DCIT 14(2)(1), MUMBAI V. INDIA FIRST LIFE INSURANCE CO.LTD, MUMBAI

ITA 7276/MUM/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 8957 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 1 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-01-2017
• Appeal Filed By: Department
• Bench Allotted: I
• Next Hearing Date: 15-12-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 05-12-2014
• Court: TRIBUNAL
• Department Lawyers: B C S NAIK
• Assessee Lawyers: MANOJ PUR OHIT
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL I BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI RAM LAL NEGI, JUDICIAL MEMBER ITA NO. 7276/M/2014 (AY 2010 - 2011) DCIT - 14(2)(1), 453 AAYAKAR BHAVAN, M.K. MARG, 4 TH FLOOR, MUMBAI 400 020. / VS. M/S. INDIA FIRST LIFE INSURANCE CO. LTD., 301, B WING, THE QUBE, INFINITY PARK, DINDOSHI, FILM CITY ROAD, MALAD EAST, MUMBAI 400 097. ./ PAN : AADCB6215G ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SHRI B.C.S. NAIK, CIT - DR / RESPONDENT BY : SHRI FARROKH V. IRANI & MR. MANOJ PUROHIT / DATE OF HEARING : 15.12.2016 / DATE OF PRONOUNCEMENT : 11 .01.2017 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE REVENUE ON 5.12.2014 IS AGAINST THE ORDER OF THE CIT (A) 21, MUMBAI DATED 1.9.2014 FOR THE ASSESSMENT YEAR 2010 - 2011. IN THIS APPEAL, REVENUE RAISED THE FOLLOWING GROUNDS WHICH READ AS UNDER: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT (A) ERRED IN DISALLOWANCE OF LOSS FROM PENSION FUND RS. 18,28,59,480/ - . 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT (A) ERRED IN DIRECTING THE AO TO ALLOW DEDUCTION OF DIVIDEND INCOME RS. 3,52,584/ - OTHER THAN DIVIDEND INCOME EARNED FROM PENSION SCHEME. 2. BRIEFLY STATED RELEVANT FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF LIFE INSURANCE AND A NNUITY BUSINESS. ASSESSEE FILED THE RETURN OF INCOME DECLARING THE TOTAL LOSS OF RS. 33,78,80,593/ - . ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT AND THE ASSESSED INCOME WAS DETERMINED AT RS. NIL WHICH INCLUDES CERTAIN DISALLOWANCES MADE BY THE AO. A GGRIEVED, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT (A). 2 3. DURING THE PROCEEDINGS BEFORE THE FAA, AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, CIT (A) GRANTED RELIEF. AGGRIEVED WITH THE SAID DECISION OF THE CIT (A), REVENUE IS IN APPEAL BEFORE THE TRIBUNAL BY RAISING THE ABOVE MENTIONED GROUNDS. 4. BEFORE US, LD AR FOR THE ASSESSEE SUBMITTED THAT THERE ARE TWO ISSUES IE (I) DISALLOWANCE OF CLAIM OF LOSS FROM PENSION FUND BUSI NESS AND (II) TREATMENT TO DIVIDEND INCOME EXEMPT U/S 10(34) OF THE ACT QUA THE EXCLUSION FOR COMPUTATION OF INCOME OF INSURANCE BUSINESS AND THEY STAND COVERED IN FAVOUR OF THE ASSESSEE. BRINGING OUR ATTENTION TO THE ORDER OF THE CIT (A), WHO GRANTED RELIEF ON BOTH THE ISSUES, LD AR SUBMITTED THAT THE ORDER OF THE CI T (A) IS FAIR AND REASONABLE. 5. ON THE OTHER HAND, LD DR FOR THE REVENUE, WITHOUT CONCEDING AGREED WITH THE OBSERVATIONS OF THE LD AR FOR THE ASSESSEE. 6. ON PERUSAL OF THE ORDER OF THE CIT (A) AND THE AMENDED PROVISIONS OF SECTION 10(34) OF THE ACT, WH EREBY THE WORDS OTHER INSURER ENGAGED IN PENSION FUND ARE INCLUDED, WE FIND THAT THE FINDING OF THE CIT (A) ON THE FIRST ISSUE IS FAIR AND REASONABLE. AS SUCH, THE JUDGMENT OF THE HONBLE HIGH COURT OF BOMBAY IN THE CASE OF LIC OF INDIA LTD (338 ITR 212 ) IS DIRECTLY ON THE ISSUE. ACCORDINGLY, THE CLAIM OF THE LOSS OF PENSION FUND IS AN ALLOWABLE CLAIM. WE APPROVE THE CONCLUSIONS DRAWN BY THE CIT (A) VIDE PARA 4.3 OF HIS ORDER ON THIS ISSUE. THUS, GROUND NO.1 RAISED BY THE REVENUE IS DISMISSED. 7. REGARDING THE 2 ND ISSUE, WHICH RELATES TO THE DISALLOWANCE OF DIVIDEND INCOME U/S 10(34) QUA THE PROVISIONS OF SECTION 44 OF THE ACT, WE FIND THAT THE FINDING OF THE CIT (A) IN PARA 5.3 OF HIS ORDER IS FAIR AND REASONABLE AS THE SAME IS TAKEN BASED ON THE VARIOUS BINDING JUDICIAL PRECEDENTS IN THE CASES OF LIC VS. ADDL. CIT ; ICICI PRUDENTIAL INSURANCE VS. ACIT ; SBI LIFE INSURANCE COMPANY LTD VS. CIT ETC (CONTENTS ON PAGE 8 OF THE CIT (A)S ORDER ARE RELEVANT). ACCORDINGLY, WE AFFIRM THE ORDER OF THE CIT (A ) ON THIS ISSUE TOO. THUS, BOTH THE ISSUES RAISED BY THE REVENUE ARE ALLOWED IN FAVOUR OF THE ASSESSEE. 8. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COUR T ON 1 1 T H JANUARY, 2017. S D / - S D / - ( RAM LAL NEGI ) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; 11.01.2017 . . ./ OKK , SR. PS 3 / 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 . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI