THE COMPANY, PREPARED IN ACCORDANCE WITH THE REGULATIONS MADE BY THE INSURANCE REGULATORY DEVELOPMENT AUTHORITY (IRDA), SUBJECT TO CERTAIN AD JUSTMENTS. THE LD DR HAS FURTHER CONTENDED THAT WHEN THE ASSESSEE ITSELF HAS INCLU DED THE PROFIT ON SALE OF INVESTMENTS IN THE PROFITS & LOSS ACCOUNT, WHICH WE RE PREPARED IN ACCORDANCE WITH THE REGULATIONS MADE BY IRDA AND COPIES OF WHICH ARE REQUIRED UNDER THE INSURANCE ACT 1938 TO BE FURNISHED TO THE CONTROLLE R OF INSURANCE, THEN NO ADJUSTMENT CAN BE MADE IN THE SAID PROFITS AS SHOWN BY THE ASSESSEE IN THE P&L ACCOUNT. 4.3 THE LD DR HAS FURTHER CONTENDED THAT THE AMENDM ENT IN THE ACT HAS BEEN MADE IN CONSONANCE WITH THE AMENDMENT IN THE INSURA NCE ACT WHEREBY GENERAL ITA NO.2398/M/09 ICICI LOMBARD GENERAL INSURANCE CO LTD 5 INSURANCE COMPANIES ARE REQUIRED TO INCLUDE CERTAIN INCOME IN THE P&L ACCOUNT PREPARED AS PER THE REGULATIONS FRAMED BY IRDA AND AS PER THE PROVISIONS OF INSURANCE ACT, COPIES OF THE ACCOUNTS ARE REQUIRED TO BE FURNISHED TO THE CONTROLLER OF INSURANCE. 4.4 THE LD DR HAS FURTHER CONTENDED THAT THE AMENDM ENT BY THE FINANCE ACT 1988 WAS MADE WHEREBY SUB. RULE (B) OF RULE 5 OF FI RST SCHEDULE HAS BEEN DELETED DUE TO THE REASONS BECAUSE CORRESPONDING AMENDMENT WAS ALSO MADE IN THE INSURANCE ACT WHEREBY THE INSURANCE COMPANIES HAS T O DECIDE TO INCLUDE THE INCOME ON SALE OF INVESTMENTS IN THE P&L ACCOUNT PR EPARED IN COMPLIANCE WITH THE INSURANCE ACT AND THEREFORE, ONCE THE PROFIT ON SAL E OF INVESTMENT IS INCLUDED IN THE P&L ACCOUNT PREPARED AS PER THE INSURANCE ACT AND C OPY OF WHICH IS REQUIRED TO BE FURNISHED TO THE CONTROLLER OF INSURANCE, THEN N O ADJUSTMENT IS REQUIRED TO BE MADE AS PER THE PROVISIONS OF SEC. 44 R.W. FIRST S CHEDULE OF INCOME TAX ACT. THUS, THE LD DR HAS SUBMITTED THAT AS PER RULE 5 OF FIRST SCHEDULE, THE PROFIT AND GAIN OF GENERAL INSURANCE SHALL BE TAKEN TO BE THE BALANCE OF THE PROFIT DISCLOSED BY ANNUAL ACCOUNT AND NO FURTHER ADJUSTMENT IS PERMITTED. ON CE THE ASSESSEE HAS INCLUDED THE PROFIT ON SALE OF INVESTMENTS IN THE ANNUAL ACC OUNT PREPARED AS PER THE REGULATIONS MADE BY IRDA AND COPIES OF WHICH ARE TO BE FURNISHED TO THE CONTROLLER OF INSURANCE, THEN FOR COMPUTATION OF INCOME U/S 44 OF THE I T ACT BY APPLYING RULE 5 OF FIRST SCHEDULE, THE AMOUNT OF PROFIT ON SALE OF INVESTMENT WILL BE INCLUDED IN THE TOTAL INCOME OF THE ASSESSEE. THE LD DR HAS FURTH ER SUBMITTED THAT AS PER THE CIRCULAR NO.525 DT 16.12.1988, THE AMENDMENT HAS BE EN BROUGHT WITH THE OBJECT TO ENABLE THE GENERAL INSURANCE COMPANY AND ITS SUBSID IARIES AND NOT FOR OTHER PRIVATE INSURANCE COMPANIES LIKE THE ASSESSEE. THEREFORE, THE SAID CIRCULAR CANNOT BE ITA NO.2398/M/09 ICICI LOMBARD GENERAL INSURANCE CO LTD 6 APPLIED IN THE CASE OF THE ASSESSEE. HE HAS RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 5 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS THE RELEVANT MATERIAL ON RECORD. THERE IS A SPECIAL PROVISION FOR COMPUTATI ON OF INCOME CHARGEABLE UNDER THE HEAD PROFITS AND GAIN INTER-ALIA IN THE BUSIN ESS OF INSURANCE UNDER SECTION 44 OF THE I T ACT AND THE SAME SHALL BE COMPUTED IN ACCOR DANCE WITH THE RULE CONTAINING IN FIRST SCHEDULE OF THE ACT. THE PROFITS AND GAIN S OF BUSINESS OF INSURANCE OTHER THAN THE LIFE INSURANCE SHALL BE COMPUTED AS PER RULE 5 OF FIRST SCHEDULE AS UNDER: 5. THE PROFITS AND GAINS OF ANY BUSINESS OF INSURANCE O THER THAN LIFE INSURANCE SHALL BE TAKEN TO BE THE PROFIT BEFORE TAX A ND APPROPRIATIONS AS DISCLOSED IN THE PROFIT AND LOSS ACCOUNT PREPARED I N ACCORDANCE WITH THE PROVISIONS OF THE INSURANCE ACT, 1938 (4 OF 1938) OR THE RULES MADE THEREUNDER OR THE PROVISIONS OF THE INSURANCE REG ULATORY AND DEVELOPMENT AUTHORITY ACT, 1999 (4 OF 1999) OR THE RE GULATIONS MADE THEREUNDER, SUBJECT TO THE FOLLOWING ADJUSTMENTS; A. SUBJECT TO THE OTHER PROVISIONS OF THIS RULE, ANY E XPENDITURE OR ALLOWANCE INCLUDING ANY AMOUNT DEBITED TO THE PROFI T AND LOSS ACCOUNT EITHER BY WAY OF A PROVISION FOR ANY TAX, DIV IDEND, RESERVE OR ANY OTHER PROVISION AS MAY BE PRESCRIBED WHICH IS NO T ADMISSIBLE UNDER THE PROVISIONS OF SECTIONS 30 TO 43B IN COMPUT ING THE PROFITS AND GAINS OF A BUSINESS SHALL BE ADDED BACK; B. (I) ANY GAIN OR LOSS ON REALISATION OF INVESTMENTS SH ALL BE ADDED OR DEDUCTED, AS THE CASE MAY BE, IF SUCH GAIN OR LOSS I S NOT CREDITED OR DEBITED TO THE PROFIT AND LOSS ACCOUNT; (II) ANY PROVISION FOR DIMINUTION IN THE VALUE OF INV ESTMENT DEBITED TO THE PROFIT AND LOSS ACCOUNT, SHALL BE ADDED BACK; C. SUCH AMOUNT CARRIED OVER TO A RESERVE FOR UNEXPIRED RI SKS AS MAY BE PRESCRIBED IN THIS BEHALF SHALL BE ALLOWED AS A DEDUCTION. 5.1 THE BARE READING OF THE AMENDED PROVISIONS OF RULE 5 OF FIRST SCHEDULE MAKES IT CLEAR THAT THE PROFITS AND GAINS SHALL BE TAKEN TO BE THE PROFIT BEFORE THE TAX AND APPROPRIATELY DISCLOSED IN THE P&L ACCOUNT PREPARED IN ACCORDANCE WITH THE INSURANCE ACT, 1938 OR THE RULE MADE THEREUNDER OR THE PROVISIONS OF IRDA ACT. THERE IS NO DISPUTE THAT THE ASSESSEE BEFORE US HAS INCLUDED THE PROFIT ON SALE OF ITA NO.2398/M/09 ICICI LOMBARD GENERAL INSURANCE CO LTD 7 INVESTMENTS IN THE PROFIT AND GAIN AS DECLARED IN T HE ACCOUNTS PREPARED IN ACCORDANCE WITH THE PROVISIONS OF INSURANCE ACT 193 8. IT IS ALSO NOT THE CASE OF THE ASSESSEE THAT THE PROFITS/GAINS ON SALE OF INVESTME NTS IS NOT REQUIRED TO BE INCLUDED IN THE P&L ACCOUNT PREPARED IN ACCORDANCE WITH THE PRO VISIONS OF INSURANCE ACT. THEREFORE, ONCE THE PROFIT ON SALE OF INVESTMENT IS REQUIRED TO BE INCLUDED IN THE P& L ACCOUNT IN ACCORDANCE WITH THE PROVISIONS OF INSURA NCE ACT, THEN AS PER THE RULE 5 OF FIRST SCHEDULE OF THE I T ACT, NO ADJUSTMENT IS REQUIRED TO BE MADE ON ACCOUNT OF THE AMOUNT OF PROFITS ON SALE OF INVESTMENT ALREADY INCLUDED IN THE P&L ACCOUNT. THUS, WE FIND FORCE AND SUBSTANCE IN THE CONTENTION OF THE LD DR THAT ONCE THE ASSESSEE HAS INCLUDED THE GAIN ON SALE OF INVESTMEN TS IN THE P&L ACCOUNT PREPARED AS PER THE PROVISIONS OF THE INSURANCE ACT, 1938, T HEN THE SAID AMOUNT CANNOT BE REDUCED WHILE COMPUTING THE INCOME AS PER PROVISION S OF SEC. 44 R.W FIRST SCHEDULE OF THE I T ACT. 5.2 HOWEVER, IN THE SERIES OF DECISIONS OF THE TRI BUNAL A VIEW HAS BEEN TAKEN THAT THE AMENDMENT VIDE FINANCE ACT 1988 W.E.F 1.4.89, T HE SUB RULE (B) OF RULE 5 OF FIRST SCHEDULE WAS OMITTED WITH THE PURPOSE TO GRAND EXEM PTION TO THE INSURANCE COMPANIES WITH REGARD TO THE PROFIT ON SALE OF INVE STMENTS. THE TRIBUNAL HAS TAKEN NOTE OF THE FACT THAT IN THE COROLLARY, IT HAS BEEN PROVIDED IN THE CIRCULAR NO.528 DATED 16.12.1988 THAT THE LOSS INCURRED BY THE GENE RAL INSURANCE COMPANIES ON REALIZATION OF INVESTMENT SHALL NOT BE ALLOWED AS D EDUCTION IN COMPUTING THE PROFIT CHARGEABLE TO TAX. 5.3 IN THE LATEST DECISION DATED 22.10.2010, THIS T RIBUNAL IN THE CASE OF TATA AIG GENERAL INSURANCE CO LTD VS ACIT IN ITA NO.2597/MU M/2009 AFTER CONSIDERING THE EARLIER DECISIONS OF THE TRIBUNAL HAS HELD IN PARAS 18 TO 20 AS UNDER: ITA NO.2398/M/09 ICICI LOMBARD GENERAL INSURANCE CO LTD 8 18. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENT IONS. THERE IS NO DISPUTE THAT UNDER THE GUIDELINES ISSUED BY THE IRDA (AUDITO RS REPORT) REGULATIONS OF 2002, FOR PREPARATION OF FINANCIAL STATEMENTS, THE P ROFIT ON SALE OF INVESTMENTS IS TO BE CREDITED TO THE PROFIT AND LOSS ACCOUNT OF THE INSURANCE COMPANY. THERE IS ALSO NO DISPUTE THAT THE ASSESSEE HAS CREDIT ED THE PROFIT AND LOSS ACCOUNT WITH SUCH PROFIT THE QUESTION IS WHETHER SU CH PROFIT CAN BE EXCLUDED AND EXEMPTION CAN BE CLAIMED. RULE 5(B), AS IT STOO D BEFORE BEING OMITTED FROM 01 .04.1989, WAS AS FOLLOWS: - ANY AMOUNT EITHER WRITTEN OFF OR RESERVED IN THE ACCO UNTS TO MEET DEPREDATION OF OR LOSS ON THE REALIZATION OF INVESTME NTS SHALL BE ALLOWED AS A DEDUCTION, AND ANY SUMS TAKEN CREDIT FO R IN THE ACCOUNTS ON ACCOUNT OF APPRECIATION OF OR GAINS ON THE REALI ZATION OF INVESTMENTS SHALL BE TREATED AS PART OF THE PROFITS AND GAINS; PROVIDED THAT THE ASSESSING OFFICER IS SATISFIED ABO UT THE REASONABLENESS OF THE AMOUNT WRITTEN OFF OR RESERVED IN THE ACCOUNTS, AS THE CASE MAY BE, TO MEET DEPREDATION OF OR LOSS ON THE REALIZATION OF INVESTMENT. THE ARGUMENT ON BEHALF OF THE ASSESSEE PRIMARILY IS T HAT WHEN THE RULES FOR PREPARATION OF THE FINAL ACCOUNTS PROVIDE THAT THE PR OFIT ON SALE OF INVESTMENTS, SHOULD BE SHOWN IN THE CREDIT SIDE OF THE PROFIT AND LOSS ACCOUNT, THEN THERE WAS NO QUESTION OF RULE 5(B) BEING APPLIC ABLE AND THAT WAS THE REASON WHY THE SAID RULE WAS OMITTED WITH EFFECT FROM 01.04.1989 AND THE EFFECT OF THE OMISSION IS THAT WHERE THE PROFIT AND LOSS ACCOUNT ALREADY INCLUDES THE PROFIT ON SALE OF INVESTMENTS, THE SAME SHALL STAND EXCLUDED. THE EFFECT OF THE OMISSION OF THE RULE WAS CONSIDERED BY THE PUNS BENCH OF THE TRIBUNAL IN ITS ORDER DATED 31 AUGUST 2009, IN THE CAS E OF BAJAJ ALLIANZ GENERAL INSURANCE COMPANY, IN ITA NO: 1447/PN12007 AND CO NO :521PN12007 (ASSESSMENT YEAR 2003-04). A COPY OF THE SAID ORDER HA S BEEN FILED BEFORE US. THE TRIBUNAL HAS ALSO CONSIDERED THE CIRCULAR NO.528 DATED 16.12.1988. AFTER ANALYZING THE IMPACT OF THE OMISSION OF RULE 5(B) AN D THE CIRCULAR, THE TRIBUNAL HELD AS UNDER. - 8. A CONCLUSION CAN BE DRAWN ON THE BASIS OF THE AB OVE ELABORATE DISCUSSION THAT THE DELETION OF SUB RULE (B) FROM RUL E 5OF THE FIRST SCHEDULE WAS WITH A SPECIFIC PURPOSE. THIS SCHEDULE NOT ONLY PRESCRIBES THE METHOD OF COMPUTATION OF INCOME OF I NSURANCE BUSINESS IN PART (A) BUT ALSO PRESCRIBE THE METHOD OF COMPUTATI ON OF OTHER INSURANCE BUSINESS IN PART (B). RULE 5 IS WITHIN PART (B) AND EARLIER IT HAS PRESCRIBED THE METHOD OF TAXATION OF PROFIT ON SALE OF INVESTMENTS WHICH WAS LATER ON SCRAPED. EVEN BY APPLYING A REVER SE LOGIC WE MUST ARRIVE AT THE SAME CONCLUSION THAT HAD THE IMPUGNED INCOME WAS EARLIER TAXABLE UNDER ONE SPECIFIC CLAUSE BUT EVEN O N ITS DELETION NO CLAUSE WAS INTRODUCED OR REPLACED TO PRESCRIBE THE METH OD OF TAXATION OF SUCH INCOME;. THEREFORE THE REVENUE DEPAR TMENT HAS NO RIGHT TO TAX SUCH AN INCOME IN THE ABSENCE OF ANY EN ABLING PROVISION. NATURALLY, SUCH A DELETION CANNOT BE TREATED A SUPE RFLUOUS ACTION BUT THIS CHANGE HAD TO GIVE A DEFINITE JUDICIAL MEANING . WE HAVE TO ASCRIBE A LOGICAL CONCLUSION TO THE SAID DELETION O F SUB RULE (B) FROM RULE 5 AND THE NATURAL MEANING IS THAT AFTER THE DEL ETION THE INCOME ITA NO.2398/M/09 ICICI LOMBARD GENERAL INSURANCE CO LTD 9 DESCRIBED THEREIN IS OUT OF THE PURVIEW OF COMPUTATI ON OF INSURANCE BUSINESS FROM THE FIRST SCHEDULE THEREFORE CONSEQUENT LY CANNOT BE TAXED U/S 44 OF I T ACT. AFTER EXPRESSING THIS VIEW WE HEREBY DISMISS THE CROSS OBJECTION V F THE REVENUE. 19: THE AFORESAID ORDER OF THE PUNE BENCH, WHICH WAS I N THE CASE OF A COMPANY CARRYING ON GENERAL INSURANCE BUSINESS, WAS FOLLOWED BY THE MUMBAI BENCH OF THE TRIBUNAL IN ITS ORDER DATED 17.09 .2010, IN THE CASE :OF HDFC ERGO GENERAL INSURANCE COMPANY LTD., IN ITA NO: 338/MUM12009 (ASSESSMENT YEAR 2004- 05) AS ALSO IN ITS ORDER DATED 30.04.2010, IN THE CASE OF RELIANCE GENERAL INSURANCE CO. LTD., IN :ITA NO. 781/ MUM12007 (AND OTHER APPEALS). COPIES OF THESE ORDERS HAVE ALSO BEEN FIL ED BEFORE US. IN THESE ORDERS IT HAS BEEN HELD THAT THE PROFIT ON SALE OF INVESTMENT IN THE CASE OF AN ASSESSEE CARRYING ON GENERAL INSURANCE BUSINESS CANN OT BE BROUGHT TO TAX AFTER THE OMISSION OF RULE 5(B) AND AS PER THE CIRCULA R CITED ABOVE. SINCE THE CONTROVERSY BEFORE US IS IDENTICAL, RESPECTFULLY FOLL OWING THE ORDERS OF THE PUNS AND MUMBAL BENCHES OF THE TRIBUNAL CITED ABOVE, WE D IRECT THE ASSESSING OFFICER TO EXCLUDE THE PROFIT OF Z47,45,699/- ON THE SALE OF INVESTMENTS FROM THE ASSESSMENT V 20. THE LEARNED CIT DR, HOWEVER, ARGUED THAT THE EFFE CT OF THE OMISSION OF RULE 5(B) IS JUST THE OPPOSITE OF WHAT THE ASSESSEE HAS CONTENDED. ACCORDING TO HIM, AFTER 01.04.1989 THE EXEMPTION WAS TAKEN AW AY. HE SUBMITTED FURTHER THAT THE PROFIT ON SALE OF THE INVESTMENT HAS ALREADY BEEN INCLUDED IN THE PROFIT AND LOSS ACCOUNT AND THERE IS NO AUTHORITY TO TAKE IT OUT EVEN UNDER RULE 5(B) AS IT EXISTED BEFORE 01.04.1989. ACCORDING TO H IM, THERE WAS NO SCOPE FOR APPLYING THE RULES OF INTERPRETATION WHEN THE STATUTO RY PROVISIONS ARE CLEAR. SINCE THE MATTER IS CONCLUDED BY THE ORDERS OF THE T RIBUNAL CITED SUPRA, WHERE ALL THESE ASPECTS HAVE BEEN CONSIDERED, WE ARE UNABL E TO TAKE A DIFFERENT VIEW OF THE MATTER. THUS GROUND NO.4 IS ALLOWED. 5.4 SINCE THE TRIBUNAL HAS BEEN TAKING A CONSISTENT VIEW ON THIS ISSUE IN A SERIES OF DECISIONS AS RELIED UPON BY THE LD AR OF THE ASSESS EE; THEREFORE, TO MAINTAIN THE RULE OF CONSISTENCY AND UNIFORMITY ON THIS ASPECT, WE DE ICIDE THIS ISSUE IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. 6 THE ASSESSEE HAS ALSO RAISED AN ADDITIONAL GROUND VIDE LETTER DATED AS UNDER: [1] ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE ASSESSING OFFICER HAS ERRED IN COMPUTING INCOME OF THE APPELLA NT UNDER SECTION 115JB OF THE ACT. [2] THE ASSESSING OFFICER OUGHT TO HAVE APPRECIATED THAT PROVISIONS OF SECTION 115JB OF THE ACT ARE NOT APPLICABLE TO THE APPELLANT AS THE APPELLANT PREPARES ITS ACCOUNTS AS PER THE INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY (IRDA) (PREPARATION OF FINANCIAL STATEMENT S AND AUDITORS REPORT OF INSURANCE COMPANIES) REGULATION, 2002 AND NOT AS PER PROVISIONS OF PART II AND ILL OF SCHEDULE VI OF THE COMPANIES ACT, 1956. ITA NO.2398/M/09 ICICI LOMBARD GENERAL INSURANCE CO LTD 10 7 WE HAVE HEARD THE LD AR OF THE ASSESSEE AS WELL A S THE LD DR ON THE POINT OF ADMISSIBILITY OF ADDITIONAL GROUND AND CONSIDERED T HE RELEVANT MATERIAL ON RECORD. SINCE THE ADDITIONAL GROUND RAISED BY THE ASSESSEE IS ON THE ISSUE OF APPLICABILITY OF THE PROVISIONS OF SEC. 115JB WITH RESPECT TO THE IN SURANCE COMPANIES, WHICH IS PURELY A LEGAL ISSUE AND THEREFORE, NO NEW FACTS ARE REQUI RED TO BE EXAMINED OR INVESTIGATED FOR ADJUDICATION OF THE ADDITIONAL GR OUND RAISED BY THE ASSESSEE. ACCORDINGLY, IN VIEW OF THE DECISION OF THE HONBL E SUPREME COURT IN THE CASE OF NTPC REPORTED IN 229 ITR 383(SC), WE ADMIT THE ADD ITIONAL GROUND RAISED BY THE ASSESSEE FOR ADJUDICATION ON MERIT. 8 THE ASSESSING OFFICER HAS POINTED OUT THAT THE TO TAL INCOME AS PER THE PROVISIONS OF I T ACT AT LOSS OF ` 2,81,60,340/- WHICH IS OBVIOUSLY LESS THAN 7.5% O F BOOK PROFIT COMPUTED BY THE ASSESSING OFFICER U/S 115JB. ACCORDINGLY, THE TOTAL INCOME OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION WAS A SSESSED BY THE ASSESSING OFFICER AS PER THE PROVISIONS OF SEC. 115JB AT ` 3,97,05,832/- AND TAXED ACCORDINGLY. 8.1 BEFORE US, THE LD AR HAS SUBMITTED THAT THE PRO VISIONS OF SEC. 115JB ARE NOT APPLICABLE IN THE CASE OF THE INSURANCE COMPANIES B ECAUSE THE PROFIT AND LOSS ACCOUNT OF THE INSURANCE COMPANIES ARE NOT REQUIRED TO BE PREPARED AS PER THE PART II OF SCHEDULE VI OF COMPANIES ACT, WHICH IS A BASIC REQUIREMENT FOR COMPUTATION OF BOOK PROFIT U/S 115JB. THE LD AR HA S REFERRED SECTION 211 OF COMPANIES ACT 1956 AND SUBMITTED THAT AS PER THE PR OVISO TO SUB. SEC. 2 OF SECTION 211 OF THE COMPANIES ACT, 1956, THE PROVISIONS OF S ECTION 2 WHICH REQUIRES THE COMPANY TO PREPARE THE PROFIT & LOSS ACCOUNT AS PER PART II OF SCHEDULE VI ARE NOT APPLICABLE TO THE INSURANCE OR BANKING OR ANY COMPA NIES ENGAGED IN THE GENERATION OR SUPPLY OF ELECTRICITY OR TO ANY OTHE R CLASS OF COMPANY FOR WHICH A ITA NO.2398/M/09 ICICI LOMBARD GENERAL INSURANCE CO LTD 11 FORM OF PROFIT AND LOSS ACCOUNT HAS BEEN SPECIFIED IN OR UNDER THE ACT GOVERNING SUCH CLASS OF COMPANY. 8.2 THE LD AR HAS POINTED OUT THAT THE INSURANCE CO MPANIES REQUIRE TO PREPARE THEIR ACCOUNTS AS PER THE INSURANCE ACT AND NOT AS PER THE COMPANIES ACT. SHE HAS REFERRED SUB. SEC. 5 OF SEC. 211 OF THE COMPANIES A CT AND SUBMITTED THAT IN THE CASE OF INSURANCE COMPANY BALANCE SHEET AND P&L ACCOUNT SHALL NOT BE TREATED AS NOT DISCLOSING A TRUE AND FAIR VIEW OF THE STATE OF AFF AIRS OF THE COMPANY, MERELY BY REASON OF THE FACT THAT THEY DO NOT DISCLOSE ANY MA TTER, WHICH ARE NOT REQUIRED TO BE DISCLOSED BY THE INSURANCE ACT 1938. 8.3 THE LD AR HAS RELIED UPON THE DECISION OF THE H YDERBAD BENCH OF THE TRIBUNAL IN THE CASE OF STATE BANK OF HYDERABAD VS DCIT IN I TA 578/HYD/2010 VIDE ORDER DATED 7 TH SEPT 2012 AND SUBMITTED AN IDENTICAL ISSUE HAS BE EN CONSIDERED AND DECIDED BY THE TRIBUNAL BY HOLDING THAT THE PROVISI ONS OF SECTION 115JB WILL NOT BE APPLICABLE TO THE CASES OF THE BANKING COMPANIES. 8.4 SIMILARLY, IN THE CASE OF RELIANCE ENERGY LTD V S ACIT, THE TRIBUNAL VIDE ITS ORDER DATED 24 TH JAN 2008 IN ITA NO. 218/MUM/05 HAS TAKEN A VIEW T HAT THE PROVISIONS OF SEC. 115JB ARE NOT APPLICABLE WHEN THE ACCOUNTS ARE NOT REQUIRED TO BE PREPARED AS PER THE PART II OF SCHEDULE VI OF THE COMPANIE S ACT. 8.4 THE LD AR HAS FURTHER POINTED OUT THAT NOW AN A MENDMENT HAS BEEN BROUGHT IN STATUTE BY THE FINANCE ACT 2012 WHEREBY SUB.SEC. 2 HAS BEEN SUBSTITUTED W.E.F 1.4.2013; THEREFORE, PRIOR TO 1.4.2013, THE PROVISI ONS OF SEC. 115JB CANNOT BE APPLIED IN THE CASE OF COMPANIES WHICH ARE NOT REQUIRED TO PREPARE ACCOUNTS AS PER THE PROVISIONS OF PART II OF SCHEDULE VI OF THE COMPA NIES ACT, 1956. ITA NO.2398/M/09 ICICI LOMBARD GENERAL INSURANCE CO LTD 12 8.5 ON THE OTHER HAND, THE LD DR HAS SUBMITTED THAT AS PER SECTION 115JB, EVERY COMPANY IS REQUIRED TO PREPARE ITS ACCOUNTS AS PER SCHEDULE VI OF THE COMPANIES ACT, 1956. HOWEVER, AS PER THE PROVISIONS OF THE CO MPANIES ACT, 1956, CERTAIN COMPANIES, E.G. INSURANCE, BANKING OR ELECTRICITY C OMPANY, ARE ALLOWED TO PREPARE THEIR P&L ACCOUNT IN ACCORDANCE WITH THE PROVISIONS SPECIFIED IN THEIR REGULATORY ACTS. IN ORDER TO ALIGN THE PROVISIONS OF INCOME-TA X ACT WITH THE COMPANIES ACT, 1956, IT IS PROPOSED TO AMEND SECTION 115JB TO PROV IDE THAT THE COMPANIES WHICH ARE NOT REQUIRED UNDER SECTION 211 OF THE COMPANIES ACT TO PREPARE THEIR PROFIT AND LOSS ACCOUNT IN ACCORDANCE WITH THE SCHEDULE VI OF THE COMPANIES ACT, 1956, PROFIT AND LOSS ACCOUNT PREPARED IN ACCORDANCE WITH THE PR OVISIONS OF THEIR REGULATORY ACTS SHALL BE TAKEN AS A BASIS FOR COMPUTING THE BO OK PROFIT UNDER SECTION 115JB. 8.6 THE LD DR HAS FURTHER REFERRED THE FINANCE BILL 2012 AND SUBMITTED THAT AS PER THE FINANCE BILL, IT IS PROPOSED TO AMEND THE AFOR ESAID SUB-SECTION SO AS TO PROVIDE THAT EVERY ASSESSEE, (A) BEING A COMPANY, OTHER THA N A COMPANY TO WHICH THE PROVISO TO SUB-SECTION (2) OF SECTION 211 OF THE CO MPANIES ACT, 1956 IS APPLICABLE, SHALL, FOR THE PURPOSES OF THE AFORESAID SECTION, P REPARE ITS PROFITS AND LOSS ACCOUNT FOR THE RELEVANT PREVIOUS YEAR IN ACCORDANCE WITH T HE PROVISIONS OF PART II OF SCHEDULE VI TO THE COMPANIES ACT, 1956; OR (B) BEING A COMPA NY, TO WHICH THE PROVISO TO SUB- SECTION (2) OF SECTION 211 OF THE COMPANIES ACT, 19 56 IS APPLICABLE, SHALL, FOR THE PURPOSES OF THIS SECTION, PREPARE ITS PROFIT AND LO SS ACCOUNT FOR THE RELEVANT PREVIOUS YEAR IN ACCORDANCE WITH THE PROVISIONS OF THE ACT G OVERNING SUCH COMPANY. 8.7 THUS, THE LD DR HAS SUBMITTED THAT EVEN AS PER THE PRE-AMEND PROVISIONS OF SEC. 115JB, THE ACCOUNTS PREPARED IN ACCORDANCE WIT H THE REGULATORY ACT CAN BE TAKEN FOR THE PURPOSE OF COMPUTATION OF BOOK PROFI T U/S 115JB. ITA NO.2398/M/09 ICICI LOMBARD GENERAL INSURANCE CO LTD 13 9 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS THE RELEVANT MATERIAL ON RECORD. THERE IS NO QUARREL ON THE POINT THAT THE ASSESSEE, BEING AN INSURANCE COMPANY IS NOT REQUIRED TO PREPARE ITS ACCOUNTS AS PER PART II & III OF SCHEDULE VI OF THE COMPANIES ACT 1956. SUB. SECTION (2) OF SEC 2 11 ARE REQUIRED EVERY P&L ACCOUNTS OF THE COMPANIES SHALL BE PREPARED AS PER THE REQUIREMENT OF PART II OF SCHEDULE VI. HOWEVER, THE PROVISO TO SUB. SEC (2) OF SEC. 211 OF THE COMPANIES ACT CREATES AN EXEMPTION OF APPLICABILITY OF SUB. SEC. (2) INTER-ALIA IN RESPECT OF INSURANCE COMPANIES OR BANKING COMPANIES OR ANY OT HER COMPANIES ENGAGED IN GENERATION AND SUPPLY OF ELECTRICITY FOR WHICH A FO RM OF PROFIT AND LOSS ACCOUNT HAS BEEN SPECIFIED IN OR UNDER THE ACT GOVERNING SUCH CLASS OF COMPANY. EVEN IF AN INSURANCE COMPANY DOES NOT DISCLOSE ANY MATTER IN T HE BALANCE SHEET AND P&L ACCOUNT BECAUSE THE SAME IS NOT REQUIRED TO BE DISC LOSED BY THE INSURANCE ACT SHALL NOT BE TREATED NON DISCLOSURE OF A TRUE AND F AIR VIEW OF THE STATE OF AFFAIRS OF THE COMPANY AS THE SAID CONDITION HAS BEEN RELAXED BY S UB.,SEC 5 OF SEC 211 OF THE COMPANIES ACT . 9.1 IT IS TO BE NOTED THAT IN ORDER TO ALIGN THE PR OVISIONS OF THE I T ACT WITH THE COMPANIES ACT , AN AMENDMENT HAS BEEN BROUGHT IN TO THE STATUTE BY THE FINANCE ACT 2012 WHEREBY SEC 115JB HAS BEEN AMENDED W.E. F 2013 AND THEREFORE, PRIOR TO 1.4.2013, THE AMENDED PROVISIONS OF SEC. 115JB CAN NOT BE APPLIED IN CASE OF INSURANCE, BANKING, ELECTRICITY, GENERATION AND DIS TRIBUTION COMPANIES AND OTHER CLASS OF COMPANIES, WHICH ARE NOT REQUIRED TO PREPA RE THEIR ACCOUNTS AND PARTICULARLY BALANCE SHEET AND P&L ACCOUNT AS PER P ART II & III OF SCHEDULE VI OF THE COMPANIES ACT. ITA NO.2398/M/09 ICICI LOMBARD GENERAL INSURANCE CO LTD 14 9.2 THE HYDERABAD BENCH OF THE TRIBUNAL IN THE CASE D OF STATE BANK OF HYDERABAD (SUPRA) HAS CONSIDERED AND DECIDED A SIMI LAR ISSUE; THOUGH IN THE CASE OF BANK IN PARAS 13 & 14 AS UNDER: 13. THE PROVISIONS OF SEC.1153B WILL BE APPLICABLE TO ALL COMPANIES. HOWEVER, IT IS CONTENDED THAT SEC.115JB WILL BE APPLICABLE O NLY WHERE THE ASSESSEE IS REQUIRED TO SHOW PROFIT & LOSS ACCOUNT IN ACCORDANCE W ITH SCHEDULE VI OF COMPANIES ACT. AS THE BANKS ARE REQUIRED TO PREPARE B ALANCE SHEET AND PROFIT & LOSS ACCOUNT IN ACCORDANCE WITH THE BANKING REGULATION ACT, PROVISION OF 115JB CANNOT BE APPLIED TO THE BANKS. IN THE CASE OF MAHARASHTRA STATE ELECTRICITY BOARD VS. )CIT (82 LTD 422) IT WAS HELD THAT PROVISIONS OF BOOK PROFIT CANNOT BE APPLIED TO ELEC TRICITY COMPANIES. BANKING COMPANIES AND COMPANIES ENGAGED IN GENERATION AND SU PPLY OF ELECTRICITY DO NOT HAVE TO PREPARE THEIR ACCOUNTS IN ACCORDANCE WI TH PARTS II AND III OF SCH. VI OF THE COMPANIES ACT BY THE VIRTUE OF PROVIS O TO SEC 211(2) OF THE COMPANIES ACT. WE FIND THAT BY THE FINANCE ACT 2012 , WITH EFFECT FROM 1.4.2013, EVEN COMPANIES TO WHICH PROVISO TO SEC 21 1(2) APPLIES (THE BANKING COMPANIES AND COMPANIES ENGAGED IN GENERATING AND D ISTRIBUTION OF ELECTRICITY), SHOULD PREPARE THEIR P&L AND BALANCE SHE ET IN ACCORDANCE WITH THE PROVISIONS OF THE ACT GOVERNING SUCH COMPANIES. THIS WOULD MEAN THAT PRIOR TO AY 2013-14, PROVISIONS OF SEC 115)B WILL NOT APPLY TO COMPANIES TO WHICH PROVISO TO SEC 211(2) OF THE COMPANIES ACT, 1 956 APPLIES. TH ASSESSEE BEING A COMPANY TO WHICH PROVISO TO SEC 211(2) OF TH E COMPANIES ACT 1956 APPLIES, WILL NOT BE LIABLE TO BE TAXED UNDER SEC 1 15JB. 14. THE MUMBAI TRIBUNAL IN THE CASE OF KRUNG THAI BA NK VS. JCIT (133 TTJ 435), TO WHICH ONE OF US IS A PARTY HAS HELD THAT PROVISI ONS OF SEC 115JB CANNOT BE APPLIED TO THE BANKING COMPANY. 9.3 SIMILARLY, IN THE CASE OF RELIANCE ENERGY (SUPR A), THE COORDINATE BENCH OF THIS TRIBUNAL HAS HELD IN PARAS 28 & 29 AS UNDER: 28 AS DISCUSSED ABOVE WHEN IT IS NOT POSSIBLE TO P REPARE THE ACCOUNTS UNDER THE COMPANIES ACT FOR THE PURPOSE OF COMPUTATIO N U/S 115JB, THEREFORE, THE ASSESSEE CANNOT BE FORCED TO PREPARE TH E ACCOUNTS WHEN IT IS NOT POSSIBLE. THEREFORE, WE ARE IN AGREEMENT WITH THE CONTENTIONS OF THE ASSESSEE IN AS MUCH AS THE ACCOUNTING POLICIES FOLL OWED IN THE ELECTRICITY ACCOUNTS IF FOLLOWED FOR THE PREPARATION OF COMPANIE S ACT ACCOUNT WILL NOT DISCLOSE TRUE AND FAIR VIEW AND WILL NOT BE IN ACCOR DANCE WITH PART II AND III OF SCHEDULE VI OF THE COMPANIES ACT. THE RATIO OF THE DECISIONS OF THE HONBLE SUPREME COURT AND THE RATIO OF THE DECISION OF THE TRIBUNAL DISCUSSED ABOVE ARE IN SUPPORT OF THE CONTENTIONS OF THE ASSESSEE. WE FURTHER FOUND THAT THE ISSUE OF APPLICABILITY OF SEC. 115J CAME BEFORE THE TRIBUNAL FOR AY 88-89. TAKING INTO CONSIDERATION THE PREPARATION OF ACCOUNT S UNDER THE ELECTRICITY ACT AND OTHER CONTENTIONS THE ASSESSEE INCLUDING THE DECISIONS OF THE SUPREME COURT IN THE CASE OF B.C.SRINIVASA SETTY (SU PRA), THE TRIBUNAL HAS HELD ITA NO.2398/M/09 ICICI LOMBARD GENERAL INSURANCE CO LTD 15 THAT THE PROVISIONS OF SEC. 115J ARE NOT ATTRACTED ON THE FACTS OF THE PRESENT CASE. 29 AS DISCUSSED ABOVE, THE ASSESSEE IS FOLLOWING TH E ACCOUNTING POLICIES UNDER THE ELECTRICITY SUPPLY ACT AND PREPARED ITS ACC OUNTS IN VIEW OF THOSE VERY POLICIES. FOLLOWING THOSE VERY POLICIES, THE AC COUNTS IN ACCORDANCE WITH PART II & III OF SCHEDULE VI OF THE COMPANIES ACT AR E NOT APPLICABLE AT ALL. ONCE THERE IS NO POSSIBILITY FOR PREPARING THE ACCOUNT S IN ACCORDANCE WITH THE PART II & II OF SCHEDULE VI OF COMPANIES ACT THE N THE PROVISIONS OF SEC. 115JB CANNOT BE FORCED. THEREFORE, IN VIEW OF THE A BOVE FACTS AND CIRCUMSTANCES AND RESPECTFULLY FOLLOWING THE ABOVE DECISIONS OF THE HONBLE SUPREME COURT AND THE DECISION OF THE TRIBUNAL FOR AY 88-89, WE HOLD THAT PROVISIONS OF SEC. 115JB ARE NOT APPLICABLE ON THE FACTS OF THE PRESENT CASE. 10 FOLLOWING THE DECISIONS OF THE COORDINATE BENCHE S OF THIS TRIBUNAL, WE HOLD THAT WHEN THE INSURANCE COMPANIES, BANKING COMPANIE S AND ELECTRICITY GENERATION AND DISTRIBUTIONS COMPANIES ARE TREATED IN THE SAME CLASS AS PER THE PROVISIONS OF SEC. 211 OF THE COMPANIES ACT IN PREPARING THEIR FI NAL ACCOUNTS, THEN THESE COMPANIES CANNOT BE TREATED DIFFERENTLY FOR THE PUR POSE OF SEC. 115JB AND ACCORDINGLY, THE PROVISIONS OF SEC. 115JB ARE NOT A PPLICABLE IN THE CASE OF THE ASSESSEE. 11 IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 10 TH ,DAY OF OCT 2012. SD/- SD/- ( RAJENDRA SINGH ) ACCOUNTANT MEMBER ( VIJAY PAL RAO ) JUDICIAL MEMBER PLACE: MUMBAI : DATED: 10 TH , OCT 2012 RAJ* ITA NO.2398/M/09 ICICI LOMBARD GENERAL INSURANCE CO LTD 16 COPY FORWARDED TO: 1 APPELLANT 2 RESPONDENT 3 CIT 4 CIT(A) 5 DR /TRUE COPY/ BY ORDER DY /AR, ITAT, MUMBAI