M/S. CHOLAMANDALAM MS GENERAL INSURANCE CO. LTD., CHENNAI V. ACIT, LTU-2, CHENNAI

MA 138/CHNY/2022

AI Insights

The case involves M/s. Cholamandalam MS General Insurance Co. Ltd. filing Miscellaneous Applications under Section 254(2) of the Income Tax Act, 1961 against the orders of the Income Tax Appellate Tribunal for various assessment years. The primary issues revolved around the incorrect application of Section 115JB to insurance companies and the non-adjudication of specific grounds related to disallowances under Section 14A. The Tribunal acknowledged the errors in its previous orders and rectified them by allowing the applications, thereby correcting the legal misinterpretations and omissions.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 130045 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 1 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 28-03-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 23-03-2023
• Assessment Year: 2014-2015
• Appeal Filed On: 27-10-2022
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reopening of assessment

Judgement Text

Miscellaneous Application Nos.137, 138 & 139/Chny/2022 (in ITA No.951/Chny/2018, in ITA No.711/Chny/2020 & in ITA No.784/Chny/2018) िनधा रण वष /Assessment Years: 2013-14, 2014-15 & 2010-11 M/s.Cholamandalam MS General- Insurance Co. Ltd., No.2, Dare House, NSC Bose Road, Chennai-600 001. v. The Asst. Commissioner- of Income Tax, Large Tax Payer Unit, Chennai. [PAN: AABCC 6633 K] (अपीलाथ /Appellant) ( यथ /Respondent) अपीलाथ क ओर से/ Appellant by : Mr.Sandeep Bagmar, Adv. यथ क ओर से /Respondent by : Mr.P.Sajit Kumar, JCIT सुनवाई क तारीख/Date of Hearing : 24.03.2023 घोषणा क तारीख /Date of Pronouncement : 29.03.2023 आदेश / O R D E R PER MANJUNATHA.G, ACCOUNTANT MEMBER: The assessee has filed present Miscellaneous Applications u/s.254(2) of the Income Tax Act, 1961 (in short “the Act") against the order of the Tribunal in ITA No.951/Chny/2018, in ITA No.711/Chny/2020 & in ITA No.784/Chny/2018 dated 26.08.2022 and pertains to assessment years 2013-14, 2014-15 & 2010-11. आयकर अपीलीय अिधकरण, ’सी’ यायपीठ, चे ई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘C’ BENCH: CHENNAI ी वी. दुगा राव, माननीय ाियक सद एवं ी मंजूनाथा.जी, माननीय लेखा सद के सम BEFORE SHRI V. DURGA RAO, HON’BLE JUDICIAL MEMBER AND SHRI MANJUNATHA.G, HON’BLE ACCOUNTANT MEMBER MA Nos.137, 138 & 139/Chny/2022 ( in ITA No.951/Chny/2018 In ITA No.711/Chny/2020 & In ITA No.784/Chny/2018 ) :: 2 :: MA No.137/Chny/2022 for the AY 2013-14: 2. The Ld.Counsel for the assessee, referring to petition filed by the assessee submitted that in Para No.66 of the order of the Tribunal dated 26.08.2022, the Tribunal had given a finding that since provisions of Sec.115JB of the Act, is not applicable to Insurance Companies up to AY 2013-14, no addition can be made to book profit computed u/s.115JB of the Act, and thus, provision for IBNR & IBNER cannot be added to book profit, but, fact remains that provisions of Sec.115JB of the Act, has been made applicable to Insurance Companies from the AY 2013-14 onwards, and thus, this issue has been agitated by the Revenue in Ground Nos.8 & 9 of their appeal memo. Since findings of the Tribunal that provisions of Sec.115JB of the Act, has no application from the AY 2013-14 is incorrect, which needs to be rectified u/s.254(2) of the Act. 2.1 The Ld.DR submitted that the Tribunal has given its findings on the basic premise that provisions of Sec.115JB of the Act, does not apply to Insurance Companies from the AY 2013-14 onwards and this fact has been clarified by the Ld.Counsel for the assessee and the Ld.DR present for the Revenue. Therefore, said findings of the Tribunal constitute a mistake apparent on record, which needs to be rectified. 2.2 We have heard both the parties and considered the contents of Miscellaneous Application filed by the assessee and we find that although, MA Nos.137, 138 & 139/Chny/2022 ( in ITA No.951/Chny/2018 In ITA No.711/Chny/2020 & In ITA No.784/Chny/2018 ) :: 3 :: there is a specific ground by way of Ground Nos.8 & 9 of appeal filed by the Revenue on the issue of application of provisions of Sec.115JB of the Act, towards disallowance made in respect of IBNR & IBNER, but the Tribunal has given its findings that provisions of Sec.115JB of the Act, does not apply to Insurance Companies from the AY 2013-14, even though, said provisions has made applicable by way of an amendment from the AY 2013-14 onwards. Therefore, we are of the considered view that said findings of the Tribunal constitute a mistake apparent on record which needs to be rectified. Thus, we recall the order of the Tribunal in ITA No.951/Chny/2018 dated 26.08.2022 for the AY 2013-14 qua Ground Nos.8 & 9 of appeal filed by the Revenue. 3. The next issue that came up for our consideration from Miscellaneous Application filed by the assessee is non-adjudication of Ground No.8 of Revenue appeal with regard to addition towards disallowance u/s.14A of the Act, to book profit u/s.115JB of the Act. We find that the Tribunal, while disposing of the appeal by inadvertent error not adjudicated Ground No.8 of Revenue appeal, which relates to disallowance u/s.14A of the Act, while computing book profit u/s.115JB of the Act. Therefore, we recall the order of the Tribunal in ITA No.951/Chny/2018 dated 26.08.2022 for the AY 2013-14 qua Ground Nos.8 of appeal filed by the Revenue. MA Nos.137, 138 & 139/Chny/2022 ( in ITA No.951/Chny/2018 In ITA No.711/Chny/2020 & In ITA No.784/Chny/2018 ) :: 4 :: 4. In the result, Miscellaneous Application filed by the assessee in ITA No.951/Chny/2018 for the AY 2013-14 is allowed. MA No.138/Chny/2022 for the AY 2014-15: 5. The first issue that came up for our consideration from Ground No.3.1 of Miscellaneous Application filed by the assessee is addition of provision of IBNR & IBNER while computing book profit u/s.115JB of the Act. The assessee has raised a specific ground in Ground Nos.20-22 in its appeal on the issue of provision of IBNR & IBNER to book profit u/s.115JB of the Act, but the Tribunal by an inadvertent error does not adjudicate Ground Nos.20-22 of the assessee’s appeal. Therefore, we are of the considered view that non-adjudication of specific ground taken in appeal filed by the assessee constitute a misstate apparent on record which can be rectified u/s.254(2) of the Act, and thus, we recall the order of the Tribunal in ITA No.711/Chny/2020 for the AY 2014-15 qua Ground Nos.20-22 of the assessee’s appeal. 6. The next issue that came up for our consideration from Ground No.3.2 of Miscellaneous Application filed by the assessee is non- adjudication of Ground Nos.16-18 of the assessee’s appeal with regard to addition of disallowance u/s.14A of the Act, while computing book profit u/s.115JB of the Act. We find that the Tribunal did not adjudicate Ground Nos.16-18 of the assessee’s appeal. Non-adjudication of specific grounds MA Nos.137, 138 & 139/Chny/2022 ( in ITA No.951/Chny/2018 In ITA No.711/Chny/2020 & In ITA No.784/Chny/2018 ) :: 5 :: taken in appeal constitute a misstate apparent on record, which needs to be rectified u/s.254(2) of the Act and thus, we recall the order of the Tribunal in ITA No.711/Chny/2020 for the AY 2014-15 qua Ground Nos.16- 18 of the assessee’s appeal, 7. In the result, the Miscellaneous Application filed by the assessee in ITA No.711/Chny/2020 for the AY 2014-15 is allowed. MA No.139/Chny/2022 for the AY 2010-11: 8. The first issue that came up for our consideration from Ground No.4.1 of Miscellaneous Application filed by the assessee is disallowance of payment made to motor vehicle dealers. The Ld.Counsel for the assessee referring to Para No.47 of the Tribunal order in Page No.83 submitted that the Tribunal has adjudicated the issue of disallowance of payment made to motor vehicle dealers for the AYs 2013-14, 2014-15 only, even though, said issue is also raised for the AY 2010-11. Therefore, the order of the Tribunal may be suitably modified to make applicable to AY 2010-11 also. 8.1 The Ld.DR, on the other hand, fairly agreed that said issue is also raised by the assessee for the AY 2010-11. However, while deciding the issue, the issue has been decided for the AYs 2013-14 & 2014-15 only and therefore, the order of the Tribunal may be suitably modified. MA Nos.137, 138 & 139/Chny/2022 ( in ITA No.951/Chny/2018 In ITA No.711/Chny/2020 & In ITA No.784/Chny/2018 ) :: 6 :: 8.2 We have heard both the parties and considered contents of Miscellaneous Application filed by the assessee and we find that although, the issue of disallowance of payment made to motor vehicle dealers is agitated for the AYs 2010-11, 2013-14 & 2014-15, but the Tribunal by inadvertently adjudicated the issue for the AYs 2013-14 & 2014-15 alone. We further noted that the very same is also raised by the assessee for the AY 2010-11 and submitted its arguments that facts for the impugned issue is identical for the AY 2010-11 also. Therefore, we are of the considered view that there is an error in the order of the Tribunal in as much as not adjudicating the issue for the AY 2010-11, which needs to be suitably modified in the order of the Tribunal in Para No.47 at Page No.83. Thus, Para No.47 at Page No.83 is now stands read as ‘since the issue from the assessee’s appeal for the AYs 2010-11, 2013-14 & 2014-15 is disallowance of payment made to motor vehicle dealers’. Thus, the findings of the Tribunal in Para No.50 at Page Nos.86-89 of the order of the Tribunal is applicable to AY 2010-11 also and thus, we direct the AO to delete addition made towards disallowance of payment made to motor vehicle dealers for the AY 2010-11. 9. The next issue that came up for our consideration from Ground No.4.2 of Miscellaneous Application filed by the assessee is challenging validity of re-opening of assessment. The ground raised by the assessee challenging validity of re-opening of assessment was held to be not pressed MA Nos.137, 138 & 139/Chny/2022 ( in ITA No.951/Chny/2018 In ITA No.711/Chny/2020 & In ITA No.784/Chny/2018 ) :: 7 :: by the assessee. The Ld.Counsel for the assessee submitted that the assessee has vehemently argued the issue of re-assessment in light of certain judicial precedents, but does not argued said ground, was not pressed. Therefore, the findings of the Tribunal on the issue of re- assessment constitute a misstate apparent on record, which needs to be rectified u/s.254(2) of the Act. 9.1 We have heard both the parties and considered the contents of Miscellaneous Application filed by the assessee and we find that the assessee failed to make out a case of mistake apparent on record in the order of the Tribunal on the issue of validity of re-opening of assessment, because, at the time of hearing, it was stated that since the assessee is getting relief on merits, it does not want to press the ground relating to validity of re-opening of assessment. The Tribunal on the basis of arguments of both sides, rejected the ground taken by the assessee challenging validity of re-opening of assessment and it was held to be not pressed by the assessee. Therefore, we are of the considered view that there is no merit in the Miscellaneous Application filed by the assessee and thus, we reject the ground taken by the assessee in MA No.139/Chny/2022 for the AY 2010-11. 10. In the result, Miscellaneous Application filed by the assessee in ITA No.784/Chny/2018 is partly allowed. MA Nos.137, 138 & 139/Chny/2022 ( in ITA No.951/Chny/2018 In ITA No.711/Chny/2020 & In ITA No.784/Chny/2018 ) :: 8 :: 11. In the result, Miscellaneous Application filed by the assessee in ITA No.951/Chny/2018 for the AY 2013-14 is allowed and the Miscellaneous Application filed by the assessee in ITA No.711/Chny/2020 for the AY 2014- 15 is also allowed and Miscellaneous Application filed by the assessee in ITA No.784/Chny/2018 is partly allowed. Order pronounced on the 29 th day of March, 2023, in Chennai. Sd/- (वी. दुगा राव) (V. DURGA RAO) याियक सद य/JUDICIAL MEMBER Sd/- (मंजूनाथा.जी) (MANJUNATHA.G) लेखा सद य/ACCOUNTANT MEMBER चे ई/Chennai, दनांक/Dated: 29 th March, 2023. TLN आदेश क ितिलिप अ ेिषत/Copy to: 1. अपीलाथ /Appellant 4. आयकर आयु /CIT 2. यथ /Respondent 5. िवभागीय ितिनिध/DR 3. आयकर आयु (अपील)/CIT(A) 6. गाड! फाईल/GF