Bajaj Allianze General Insurance Company Ltd., Pune V. Addl. CIT, Pune

ITA 600/PUN/2008

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 3096 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 7 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-12-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2004-2005
• Appeal Filed On: 02-05-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A S SINGH
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE BEFORE SHRI I.C. SUDHIR AND SHRI D. KARUNAKARA RAO ITA NO. 600/PN/08 (ASSTT. YEAR 2004-05) BAJAJ ALLIANZ GENERAL INSURANCE COMPANY LIMITED, 1 ST FLOOR, GE PLAZA, AIRPORT ROAD, PUNE-411006 PAN NO. AABCB5730G .... APPELLANT VS. ADDL. CIT RANGE-1, PUNE . RESPONDENT C.O NO. 29/PN/08 (ASSTT. YEAR 2004-05) (ARISING OUT OF ITA NO. 600/PN/08) ADDL. CIT RANGE-1, PUNE .... APPELLANT VS. BAJAJ ALLIANZ GENERAL INSURANCE COMPANY LIMITED, 1 ST FLOOR, GE PLAZA, AIRPORT ROAD, PUNE-411006 PAN NO. AABCB5730G . RESPONDENT ASSESSEE BY : SHRI PRAMOD ACHUTHAN DEPARTMENT BY : SHRI A.S. SINGH ORDER PER D. KARUNAKARA RAO AM THIS IS AN APPEAL ( ITA NO. 600/PN/08 ) FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A)-I, PUNE DATED 26-02-2008 FOR T HE A.Y 2005-06 . REVENUE FILED THE CO IN THIS REGARD. 2. AT THE VERY OUTSET, SHRI PRAMOD ACHUTHAN LD. COUNSE L FOR THE ASSESSEE MENTIONED THAT THE ASSESSEE FILED AN APPEAL AGAINST THE ORDER OF THE CIT(A) IN ITA NO. 600/PN/08 & C.O NO. 29/PN/08 A.Y: 2004-05 PAGE 2 OF 3 CONNECTION WITH THE DECISION OF THE CIT(A) RELATING TO THE APPLICABILITY OF THE PROVISIONS OF SEC. 14A VIS--VIS THE CASES COVERED U/ S 44 OF THE ACT RELATING TO INSURANCE BUSINESS . FURTHER HE BROUGHT TO OUT NOTICE THE EXISTENCE OF CRO SS OBJECTION BY THE REVENUE ON THE INTERPRETATION AND TH E EFFECTS OF THE AMENDMENT TO RULE 5(B) OF THE FIRST SCHEDULE. AS PER THE COUNSEL, THE REVENUE IS AGGRIEVED WITH THE DECISION OF THE CIT(A) WHEREIN IT IS HELD BY HIM THAT AFTER DELETION OF RULE 5(B), THE INCOME FROM THE SALE OF I NVESTMENTS CANNOT BE TAXED IN THE CASE OF THE ASSESSEE WHO IS ENGAGED IN OTHER INSURANCE BUSINESS AS MENTIONED IN PART B OF THE FIRST SCHEDULE OF THE INCO ME TAX ACT 1961. THE FACT THAT THE CIT(A) HAS MERELY FOLLOWED HIS ORDER IN EARLIE R YEARS WERE ALSO BROUGHT TO OUT NOTICE BY THE LD. COUNSEL, AFTER MAKING A REFE RENCE TO PARA 5 OF THE IMPUGNED ORDER. FURTHER, LD. COUNSEL MENTIONED THAT BO TH THESE ISSUES STANDS COVERED BY THE ORDER OF THIS BENCH IN THE ASSESSEES O WN CASE FOR THE A.Y 2003- 04 VIDE ITA NO. 1147/PN/07 AND CO NO. 52/PN/07 DATE D 31-08-2009. IN THIS REGARD, LD. COUNSEL TAKE US TO THE VARIOUS PARAS OF THI S ORDER AND MENTIONED THAT SO FAR AS THE EFFECT OF THE AMENDMENT OF RULE 5(B) I S CONCERNED, THE TRIBUNAL IN THE SAID ORDER DATED 31-08-09 CONFIRMED THE FINDING O F THE CIT(A) AND IN SO FAR AS APPLICABILITY OF PROVISIONS OF SEC. 14A TO THE CA SE ARE CONCERNED, IT IS ALSO COVERED BY THE SAID ORDER AND IN FAVOUR OF THE ASSESSEE . THE REVERSAL OF THE ORDER OF THE CIT(A) IN THIS REGARD WAS BROUGHT TO OUR NOT ICE VIDE THE DISCUSSION IN PARA 18 OF THE SAID ORDER OF THE TRIBUNAL. ON THE O THER HAND, LD. DR RELIED ON THE RELEVANT ORDERS OF THE REVENUE. 3. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE SAME . WE HAVE ALSO GONE THROUGH THE TRIBUNAL ORDER IN THE ASSESSEES OWN C ASE DATED 31-08-2009 CITED ABOVE. PARA 18 CONTAIN THE GIST OF THE DECISIO NS OF THE TRIBUNAL AND THEREFORE IN VIEW OF ITS SIGNIFICANCE THE SAME IS REPRO DUCED AS UNDER:- 18. IT MAY NOT BE OUT OF PLACE TO MENTION THAT THE RESPECTED CO ORDINATE BENCH HAS DULY TAKEN THE NOTE OF AN EARLIE R DECISION OF THAT VERY BENCH DECIDED IN THE CASE OF THAT VERY ASSESSEE VID E ORDER DATED 29 TH SEPTEMBER 2004 BEARING ITA NOS. 7815/DEL/1989; 3607 TO 3609/DEL/1990; 5035/DEL/1998 & 3910/DEL/2000 NAMED AS DCIT VS. ORI ENTAL GENERAL INSURANCE CO. LTD. REPORTED IN 92 TTJ 300 (DEL). AS SEEN FROM THE PARAS REPRODUCED ABOVE ON DUE CONSIDERATION OF THE RELEVA NT PROVISIONS AS APPLICABLE TO RESOLVE THIS ISSUE A CONCLUSION WAS D RAWN THAT SINCE THE COURTS HAVE HELD, SEC. 44 CREATES A SPECIAL PROVISI ON IN THE CASES OF ASSESSMENT OF INSURANCE COMPANIES THEREFORE IT WAS NOT PERMISSIBLE TO THE A.O TO TRAVEL BEYOND SEC. 44 OF FIRST SCHEDULE OF I. T. ACT. SINCE THE VIEW HAS ALREADY BEEN EXPRESSED BY RESPECTED CO ORD INATE BENCH THEREFORE WE HAVE NO REASON TO TAKE ANY OTHER VIEW EXCEPT TO FOLLOW THE SAME. WITH THE RESULT WE HEREBY ACCEPT THE ARGUMENT OF LD. AR TO THE ITA NO. 600/PN/08 & C.O NO. 29/PN/08 A.Y: 2004-05 PAGE 3 OF 3 EXTENT THAT IN THE PRESENT SITUATION THE PROVISIONS OF SEC. 14A NEED NOT TO APPLY WHILE GRANTING EXEMPTION TO AN INCOME EARNED ON SALE OF INVESTMENT PRIMARILY BECAUSE OF THE REASON OF THE WITHDRAWAL O R DELETION OF SUB RULE 5(B) TO SCHEDULE FIRST OF SEC. 44 OF I.T. ACT. ONCE WE HAVE TAKEN THIS VIEW THEREFORE THE ENHANCEMENT AS PROPOSED BY LD. CIT(A) IS REVERSED AND THE DIRECTIONS IN THIS REGARD ARE SET ASIDE. RESULTANTL Y GROUND NO. 1 IS ALLOWED CONSEQUENT THEREUPON GROUND NO. 2 AUTOMATICALLY GO ES IN FAVOUR OF THE ASSESSEE. 4. CONSIDERING THE ABOVE, WE ARE OF THE OPINION THAT BOTH THE ISSUES RAISED BY LD. COUNSEL FOR THE ASSESSEE IN THE APPEAL OF THE ASSESSEE AND THE LD. DR FOR THE REVENUE IN THE CO ARE COVERED BY THE SAID ORDER OF THE TRIBUNAL. ACCORDINGLY, THE AO IS DIRECTED TO COMPUTE THE INCOME OF THE ASSESSEE COMPLYING WITH THE RATIO LAID DOWN BY THIS TRIBUNAL IN THE ASS ESSEES OWN CASE FOR THE A.Y 2003-04. ACCORDINGLY, THE REVENUES APPEAL STANDS DISMISSED. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED AND THE C.O OF THE REVENUE IS DISMISSED . ORDER PRONOUNCED ON 10 TH DECEMBER, 2010. SD/- SD/- (I.C. SUDHIR) (D.KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBE R PUNE DATED THE 10 TH DECEMBER, 2010 R COPY OF THE ORDER IS FORWARDED TO : 1. ASSESSEE 2. ADDL. CIT, RANGE-1, PUNE 3. CIT(A)-I, PUNE 4. CIT-I, PUNE 5. D.R. ITAT B BENCH BY ORDER ASSISTANT REGISTRAR I.T.A.T PUNE