DCIT 10(1), MUMBAI V. ICICI LOMBARD GENERAL INSURANCE CO. P.LTD, MUMBAI

ITA 6837/MUM/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 2696 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-10-2016
• Appeal Filed By: Department
• Bench Allotted: I
• Assessment Year: 2005-2006
• Appeal Filed On: 10-11-2014
• Court: TRIBUNAL
• Assessee Lawyers: ARATI VISANJI
• Keywords: Transfer pricing; Deemed to accrue or arise in india; Permanent establishment
• Section: 43B; 143(3); 142(1); 115JB; 263

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES, I MUMBAI , , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI MANOJ KUMAR AGGARWAL, ACCOUNTANT MEMBER ITA NOS.6837 & 6832/MUM/2014 ASSESSMENT YEARS: 2005-06 & 2009-10 DCIT-10(1), 453, 4 TH FLOOR, AAYAKAR BHAVAN, M.K. MARG, MUMBAI-400020 / VS. M/S ICICI LOMBARD GENERAL INSURANCE CO PVT LTD. ICICI BANK TOWERS, BANDA KURLA COMPLEX, BANDRA EAST, MUMBAI-400051 ( / REVENUE) ( #$% & /ASSESSEE) PAN. NO. AAACI7904G ' & ( / DAT E OF HEARING : 04/10/2016 ' & ( / DATE OF ORDER: 04/10/2016 ! / REVENUE BY SHRI B.C.S. NAIK CIT-DR #$% & ! / ASSESSEE BY MS. ARATI VISANJI ITA NO.6832 & 6837/MUM/2014 ICICI LOMBARD GENERAL INSURANCE CO. PVT. LTD. 2 / O R D E R PER JOGINDER SINGH(JUDICIAL MEMBER) BOTH THESE APPEALS ARE BY THE REVENUE FOR ASSESSMEN T YEAR 2005-06 & 2009-10, AGGRIEVED BY THE IMPUGNED O RDERS BOTH DATED 14/08/2014 OF THE LD. FIRST APPELLATE AU THORITY, MUMBAI. 2. IN THE APPEAL FOR ASSESSMENT YEAR 2005-06 (ITA NO.6837/MUM/2014), THE GROUND RAISED PERTAINS TO HO LDING THAT THERE WAS NO NEED TO DEDUCT TDS ON THE PAYMENT S OF RS.16,85,47,839/-, MADE BY THE ASSESSEE TO M/S ODYS SEY AMERICA REINSURANCE CORPORATION, SINGAPORE, WHICH W AS DISALLOWED BY ASSESSING OFFICER U/S 40(A)(IA) OF TH E INCOME TAX ACT, 1961 (HEREINAFTER THE ACT). 2.1. DURING HEARING, THE LD. COUNSEL FOR THE ASSES SEE, MS. ARATI VISANJI, AT THE OUTSET, CLAIMED THAT THE IMPUGNED ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY HOLDI NG THAT THE PROCEEDINGS U/S 263 OF THE ACT WERE QUASHED BY THE TRIBUNAL, THEREFORE, THE DEPARTMENT APPEAL WILL NOT SURVIVE. THIS CLAIM OF THE ASSESSEE WAS NOT CONTROVERTED BY LD. DR, SHRI V.C.S. NAIK. 2.2. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS , IN BRIEF, ARE THAT THE ASSESSEE IS IN THE BUSINESS OF GENERAL INSURANCE, DECLARED TOTAL INCOME OF RS.14,70,36,890 /- IN ITS ITA NO.6832 & 6837/MUM/2014 ICICI LOMBARD GENERAL INSURANCE CO. PVT. LTD. 3 RETURN FILED ON 18/10/2005. THE REGULAR ASSESSMENT U/S 143(3), DETERMINING TOTAL INCOME AT RS.46,29,51,572 /- WAS COMPLETED ON 12/12/2008. THE LD. COMMISSIONER INVOK ED REVISIONAL JURISDICTION U/S 263 OF THE ACT DATED 29 /03/2011 DIRECTING THE ASSESSING OFFICER TO FRAME FRESH ASSE SSMENT AND EXAMINED THE CLAIM OF THE ASSESSEE WITH RESPECT TO PAYMENTS MADE TO M/S ODYSSEY AMERICA REINSURANCE CORPORATION, SINGAPORE, AMOUNTING TO RS.16,85,47,83 9/-, FOR PROVIDING REINSURANCE BUSINESS WITHOUT DEDUCTIN G TAX AT SOURCE U/S 40(A)(IA) OF THE ACT. THE ASSESSING OFFI CER UPHELD THE ADDITIONS U/S 40(A)(IA) OF THE ACT BUT THE SAME WERE DELETED BY LD. COMMISSIONER OF INCOME TAX (APPEAL) RELYING UPON ITAT DECISION IN ASSESSEES OWN CASE FOR ASSES SMENT YEAR 2004-05 IN ITA NO.2769/MUM/2011; 152 ITD 855 (MUM.). IN THE MEANTIME, THE ASSESSEE CHALLENGED T HE INVOKING OF REVISIONAL POWER BY LD. COMMISSIONER OF INCOME TAX IN ITA NO.5777/MUM/2011, WHEREIN, THE TRIBUNAL QUASHED THE PROCEEDINGS U/S 263 OF THE ACT BY MAKIN G FOLLOWING OBSERVATIONS:- 1. THIS APPEAL BY THE ASSESSEE IS PREFERRED AGAIN ST THE ORDER OF THE LD. CIT-10, MUMBAI DT.29.3.2011 PERTAINING TO A .Y.2005-06. 2. THE GRIEVANCE OF THE ASSESSEE IS THAT THE LD. CI T ERRED IN PASSING AN ORDER U/S. 263 ON THE GROUND THAT THE OR DER PASSED BY THE AO U/S. 143(3) OF THE ACT IS ERRONEOUS AND PREJ UDICIAL TO THE INTEREST OF THE REVENUE. THE ASSESSEE IS FURTHER AG GRIEVED BY THE DIRECTION OF THE CIT TO THE AO TO REFRAME THE ASSES SMENT TO DISALLOW THE EXPENDITURE FOR PAYMENT OF REINSURANCE PREMIUM TO ASSOCIATED ENTERPRISES U/S. 40(A)(I) OF THE ACT. 3. THE ASSESSEE IS ENGAGED IN GENERAL INSURANCE BUS INESS. THE ASSESSEE OFFERS INSURANCE IN THE FORM OF FIRE, ENGI NEERING, HEALTH, MOTOR, TRAVEL, MARINE AND LIABILITY INSURANCE POLIC IES. THE RETURN OF ITA NO.6832 & 6837/MUM/2014 ICICI LOMBARD GENERAL INSURANCE CO. PVT. LTD. 4 INCOME FOR THE YEAR WAS FILED ON 18.10.2005 DECLARI NG TOTAL INCOME AT RS. 14.70 CRORES. THE BOOK PROFIT WAS COMPUTED U /S. 115JB OF THE ACT AT RS. 44.03. CRORES. THE ASSESSMENT WAS CO MPLETED U/S. 143(3) OF THE ACT. THE ASSESSED INCOME WAS COMPUTED AT RS. 46.29 CRORES. SINCE THE TAX PAYABLE ON THE TOTAL IN COME COMPUTED UNDER THE NORMAL PROVISION OF THE ACT WAS GREATER T HAN THE TAX PAYABLE ON THE BOOK PROFIT U/S. 115JB, THE TOTAL IN COME COMPUTED UNDER THE NORMAL PROVISION WAS TAKEN AS THE TOTAL I NCOME OF THE ASSESSEE. 3.1. INVOKING THE POWERS CONFERRED UPON HIM VIDE SE C. 263 OF THE ACT, THE CIT WAS OF THE FIRM BELIEF THAT THE ASSESS EE HAS MADE PAYMENT OF RS. 16,85,47,839/- WITHOUT DEDUCTING TAX AT SOURCE TO ITS ASSOCIATED ENTERPRISES M/S. ODYSSEY AMERICA REI NSURANCE CORPORATION, SINGAPORE FOR PROVIDING REINSURANCE BU SINESS. ACCORDING TO THE CIT, THIS PAYMENT WAS NOT CONSIDER ED AND EXAMINED BY THE AO FOR DISALLOWANCE U/S. 40(A)(I) O F THE ACT. 3.2. THE ASSESSEE WAS ASKED TO EXPLAIN WHY THE ORDE R U/S. 143(3) DT. 12.12.2008 SHOULD NOT BE TREATED AS ERRONEOUS A ND PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE ASSESSEE FILED A DETAILED REPLY QUESTIONING THE CIT FOR INVOKING PROVISIONS OF SEC. 263 OF THE ACT. IT WAS EXPLAINED THAT NO TAX WAS DEDUCTED AT SOURCE ON THE PAYMENT OF RS. 16.85 CRORES TO ITS ASSOCIATED ENTER PRISES AS NO INCOME ACCRUED OR ARISEN OR IS DEEMED TO ACCRUE OR ARISE IN INDIA AND PROVISIONS OF SEC. 9 OF THE ACT ARE NOT APPLICA BLE. IT WAS FURTHER EXPLAINED THAT THE SAID PAYMENT WAS EXEMPT UNDER ARTICLE 7 OF THE DOUBLE TAXATION AVOIDANCE AGREEMENT BETWEE N INDIA AND SINGAPORE. IT WAS FURTHER EXPLAINED THAT THE PAYMEN T TO ASSOCIATED ENTERPRISE WAS MADE IN ACCORDANCE WITH THE CBDT CIR CULAR NO. 759 DT. 18.11.1997 AND CBDT CIRCULAR NO. 10 DT. 9.10.20 02. IT WAS BROUGHT TO THE NOTICE OF THE CIT THAT THE ASSESSEE HAS OBTAINED A DECLARATION FROM M/S. ODYSSEY AMERICA REINSURANCE C ORPORATION, SINGAPORE THAT IT IS A NON RESIDENT ENGAGED IN THE BUSINESS OF REINSURANCE OUTSIDE INDIA AND IT DOES NOT HAVE AN O FFICE OR PERMANENT ESTABLISHMENT OR A FIXED BASE IN INDIA. F OR THIS, THE ASSESSEE DREW SUPPORT FROM THE DECISION OF THE HON BLE SUPREME COURT IN THE CASE OF TOSHUKA LTD. 126 ITR 525 WHERE IN IT HAS BEEN HELD BY THE HONBLE SUPREME COURT THAT IF NO OPERAT IONS ARE CARRIED OUT IN TAXABLE TERRITORIES, IT FOLLOWS THAT INCOME ACCRUING OR ARISING ABROAD THROUGH OR FORM ANY BUSINESS CONNECT ION IN INDIA CANNOT BE DEEMED TO ACCRUE OR ARISE IN INDIA. 3.3. THE SUBMISSIONS MADE BY THE ASSESSEE DID NOT F IND ANY FAVOUR WITH THE CIT. RELYING UPON CERTAIN JUDICIAL DECISIO NS, THE CIT CAME TO THE CONCLUSION THAT THE ORDER DT. 12.12.2008 IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REV ENUE. THE CIT PROCEEDED BY CANCELLING THE SAID ORDER WITH A DIREC TION TO THE AO TO FRAME A FRESH ASSESSMENT. 4. AGGRIEVED BY THIS THE ASSESSEE IS BEFORE US. 5. THE LD. COUNSEL FOR THE ASSESSEE DREW OUR ATTENT ION TO THE NOTICE ISSUED BY THE AO U/S. 142(1) OF THE ACT DT. 18 TH AUGUST, 2008. IT IS THE SAY OF THE LD. COUNSEL THAT DURING THE COURSE OF THE SCRUTINY ASSESSMENT PROCEEDINGS, THE AO HAD MADE SP ECIFIC ITA NO.6832 & 6837/MUM/2014 ICICI LOMBARD GENERAL INSURANCE CO. PVT. LTD. 5 ENQUIRIES IN RELATION TO PAYMENTS/EXPENSES ON WHICH TAX WAS DEDUCTIBLE AT SOURCE, DETAILS OF AMOUNT REMITTED/SE NT ABROAD AND DETAILED ENQUIRIES WERE MADE IN CONNECTION WITH THE TRANSACTIONS REPORTED IN THE FORM 3CEB. THE LD. COUNSEL CONTINUE D BY SAYING THAT NECESSARY ENQUIRIES WERE MADE BY THE AO AGAINS T WHICH THE ASSESSEE FILED DETAILED REPLY WHICH HAS BEEN CONSID ERED BY THE AO BEFORE FRAMING THE ASSESSMENT U/S. 143(3) OF THE AC T. THEREFORE, THE ORDER PASSED BY THE CIT U/S. 263 IS AGAINST THE FACTS OF THE CASE. 6. PER CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE STRONGLY SUPPORTED THE ORDER OF THE CIT. 7. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS AND PERUSED THE ASSESSMENT ORDER AND THE ORDER OF THE LEARNED C OMMISSIONER. THE FIRST THING WHICH HAS TO BE CONSIDERED IS WHETH ER THE LEARNED COMMISSIONER HAS RIGHTLY ASSUMED THE POWER UNDER SE CTION 263 OF THE ACT. THE HONBLE SUPREME COURT IN MALABAR INDUS TRIAL CO. LTD. 243 ITR 83 HAS LAID DOWN THE FOLLOWING RATIO:- A BARE READING OF SECTION 263 OF THE INCOME-TAX AC T, 1961, MAKES IT CLEAR THAT THE PREREQUISITE FOR THE EXERCISE OF JURISDICTION BY THE COMMISSIONER SUO MOTU UNDER IT, IS THAT THE ORDER O F THE INCOME- TAX OFFICER IS ERRONEOUS IN SO FAR AS IT IS PREJUDI CIAL TO THE INTERESTS OF THE REVENUE. THE COMMISSIONER HAS TO BE SATISFIE D OF TWIN CONDITIONS, NAMELY, (I) THE ORDER OF THE ASSESSING OFFICER SOUGHT TO BE REVISED IS ERRONEOUS; AND (II) IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. IF ONE OF THEM IS ABSENTIF THE ORDER OF THE INCOME- TAX OFFICER IS ERRONEOUS BUT IS NOT PREJUDICIAL TO THE REVENUE OR IF IT IS NOT ERRONEOUS BUT IS PREJUDICIAL TO THE REVENUE RECOURSE CANNOT BE HAD TO SECTION 263(1) OF THE ACT. THE PRO VISION CANNOT BE INVOKED TO CORRECT EACH AND EVERY TYPE OF MISTAK E OR ERROR COMMITTED BY THE ASSESSING OFFICER; IT IS ONLY WHEN AN ORDER IS ERRONEOUS THAT THE SECTION WILL BE ATTRACTED. AN IN CORRECT ASSUMPTION OF FACTS OR AN INCORRECT APPLICATION OF LAW WILL SATISFY THE REQUIREMENT OF THE ORDER BEING ERRONEOUS 8. NOW, LET US SEE IN THE LIGHT OF THE ABOVE RATIO WHETHER THE ASSESSMENT HAS BEEN MADE ON AN INCORRECT ASSUMPTION OF FACTS OR AN INCORRECT APPLICATION OF LAW. THE FIRST OBSERVAT ION OF THE CIT THAT THE ASSESSEE HAD MADE PAYMENT OF RS. 16.85 CRORES T O ITS ASSOCIATED ENTERPRISES M/S. ODYSSEY AMERICA REINSUR ANCE CORPORATION, SINGAPORE WITHOUT DEDUCTING TAX AT SOU RCE IS HIT BY THE PROVISIONS OF SEC. 40(A)(I) OF THE ACT. ON IDEN TICAL ISSUE IN THE IMMEDIATELY PRECEDING ASSESSMENT YEAR I.E. 2004-05, THE MATTER TRAVELLED UPTO THE TRIBUNAL AND THE TRIBUNAL DECIDE D THE ISSUE AGAINST THE REVENUE AND IN FAVOUR OF THE ASSESSEE V IDE ITA NO. 2769/M/2011 DT. 30.8.2013. AT PARA 2.3 OF ITS ORDER THE TRIBUNAL INTER ALIA HELD AS UNDER: THE ASSESSEE IN THIS CASE HAD OBTAINED REINSURANCE COVERED FROM SINGAPORE COMPANY WHICH WAS ENGAGED IN THE BUSINESS OF REINSURANCE OUTSIDE INDIA. THE PAYMENT MADE BY THE ASSESSEE TO THE SINGAPORE COMPANY WAS NOT FOR OBTAINING ANY TECHNICAL/MANAGERIAL SERVICES OR FOR USE OF ANY PRO PERTY OR ASSET. THEREFORE THE PAYMENT COULD NOT BE CONSIDERED AS RO YALTY OR FTS. ITA NO.6832 & 6837/MUM/2014 ICICI LOMBARD GENERAL INSURANCE CO. PVT. LTD. 6 THE PAYMENT COULD ONLY BE CONSIDERED AS BUSINESS IN COME IN THE HANDS OF THE SINGAPORE COMPANY WHICH COULD BE TAXED IN INDIA ONLY IF THE SAID COMPANY HAD PE IN INDIA. THE CLAIM OF THE ASSESSEE THAT THE SINGAPORE COMPANY DID NOT HAVE ANY ESTABLI SHMENT OR EMPLOYEE IN INDIA HAS NOT BEEN CONTROVERTED BEFORE US. THEREFORE, IN OUR VIEW THE PAYMENT TO THE SINGAPORE COMPANY WA S NOT TAXABLE IN INDIA. THE TRIBUNAL FINALLY CONCLUDED BY CONFIRMING THE OR DER OF THE CIT(A) DIRECTING THE AO TO DELETE THE ADDITION. 10. CONSIDERING THE DECISION OF THE CO ORDINATE BEN CH ON IDENTICAL ISSUE, IT CAN BE SAFELY CONCLUDED THAT THE ASSESSME NT ORDER HAS NOT BEEN MADE ON AN INCORRECT APPLICATION OF LAW. ON FA CTS, A PERUSAL OF THE QUESTIONNAIRE ISSUED ALONG WITH THE NOTICE U /S. 142(1) OF THE ACT DT. 18 TH AUGUST, 2008 SHOWS THAT VIDE QUESTION NO. 29 THE AO HAD SOUGHT DETAILS OF ALL PAYMENTS/EXPENSES ON WHIC H TAX WAS DEDUCTIBLE AT SOURCE AS PER THE PROVISIONS OF THE A CT. QUESTION NO. 35 WAS WITH RESPECT TO DETAILS OF AMOUNT REMITTED/S ENT ABROAD SUPPORTED BY RBI PRESCRIBED CERTIFICATE ISSUED BY C .A U/S. 195 OF THE ACT, 1961 AND QUESTION NO. 37 WAS IN CONNECTION WITH THE TRANSACTIONS REPORTED IN THE FORM 3CEB. THE ASSESSE E HAD FILED A DETAILED REPLY IN RESPECT OF THESE QUERIES RAISED D URING THE ASSESSMENT PROCEEDINGS. THUS THE OBSERVATION OF THE CIT THAT THE PAYMENT OF RS. 16.85 CRORES TO ITS ASSOCIATED ENTER PRISE HAS NOT BEEN CONSIDERED AND EXAMINED BY THE AO FOR DISALLOW ANCE U/S. 40(A)(I) OF THE ACT IS INCORRECT IN THE LIGHT OF TH E FACTS STATED HEREINABOVE. 10.1. THE AO HAS TAKEN A VIEW WHICH MAY BE DIFFEREN T FROM THE VIEW OF THE LD. COMMISSIONER AND ASSUMING THAT THE VIEW TAKEN BY THE AO IS A LOSS TO THE REVENUE BUT THE HONBLE SUP REME COURT IN MALABAR INDUSTRIAL CO. LTD. (SUPRA) HAS HELD THAT EVERY LOSS OF REVENUE AS A CONSEQUENCE OF AN ORDER OF THE AO CANN OT BE TREATED AS PREJUDICIAL TO THE INTEREST OF THE REVENUE, FOR E.G. WHEN AN INCOME TAX OFFICER ADOPTED ONE OF THE COURSES PERMI SSIBLE IN LAW AND IT HAS RESULTED IN LOSS OF REVENUE OR WHERE TWO VIEWS ARE POSSIBLE AND THE INCOME TAX OFFICER HAS TAKEN ONE V IEW WITH WHICH THE LD. COMMISSIONER DOES NOT AGREE, IT CANNOT BE T REATED AS AN ORDER WHICH IS ERRONEOUS OR PREJUDICIAL TO THE INTE REST OF REVENUE UNLESS THE VIEW TAKEN BY THE INCOME TAX OFFICER IS UNSUSTAINABLE IN LAW. 10.11. THE BOMBAY HIGH COURT IN CIT VS GABRIAL INDI A LTD., (1993) 203 ITR 108 HAS HELD THAT THE DECISION OF THE INCO ME TAX OFFICER COULD NOT BE HELD TO BE ERRONEOUS SIMPLY BECAUSE IN HIS ORDER, HE DID NOT MAKE AN ELABORATE DISCUSSION IN THAT REGARD . CONSIDERING THE FACTS IN TOTALITY IN THE LIGHT OF THE JUDICIAL DECISIONS DISCUSSED HEREINABOVE, IN OUR UNDERSTANDING OF LAW, THE ASSES SMENT ORDER IS NEITHER ERRONEOUS NOR PREJUDICIAL TO THE INTEREST O F THE REVENUE. WE, THEREFORE, SET ASIDE THE IMPUGNED ORDER PASSED BY THE LD. COMMISSIONER U/S. 263 AND RESTORE THAT OF THE ASSES SING OFFICER PASSED U/S. 143(3) OF THE ACT. 12. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ITA NO.6832 & 6837/MUM/2014 ICICI LOMBARD GENERAL INSURANCE CO. PVT. LTD. 7 2.3. THUS, THE TRIBUNAL BY THE AFORESAID ORDER HE LD THAT INVOCATION OF REVISIONAL JURISDICTION WAS NOT VALID. IN VIEW OF THIS UNCONTROVERTED FACTUAL MATRIX, THE APP EAL OF THE REVENUE IS DISMISSED AS IN-FRUCTUOUS. 3. SO FAR AS, ITA NO.6832/MUM/2014, ASSESSMENT YEAR 2009-10 IS CONCERNED, THE ONLY GROUND RAISED B Y THE REVENUE PERTAINS TO EXEMPTION CLAIMED U/S 10(15), 1 0(34) AND 10(38) OF THE ACT. THE LD. COUNSEL FOR THE ASS ESSEE CLAIMED THAT THIS ISSUE IS ALREADY COVERED IN FAVOU R OF THE ASSESSEE BY THE DECISION OF THE TRIBUNAL FOR ASSESS MENT YEAR 2008-09 (ITA NO.3698/MUM/2013) IN ASSESSEES OWN CA SE. THIS FACTUAL MATRIX WAS CONSENTED TO BE CORRECT BY THE LD. DR. 3.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN VIEW O F THE ABOVE, WE ARE REPRODUCING HEREUNDER THE RELEVANT PO RTION FROM THE AFORESAID ORDER DATED 31/08/2016 (ITA NO.3698/MUM/2013) FOR READY REFERENCE AND ANALYSIS: - 2. THE CAPTIONED ASSESSEE IS ENGAGED IN THE BUSINE SS OF GENERAL INSURANCE AND FOR ASSESSMENT YEAR UNDER CON SIDERATION, IT FILED A RETURN OF INCOME DECLARING AN INCOME OF RS.111,10,82,730/-. THE ASSESSING OFFICER ASSESSED THE TOTAL INCOME AT RS.224,99,28,526/- UNDER THE NORMAL PROVI SIONS OF THE ACT. THIS INCOME WAS DEDUCED AFTER DISALLOWING THE EXEMPTIONS ITA NO.6832 & 6837/MUM/2014 ICICI LOMBARD GENERAL INSURANCE CO. PVT. LTD. 8 CLAIMED BY THE ASSESSEE U/S 10(38), 10(15) AND 10(3 4) OF THE ACT ON ACCOUNT OF PROFIT ON SALE OF INVESTMENTS RS.54 ,18,03,880/-; INTEREST RS.14,11,04,910/-; AND, DIVIDEND RS.5, 87,77,006/- RESPECTIVELY. ADDITIONALLY, THE ASSESSING OFFICER ALSO DISALLOWED RS.39,71,60,000/- DEBITED IN THE PROFIT & LOSS ACCO UNT ON ACCOUNT OF PROVISION FOR EXPENSES ON THE GROUND THA T SUCH EXPENSES COULD NOT BE SAID TO HAVE ACCRUED AS IT WA S A MERE PROVISION. THE SUM AND SUBSTANCE OF THE STAND OF A SSESSING OFFICER WAS THAT THE INCOME OF ASSESSEE FROM THE BU SINESS OF INSURANCE WAS REQUIRED TO BE DETERMINED IN TERMS OF SEC. 44 OF THE ACT READ WITH FIRST SCHEDULE OF THE ACT AND ACC ORDINGLY, THE EXEMPTIONS UNDER SEC. 10(38) OR SEC. 10(15) OR SEC. 10(34) OF THE ACT WERE NOT APPLICABLE. THE AFORESAID ACTION OF THE ASSESSING OFFICER WAS CARRIED IN APPEAL BEFORE THE CIT(A) ON VARIOUS ISSUES. ON SOME ISSUES, CIT(A) HAS ALLOWED RELIEF AGAINST WHICH REVENUE IS IN APPEAL BEFORE US, WHERE AS ON ISSUES WHERE THE ACTION OF ASSESSING OFFICER HAS BEEN UPHE LD, ASSESSEE IS IN APPEAL BEFORE US. 3. IN THIS BACKGROUND, WE MAY NOW TAKE UP THE APPEA L OF REVENUE, WHEREIN THE GROUNDS OF APPEAL READ AS UNDE R :- 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT(A)'S ERRED IN 1. I) ALLOWING THE DEDUCTION U/S.10(38) FOR GAINS/L OSS ON SALE OF INVESTMENT AGGREGATING TO RS.54,18,03,880/- ; THEREBY IGNORING THE FACT THAT THE ASSESSEE COMPANY IS ENGA GED IN THE INSURANCE BUSINESS AND THAT COMPUTATION OF ITS INCO ME FROM INSURANCE BUSINESS IS TO BE GOVERNED AS PER SPECIAL SECTION 44 OF THE INCOME TAX ACT R.W.RULE 5 CONTAINED IN THE F IRST SCHEDULE. ITA NO.6832 & 6837/MUM/2014 ICICI LOMBARD GENERAL INSURANCE CO. PVT. LTD. 9 II) IN NOT APPRECIATING THAT THE PROVISIONS OF SEC . 10(15), 10(34) AND 10(38) WERE NOT APPLICABLE IN THE CASE O F ASSESSEE COMPANY. 2. I) DELETING THE DISALLOWANCE OF AO MADE ON ACCOU NT OF INTEREST RS. 14,11,04,910/ - CLAIMED BY ASSESSEE COMPANY AS EXEMPT U/S. 10(15) AND DIVIDEND RS.5,87,77,006/- EXEMPT U/S. 10(34/35) OF THE ACT IGNORING THE FACT THAT TH E ASSESSEE COMPANY IS ENGAGED IN THE INSURANCE BUSINESS AND TH AT COMPUTATION OF ITS INCOME FROM INSURANCE BUSINESS I S TO BE GOVERNED AS PER SPECIAL SECTION 44 OF THE INCOME TA X ACT R.W.RULE 5 CONTAINED IN THE FIRST SCHEDULE. II) IN NOT APPRECIATING THAT THE PROVISIONS OF SEC . 10(15), 10(34) AND 10(38) WERE NOT APPLICABLE IN THE CASE O F ASSESSEE COMPANY. XXXXXXXXXXXXXXXXXXXXXXXX 4. THE ISSUE RAISED BY THE REVENUE IN GROUND OF APP EAL NO. 1 ARISES FROM THE ACTION OF CIT(A) IN HOLDING THAT ASSESSEE WAS ELIGIBLE FOR CLAIM OF EXEMPTION U/S 10(38) OF THE A CT WITH RESPECT TO GAIN/LOSS ON SALE OF INVESTMENTS AGGREGATING TO RS.54,18,03,880/-. ON THIS ASPECT, IT WAS A COMMON POINT BETWEEN THE PARTIES THAT SUCH ISSUE HAD COME UP BEF ORE THE TRIBUNAL IN EARLIER ASSESSMENT YEARS ALSO AND THE C LAIM OF THE ASSESSEE HAS BEEN UPHELD. IN THIS CONTEXT, IT IS N OTICED THAT CIT(A) HAS FOLLOWED THE DECISION OF THE TRIBUNAL FO R ASSESSMENT YEAR 2003-04 VIDE ORDER DATED 10.10.2012 IN ITA NO. 2398/MUM/2009. THE RELEVANT DISCUSSION IN THE ORDE R OF TRIBUNAL DATED 10.10.2012 ( SUPRA ) READS AS UNDER :- ITA NO.6832 & 6837/MUM/2014 ICICI LOMBARD GENERAL INSURANCE CO. PVT. LTD. 10 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WEL L AS THE RELEVANT MATERIAL ON RECORD. THERE IS A SPECIAL PROVISION FOR COMPUTATION OF INCOME CHARGEABLE UNDER THE HEAD PR OFITS AND GAIN INTER-ALIA IN THE BUSINESS 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. T HE PROFITS AND GAINS OF BUSINESS OF INSURANCE OTHER THAN THE LIFE INSURANCE SHALL BE COMPUTED AS PER RULE 5 OF FIRST SCHEDULE A S UNDER: 5. THE PROFITS AND GAINS OF ANY BUSINESS OF INSURAN CE OTHER THAN LIFE INSURANCE SHALL BE TAKEN TO BE THE PROFIT BEFO RE TAX AND APPROPRIATIONS AS DISCLOSED IN THE PROFIT AND LOSS ACCOUNT PREPARED IN ACCORDANCE WITH THE PROVISIONS OF THE I NSURANCE ACT, 1938 (4 OF 1938) OR THE RULES MADE THEREUNDER OR THE PROVISIONS OF THE INSURANCE REGULATORY AND DEVELOPM ENT AUTHORITY ACT, 1999 (4 OF 1999) OR THE REGULATIONS MADE THEREUNDER, SUBJECT TO THE FOLLOWING ADJUSTMENTS; A. SUBJECT TO THE OTHER PROVISIONS OF THIS RULE, AN Y EXPENDITURE OR ALLOWANCE INCLUDING ANY AMOUNT DEBITED TO THE PROFI T AND LOSS ACCOUNT EITHER BY WAY OF A PROVISION FOR ANY TAX, D IVIDEND, RESERVE OR ANY OTHER PROVISION AS MAY BE PRESCRIBED WHICH IS NOT ADMISSIBLE UNDER THE PROVISIONS OF SECTIONS 30 TO 43B IN COMPUTING THE PROFITS AND GAINS OF A BUSINESS SHALL BE ADDED BACK; B. (I) ANY GAIN OR LOSS ON REALISATION OF INVESTMEN TS SHALL BE ADDED OR DEDUCTED, AS THE CASE MAY BE, IF SUCH GAIN OR LO SS IS NOT CREDITED OR DEBITED TO THE PROFIT AND LOSS ACCOUNT; (II) ANY PROVISION FOR DIMINUTION IN THE VALUE OF INVESTMENT DEBITED TO THE PROFIT AND LOSS ACCOUNT, SHALL BE AD DED BACK; C. SUCH AMOUNT CARRIED OVER TO A RESERVE FOR UNEXPI RED RISKS AS MAY BE PRESCRIBED IN THIS BEHALF SHALL BE ALLOWED A S A DEDUCTION. 5.1 THE BARE READING OF THE AMENDED PROVISIONS OF R ULE 5 OF FIRST SCHEDULE MAKES IT CLEAR THAT THE PROFITS A ND GAINS SHALL BE TAKEN TO BE THE PROFIT BEFORE THE TAX AND APPROP RIATELY DISCLOSED IN THE P&L ACCOUNT PREPARED IN ACCORDANCE WITH THE INSURANCE ACT, 1938 OR THE RULE MADE THERE UNDER OR THE PROVISIONS OF IRDA ACT. THERE IS NO DISPUTE THAT TH E ASSESSEE BEFORE US HAS INCLUDED THE PROFIT ON SALE OF INVEST MENTS IN THE PROFIT AND GAIN AS DECLARED IN THE ACCOUNTS PREPARE D 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 INVESTMENTS IS NOT REQUIRED TO BE INCLUDED IN THE P &L ACCOUNT ITA NO.6832 & 6837/MUM/2014 ICICI LOMBARD GENERAL INSURANCE CO. PVT. LTD. 11 PREPARED IN ACCORDANCE WITH THE PROVISIONS OF INSUR ANCE 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 INSURANCE 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 INVE STMENT 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 INVESTMENTS IN THE P&L ACCOUNT PREPARED AS PER THE PROVISIONS OF THE INSUR ANCE ACT, 1938, THEN THE SAID AMOUNT CANNOT BE REDUCED WHILE COMPUTING THE INCOME AS PER PROVISIONS OF SEC. 44 R.W FIRST S CHEDULE OF THE I T ACT. 5.2 HOWEVER, IN THE SERIES OF DECISIONS OF THE TRIB UNAL A VIEW HAS BEEN TAKEN THAT THE AMENDMENT VIDE FINANCE ACT 1988 W.E.F 1.4.89, THE SUB RULE (B) OF RULE 5 OF FI RST SCHEDULE WAS OMITTED WITH THE PURPOSE TO GRAND EXEMPTION TO THE INSURANCE COMPANIES WITH REGARD TO THE PROFIT ON SA LE OF INVESTMENTS. THE TRIBUNAL HAS TAKEN NOTE OF THE FAC T THAT IN THE COROLLARY, IT HAS BEEN PROVIDED IN THE CIRCULAR NO. 528 DATED 16.12.1988 THAT THE LOSS INCURRED BY THE GENERAL IN SURANCE COMPANIES ON REALIZATION OF INVESTMENT SHALL NOT BE ALLOWED AS DEDUCTION 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 AC IT IN ITA NO.2597/MUM/2009 AFTER CONSIDERING THE EARLIER DECI SIONS OF THE TRIBUNAL HAS HELD IN PARAS 18 TO 20 AS UNDER: 18. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENT IONS. THERE IS NO DISPUTE THAT UNDER THE GUIDELINES ISSUED BY T HE IRDA (AUDITORS REPORT) REGULATIONS OF 2002, FOR PREPARAT ION OF FINANCIAL STATEMENTS, THE PROFIT ON SALE OF INVESTM ENTS IS TO BE CREDITED TO THE PROFIT AND LOSS ACCOUNT OF THE INSU RANCE COMPANY. THERE IS ALSO NO DISPUTE THAT THE ASSESSEE HAS CREDITED THE PROFIT AND LOSS ACCOUNT WITH SUCH PROF IT THE QUESTION IS WHETHER SUCH PROFIT CAN BE EXCLUDED AND EXEMPTION CAN BE CLAIMED. RULE 5(B), AS IT STOOD BEFORE BEING OMITTED FROM 01.04.1989, WAS AS FOLLOWS: - ANY AMOUNT EITHER WRITTEN OFF OR RESERVED IN THE A CCOUNTS TO MEET DEPREDATION OF OR LOSS ON THE REALIZATION OF I NVESTMENTS SHALL BE ALLOWED AS A DEDUCTION, AND ANY SUMS TAKEN CREDIT FOR ITA NO.6832 & 6837/MUM/2014 ICICI LOMBARD GENERAL INSURANCE CO. PVT. LTD. 12 IN THE ACCOUNTS ON ACCOUNT OF APPRECIATION OF OR GA INS ON THE REALIZATION OF INVESTMENTS SHALL BE TREATED AS PART OF THE PROFITS AND GAINS; PROVIDED THAT THE ASSESSING OFFICER IS SATISFIED AB OUT THE REASONABLENESS OF THE AMOUNT WRITTEN OFF OR RESERVE D IN THE ACCOUNTS, AS THE CASE MAY BE, TO MEET DEPREDATION O F OR LOSS ON THE REALIZATION OF INVESTMENT. THE ARGUMENT ON BEHALF OF THE ASSESSEE PRIMARILY IS THAT WHEN THE RULES FOR PREPARATION OF THE FINAL ACCOUNTS PRO VIDE THAT THE PROFIT ON SALE OF INVESTMENTS, SHOULD BE SHOWN IN T HE CREDIT SIDE OF THE PROFIT AND LOSS ACCOUNT, THEN THERE WAS NO Q UESTION OF RULE 5(B) BEING APPLICABLE AND THAT WAS THE REASON WHY THE SAID RULE WAS OMITTED WITH EFFECT FROM 01.04.1989 AND TH E EFFECT OF THE OMISSION IS THAT WHERE THE PROFIT AND LOSS ACCO UNT ALREADY INCLUDES THE PROFIT ON SALE OF INVESTMENTS, THE SAM E SHALL STAND EXCLUDED. THE EFFECT OF THE OMISSION OF THE RULE WA S CONSIDERED BY THE PUNE BENCH OF THE TRIBUNAL IN ITS ORDER DATE D 31 AUGUST 2009, IN THE CASE OF BAJAJ ALLIANZ GENERAL INSURANC E COMPANY, IN ITA NO: 1447/PN/2007 AND CO NO:521PN12007 (ASSESSMENT YEAR 2003-04). A COPY OF THE SAID ORDER HAS BEEN FILED BEFORE US. THE TRIBUNAL HAS ALSO CONSIDERED T HE CIRCULAR NO.528 DATED 16.12.1988. AFTER ANALYZING THE IMPACT OF THE OMISSION OF RULE 5(B) AND THE CIRCULAR, THE TRIBUNA L HELD AS UNDER. 8. A CONCLUSION CAN BE DRAWN ON THE BASIS OF THE A BOVE ELABORATE DISCUSSION THAT THE DELETION OF SUB RULE (B) FROM RULE 5 OF THE FIRST SCHEDULE WAS WITH A SPECIFIC PURPOSE . THIS SCHEDULE NOT ONLY PRESCRIBES THE METHOD OF COMPUTAT ION OF INCOME OF INSURANCE BUSINESS IN PART (A) BUT ALSO P RESCRIBE THE METHOD OF COMPUTATION OF OTHER INSURANCE BUSINESS I N PART (B). RULE 5 IS WITHIN PART (B) AND EARLIER IT HAS PRESCR IBED THE METHOD OF TAXATION OF PROFIT ON SALE OF INVESTMENTS WHICH WAS LATER ON SCRAPED. EVEN BY APPLYING A REVERSE LOGIC WE MUST A RRIVE AT THE SAME CONCLUSION THAT HAD THE IMPUGNED INCOME WAS E ARLIER TAXABLE UNDER ONE SPECIFIC CLAUSE BUT EVEN ON ITS D ELETION NO CLAUSE WAS INTRODUCED OR REPLACED TO PRESCRIBE THE METHOD OF TAXATION OF SUCH INCOME;. THEREFORE THE REVENUE DEP ARTMENT HAS NO RIGHT TO TAX SUCH AN INCOME IN THE ABSENCE O F ANY ENABLING PROVISION. NATURALLY, SUCH A DELETION CANN OT BE TREATED A SUPERFLUOUS ACTION BUT THIS CHANGE HAD TO GIVE A DEFINITE JUDICIAL MEANING. WE HAVE TO ASCRIBE A LOGICAL CONC LUSION TO THE ITA NO.6832 & 6837/MUM/2014 ICICI LOMBARD GENERAL INSURANCE CO. PVT. LTD. 13 SAID DELETION OF SUB RULE (B) FROM RULE 5 AND THE N ATURAL MEANING IS THAT AFTER THE DELETION THE INCOME DESCR IBED THEREIN IS OUT OF THE PURVIEW OF COMPUTATION OF INSURANCE B USINESS FROM THE FIRST SCHEDULE THEREFORE CONSEQUENTLY CANNOT BE TAXED U/S 44 OF I T ACT. AFTER EXPRESSING THIS VIEW WE HEREBY DISMISS THE CROSS OBJECTION OF THE REVENUE. 19: THE AFORESAID ORDER OF THE PUNE BENCH, WHICH WA S IN 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/MUM/2009 (ASSESSMENT YEAR 2004- 05) AS ALSO IN ITS ORDER DAT ED 30.04.2010, IN THE CASE OF RELIANCE GENERAL INSURAN CE CO. LTD., IN :ITA NO. 781/MUM/2007 (AND OTHER APPEALS).COPIES OF THESE ORDERS HAVE ALSO BEEN FILED BEFORE US. IN THESE ORD ERS IT HAS BEEN HELD THAT THE PROFIT ON SALE OF INVESTMENT IN THE CASE OF AN ASSESSEE CARRYING ON GENERAL INSURANCE BUSINESS CAN NOT BE BROUGHT TO TAX AFTER THE OMISSION OF RULE 5(B) AND AS PER THE CIRCULAR CITED ABOVE. SINCE THE CONTROVERSY BEFORE US IS IDENTICAL, RESPECTFULLY FOLLOWING THE ORDERS OF THE PUNE AND MUMBAI BENCHES OF THE TRIBUNAL CITED ABOVE, WE DIRE CT THE ASSESSING OFFICER TO EXCLUDE THE PROFIT OF Z47,45,6 99/- ON THE SALE OF INVESTMENTS FROM THE ASSESSMENT V 20. THE LEARNED CIT DR, HOWEVER, ARGUED THAT THE EF FECT OF THE OMISSION OF RULE 5(B) IS JUST THE OPPOSITE OF W HAT THE ASSESSEE HAS CONTENDED. ACCORDING TO HIM, AFTER 01. 04.1989 THE EXEMPTION WAS TAKEN AWAY. HE SUBMITTED FURTHER THAT THE PROFIT ON SALE OF THE INVESTMENT HAS ALREADY BEEN I NCLUDED IN THE PROFIT AND LOSS ACCOUNT AND THERE IS NO AUTHORITY T O TAKE IT OUT EVEN UNDER RULE 5(B) AS IT EXISTED BEFORE 01.04.198 9. ACCORDING TO HIM, THERE WAS NO SCOPE FOR APPLYING THE RULES O F INTERPRETATION WHEN THE STATUTORY PROVISIONS ARE CL EAR. SINCE THE MATTER IS CONCLUDED BY THE ORDERS OF THE TRIBUNAL C ITED SUPRA, WHERE ALL THESE ASPECTS HAVE BEEN CONSIDERED, WE AR E UNABLE 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 ASSESSEE; THEREFORE, TO MAINTAIN THE RULE OF CO NSISTENCY AND UNIFORMITY ON THIS ASPECT, WE DECIDE THIS ISSUE IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. ITA NO.6832 & 6837/MUM/2014 ICICI LOMBARD GENERAL INSURANCE CO. PVT. LTD. 14 5. IT IS POINTED OUT THAT IN ASSESSMENT YEAR 2004-0 5 ALSO THE TRIBUNAL VIDE ITS ORDER DATED 18.09.2013 IN ITA NO. 4287/MUM/2009 FOLLOWED ITS EARLIER DECISION DATED 1 0.10.2012 ( SUPRA ) AND ALLOWED THE CLAIM OF THE ASSESSEE. SIMILARLY , IN ASSESSMENT YEARS 2005-06 AND 2006-07, THE TRIBUNAL HAS UPHELD ITS EARLIER DECISIONS VIDE ORDER DATED 05.06.2014 I N ITA NOS. 1714 & 1715/MUM/2011. IT HAS ALSO BEEN POINTED OUT THAT IN ASSESSMENT YEAR 2007-08 ALSO, THE TRIBUNAL VIDE ITS ORDER DATED 12.02.2015 IN ITA NOS. 7844 & 7619/MUM/2011 HAS DEC IDED THE ISSUE IN FAVOUR OF THE ASSESSEE. APART THEREFROM, THE LEARNED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT TH E VIEW OF THE TRIBUNAL IS ALSO IN CONSONANCE WITH THE CLARIFICATI ON ISSUED BY CBDT VIDE CIRCULAR DATED 21.02.2006, WHICH HAS INDE ED BEEN REFERRED BY THE CIT(A) IN THE IMPUGNED ORDER. 6. FOR ALL THE ABOVE REASONS, AND IN THE ABSENCE OF ANY CONTRARY DECISION BROUGHT TO OUR NOTICE, THE ACTION OF CIT(A) IS HEREBY AFFIRMED. THUS, REVENUE FAILS IN GROUND OF APPEAL NO. 1. 7. INSOFAR AS GROUND OF APPEAL NO. 2 IS CONCERNED, SAME RELATES TO THE DECISION OF CIT(A) IN HOLDING THAT A SSESSEE IS ELIGIBLE FOR CLAIMING EXEMPTION U/S 10(15) AND 10(3 4/35) OF THE ACT OF RS.14,11,04,910/- AND RS.5,87,77,006/- RESPE CTIVELY. ON THIS ASPECT, IT IS SEEN THAT THE CIT(A) ALLOWED THE PLEA OF ASSESSEE BY REFERRING TO THE CLARIFICATION ISSUED BY CBDT DA TED 21.02.2006 WHEREBY IT IS CLARIFIED THAT EXEMPTION A VAILABLE TO ANY ITA NO.6832 & 6837/MUM/2014 ICICI LOMBARD GENERAL INSURANCE CO. PVT. LTD. 15 OTHER ASSESSEE UNDER ANY OF THE CLAUSES OF SEC. 10 OF THE ACT SHALL ALSO BE MADE AVAILABLE TO A PERSON CARRYING ON NON- LIFE INSURANCE BUSINESS. APART THEREFROM, AT THE TIME OF HEARING THE LEARNED REPRESENTATIVE FOR THE ASSESSEE HAS REFERRED TO THE DECISION OF TRIBUNAL IN THE CASE OF ASSESSEE FOR ASSESSMENT YEA R 2007-08 ( SUPRA ), WHEREIN SIMILAR ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE FOLLOWING PRECEDENTS IN THE CASE OF ICICI PRUDENTIAL INSURANCE CO. LTD. ( SUPRA ) AND NEW INDIA ASSURANCE CO. LTD. ( SUPRA ). THE RELEVANT DISCUSSION IN THE ORDER OF TRIBUNA L DATED 12.02.2015 READS AS UNDER :- 3. THE ISSUES RAISED VIDE GROUND NO. 2 HAVE BEEN C ONSIDERED BY THE TRIBUNAL IN THE CASE OF ICICI PRUDENTIAL INSURA NCE COMPANY LTD. IN ITA NO. 6854, 6855, 6856 & 6859/MUM/2010. THE T RIBUNAL HAS CONSIDERED THE ISSUE AT PAGE 59 OF ITS ORDER AND AT PAGE 60 THE TRIBUNAL HAS CONSIDERED THE DECISION OF LIFE INSURA NCE CORPORATION OF INDIA VS. CIT (BOM) AND AT PAGE 62 THE TRIBUNAL HAS CONSIDERED THE DECISION IN THE CASE OF NEW INDIA ASSURANCE COMPANY LTD. AND FINALLY AT PARA 49 OF THIS ORDER THE TRIBUNAL CONCLUDED THA T THE ASSESSEE IS ENTITLED TO GET EXEMPTION UNDER SECTION 10 OF ACT, 1961. A SIMILAR ISSUE WAS CONSIDERED BY THE HON'BLE JURISDICTIONAL HIGH COURT IN WRIT PETITION NO. 2560 OF 2011 DATED 1/12/2011, WHEREIN HON'BLE HIGH COURT HAS QUASHED AND SET ASIDE THE NOTICE ISSUED F OR REOPENING OF THE ASSESSMENT WHEN THE REVENUE SOUGHT TO REOPEN THE CO MPLETED ASSESSMENT FOR DISALLOWING THE CLAIM OF DEDUCTION A LLOWED UNDER SECTION 10 OF THE ACT. IN THE ORIGINAL ASSESSMENT ORDER. RESPECTFULLY FOLLOWING THE AFORESAID JUDICIAL DECISION WE CONFIR M THE FINDINGS OF THE LD. CIT(A) ON THIS ISSUE AND DISMISS GROUND NO. 2 O F THE APPEAL. FOLLOWING THE AFORESAID PRECEDENT, AND THE BASIS ON WHICH CIT(A) HAS ALLOWED THE RELIEF, WE FIND NO REASON TO INTERFERE WITH HIS ULTIMATE DECISION, WHICH IS HEREBY AFFIRMED. T HUS, GROUND OF APPEAL NO. 2 RAISED BY THE REVENUE IS ALSO DISMISSE D. ITA NO.6832 & 6837/MUM/2014 ICICI LOMBARD GENERAL INSURANCE CO. PVT. LTD. 16 3.2. IN THE AFORESAID ORDER, THE TRIBUNAL HAS DELIBERATED UPON THE ISSUE IN HAND AND FOUND THAT F OR EARLIER ASSESSMENT YEARS, THE TRIBUNAL HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. RESPECTFULLY FOLLOWING T HE AFORESAID ORDER OF THE TRIBUNAL AND IN THE ABSENCE OF ANY CONTRARY DECISION BROUGHT TO OUR NOTICE BY EITHER S IDE AND MORE SPECIFICALLY THE REVENUE, WE AFFIRM THE STAND OF THE LD. COMMISSIONER OF INCOME TAX (APPEAL), RESULTANTLY, T HE APPEAL OF THE REVENUE IS HAVING NO MERIT, THEREFORE , DISMISSED. FINALLY, BOTH THE APPEALS OF THE REVENUE ARE DISMIS SED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF THE LD. REPRESENTATIVE FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 04/10/2016. SD/- SD/- ( MANOJ KUMAR AGGARWAL ) (JOGINDER SINGH) '!# / ACCOUNTANT MEMBER $!# /JUDICIAL MEMBER MUMBAI; * DATED : 04/10/2016 F{X~{T? P.S/. .. %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. ,-. / THE APPELLANT (RESPECTIVE ASSESSEE) 2. /0-. / THE RESPONDENT. 3. 1& ( , ) / THE CIT, MUMBAI. 4. 1& / CIT(A)- , MUMBAI, 5. 34 /&# , ,( # 5 , / DR, ITA NO.6832 & 6837/MUM/2014 ICICI LOMBARD GENERAL INSURANCE CO. PVT. LTD. 17 ITAT, MUMBAI 6. 6$ 7 / GUARD FILE. ! / BY ORDER, 03,& /& //TRUE COPY// /! (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI