HDFC STANDARD LIFE INSURANCE COMPANY LTD, MUMBAI V. DCIT 1(1), MUMBAI

ITA 3025/MUM/2013

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 8181 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 9 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-02-2017
• Appeal Filed By: Assessee
• Bench Allotted: H
• Next Hearing Date: 16-08-2016
• Assessment Year: 2001-2002
• Appeal Filed On: 19-04-2013
• Court: TRIBUNAL
• Department Lawyers: M C OMI NINGSHEN
• Assessee Lawyers: P J PARDIWALA; MRS ARTI VISSANJI
• Keywords: Depreciation; Revised return
• Section: 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES H, MUMBAI BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER AND SHRI ASHWANI TANEJA, ACCOUNTANT MEMBER I.T.A. NO. 3025/MUM/2013 (ASSESSMENT YEAR: 2001-02) HDFC STANDARD LIFE INSURANCE COMPANY LTD., 19 TH FLOOR, LODHA EXCEULUS, APOLLO MILLS COMPOUND, N.M. JOSHI ROAD, MAHALAXMI, MUMBAI- 400011 V S THE DEPUTY COMMISSIONER OF INCOME TAX 1 (1), MUMBAI, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI- 400020 PAN : AAACH8755L (APP ELLANT ) (RESPONDENT) APP ELLANT BY SHRI P.J. PARDIWALA & MRS. ARTI VISSANJI RESPONDENT BY SHRI M.C. OMI NINGSHEN (DR) DATE OF HEARING : 02/02/2017 DATE OF ORDER : 15/02/2017 O R D E R PER ASHWANI TANEJA, AM: THIS APPEAL HAS BEEN FILED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)- 4, MUMBAI (HEREINAFTER CAL LED AS LD. CIT (A) IN SHORT) DATED 21.01.2013 PASSED AGAINST THE ASSESSME NT ORDER OF THE ASSESSING OFFICER (AO) DATED 17.11.2006 U/S 143 (3) R.W.S. 147 OF THE INCOME TAX ACT, 1961 FOR AY 2001-02 ON THE FOLLOWIN G GROUNDS: 1. GROUND NO. 1 : RE-OPENING OF ASSESSMENT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE COMMISSIONER OF INCOME TAX (APPEALS) - 4, MUMBAI [' CIT(A), FAILED TO APPRECIATE THAT THE JURISDICTIONAL PRE-CO NDITIONS NECESSARY FOR ASSUMING JURISDICTION UNDER SECTION 1 47 OF THE 2 I.T.A. NO. 3025/MUM/2013 INCOME-TAX ACT. 1961 (THE ACT'), WERE NOT SATISFIED AND THEREFORE, THE REASSESSMENT ORDER WAS ILLEGAL AND BAD IN LAW. 2. GROUND NO- 2: TAXABLE INCOME AS PER REVISED COMPUTATION OF INCOME ON THE FACTS AND IN THE CIRCUMSTANCES OF THE EASE A ND IN LAW, THE CI TA) OUGHT TO HAVE HELD APPELLATE PROCEE DINGS, THE APPELLANT'S TAXABLE INCOME IS A LOSS OF RS. 1,92,56 ,206 FROM LIFE INSURANCE BUSINESS AS COMPARED TO ASSESSED LOS S OF 57,80,380 UNDER SECTION 148 OF THE ACT. 3. GROUND NO. 3: DEPRECIATION ALLOWANCE IN THE POLICYHOLDERS ACCOUNT WITHOUT PREJUDICE TO GROUND NO. 2 ABOVE, ON THE 1,3 1,87,125 APPORTIONED TO THE POLICYHOLDERS' ACCOUNT FROM THE SURPLUS AS PER THE POLICYHOLDERS ACCOUNT, WITHOUT THE NECESSIT Y OF ANY FURTHER VERIFICATION OF THE CLAIM. 4. GROUND NO. 4: RATIO FOR APPORTIONMENT OF DEPRECIATION ALLOWANCE WITHOUT PREJUDICE TO GROUND NOS. 2 AND 3 ABOVE, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, TH E CIT(A) ERRED IN INCLUDING THE CONTRIBUTION OF FUNDS FROM SHAREHOLDERS ACCOUNT TO POLICYHOLDERS' FUND OF RS. 5.38,46,000 AS PART OF NET TURNOVER IN THE POLICYHO LDERS' ACCOUNT WHILE DETERMINING THE RATIO OF TURNOVER BET WEEN THE POLICYHOLDERS AND THE SHAREHOLDERS' FOR THE PURPOS E OF APPORTIONING THE TOTAL DEPRECIATION ALLOWANCE. 5. GROUND NO. 5: CLAIM FOR PRELIMINARY EXPENSES WITHOUT PREJUDICE TO GROUND NO. 2 ABOVE, ON THE FAC TS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A ) ERRED IN NOT ACCEPTING THE CLAIM OF THE APPELLANT THAT THE E NTIRE PRELIMINARY EXPENSES OF RS.36, 40,800 BE ALLOWED IN DETERMINING THE TAXABLE INCOME IN THE SHAREHOLDERS ACCOUNT GIVEN THAT THERE WAS NO FINDING IN THE ASSESSMENT O RDER BY THE AO THAT PRELIMINARY EXPENSES SHOULD BE DISALLOW ED. 6. GROUND NO. 6: ADD BACK OF PRELIMINARY EXPENSES WITHOUT PREJUDICE TO GROUND NOS. 2 AND 5 ABOVE, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, TH E CIT(A) ERRED IN CONFIRMING THE ACTION OF THE AO IN ADDING BACK PRELIMINARY EXPENSES OF RS. 19,07,780 WHICH WERE NO T DEBITED TO THE SHAREHOLDERS ACCOUNT. 7. GROUND NO. 7: DEDUCTIBILITY OF PRELIMINARY EXPENSE S 3 I.T.A. NO. 3025/MUM/2013 WITHOUT PREJUDICE TO GROUND NOS. 2 AND 5 ABOVE, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, TH E CIT(A) ERRED IN HOLDING THAT THE AO HAS ALLOWED THE PRELIM INARY EXPENSES IN TOTAL UNDER BOTH THE ACCOUNTS (I.E. POL ICYHOLDERS AND SHAREHOLDERS') AFTER REALLOCATION, WHEN, IN FAC T, THESE EXPENSES HAVE NOT BEEN SO ALLOWED. 8. GROUND NO. 8: CLAIM FOR ENTIRE STAMP DUTY EXPENSE S WITHOUT PREJUDICE TO GROUND NO. 2 ABOVE, ON THE FAC TS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A ) ERRED IN UPHOLDING THE ACTION OF THE AO IN NOT ACCEPTING THE CLAIM OF THE APPELLANT THAT ENTIRE STAMP DUTY EXPENSES OF RS . 3,36,000 OUGHT TO BE ALLOWED IN DETERMINING THE TAX ABLE INCOME IN THE SHAREHOLDERS' ACCOUNT. 9. GROUND NO. 9: CLAIM FOR STAMP DUTY EXPENSES WITHOUT PREJUDICE TO GROUND NOS. 2 AND 8 ABOVE, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, TH E CIT(A) OUGHT TO HAVE HIMSELF DECIDED ON GROUND NO. 8 RAISE D BEFORE HIM, AND DIRECTED THE AO TO ALLOW THE STAMP DUTY EX PENSES OF RS. 3,36,000 AS CLAIMED IN THE REVISED RETURN OF INCOME, WITHOUT THE NECESSITY OF ANY FURTHER VERIFICATION O F THE CLAIM. THE APPELLANT CRAVES LEAVE TO ADD TO OR ALTER, BY D ELETION, SUBSTITUTION OR OTHERWISE, ANY OR ALL OF THE ABOVE GROUNDS OF APPEAL AT OR BEFORE THE HEARING OF THE APPEAL. 2. DURING THE COURSE OF HEARING, LD. SR. COUNSEL STAT ED AT THE VERY OUTSET THAT IN THIS CASE ALL THE ISSUES RAISED IN T HIS APPEAL HAVE ALREADY REACHED BEFORE THE TRIBUNAL AND DECIDED BY IT VIDE ITS ORDER DATED 20.09.2013 FOR AY 2002-03 TO 2009-10. IT WAS FURTHE R SUBMITTED THAT IN THE APPEAL BEFORE LD. CIT (A), REQUEST WAS MADE THA T THE ISSUES INVOLVED ARE IDENTICAL TO THE ISSUES DECIDED BY THE TRIBUNAL IN THE CASE OF ICICI PRUDENTIAL (ITA NO. 6854/M/2010) ORDER DATED 14.08. 2012 AND THEREFORE THE SAME ORDER SHOULD BE FOLLOWED FOR DEC IDING IN THIS APPEAL. BUT THE SAME WAS NOT FOLLOWED ON THE GROUND THAT AP PEAL AGAINST THE SAME WAS PENDING BEFORE THE HONBLE HIGH COURT. IN VIEW OF THESE CIRCUMSTANCES, IT WAS REQUESTED THAT NOW SINCE TRIB UNAL HAS DECIDED THIS ISSUES IN ASSESSEES OWN CASE IN ALL THE SUBSE QUENT YEARS, THEREFORE THIS APPEAL CAN BE SENT BACK TO THE FILE OF LD. CIT (A) TO DECIDE THE SAME 4 I.T.A. NO. 3025/MUM/2013 AFRESH KEEPING IN VIEW ORDER OF TRIBUNAL PASSED IN ASSESSEES OWN CASE IN SUBSEQUENT YEARS. 3. PER CONTRA, LD. DR APPEARING ON BEHALF OF THE REVE NUE SUBMITTED THAT HE WILL HAVE NO OBJECTION IF THIS APPEAL IS SE NT BACK TO THE FILE OF THE LD. CIT (A) TO BE DECIDED AFRESH IN ACCORDANCE WITH THE ORDER OF THE TRIBUNAL. 4. WE HAVE GONE THROUGH THE ORDER PASSED BY THE LD. C IT (A). WE FIND THAT PROPER REASONING HAS NOT BEEN GIVEN BY TH E LD. CIT (A) WHILE DECIDING THIS APPEAL IN AS MUCH AS LEGAL ISSUES AND FACTS HAVE NOT BEEN PROPERLY ANALYSED. LD. CIT (A) HAS NOT GIVEN APPRO PRIATE REASON AS TO WHY THE ORDER PASSED BY THE TRIBUNAL IN THE CASE OF ICICI PRUDENTIAL, SUPRA WAS NOT APPLICABLE ON THIS CASE. IT IS FURTHE R NOTED BY US THAT NOW TRIBUNAL HAS PASSED AN ORDER IN ASSESSEES OWN CASE FOR AY 2002- 03 TO 2009-10, WHEREIN IDENTICAL ISSUES HAVE BEEN D ECIDED BY THE TRIBUNAL. THUS, WE AGREE WITH THE REQUEST OF THE AS SESSEE AND FIND IT APPROPRIATE TO SEND THIS APPEAL BACK TO THE FILE OF LD. CIT (A) TO BE DECIDED AFRESH AFTER TAKING INTO ACCOUNT THE ORDER PASSED BY THE TRIBUNAL IN ASSESSEES OWN CASE DATED 20.09.2013. L D. CIT (A) SHALL GIVE ADEQUATE OPPORTUNITY OF HEARING TO ENABLE THE ASSES SEE TO FILE WRITTEN SUBMISSIONS AND EVIDENCES. THE ASSESSEE SHALL BE FR EE TO RAISE ALL LEGAL AS WELL AS FACTUAL ISSUES. LD. CIT (A) SHALL PASS T HE ORDER AFTER TAKING INTO ACCOUNT ENTIRE MATERIAL AS MAY BE BROUGHT ON R ECORD BY THE ASSESSEE INCLUDING THE JUDGEMENT OF THE TRIBUNAL IN ASSESSEES OWN CASE OR ANY OTHER JUDGEMENT AS MAY BE RELIED UPON B Y THE ASSESSEE. WITH THESE DIRECTIONS ALL THE GROUNDS RAISED BEFORE US ARE SENT BACK TO THE FILE OF THE LD. CIT (A). 5 I.T.A. NO. 3025/MUM/2013 5. AS A RESULT, THIS APPEAL MAY BE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER WAS PRONOUNCED IN THE OPEN COURT AT THE CONCL USION OF THE HEARING. SD/- SD/- (D.T. GARASIA) (ASHWANI TANEJA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI; DATED: 15 /02/2017 ALINDRA, PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A)- 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI