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2017 (3) TMI 1054 - CALCUTTA HIGH COURTAddition on account profit on sale/redemption of investment - ITAT deleted addition - Revenue’s stand is that there is no specific provision in the statute which allows a general insurance company’s profits from sale of investments to be exempted from total income for the purpose of taxation under the 1961 Act - Held that:- We do not find any reason to accept the argument of the Revenue which goes contrary to the consistent stand taken by them on similar point in earlier assessment years on the same point of law. The Circular of 16th December, 1988 clearly stipulated the object behind deletion of aforesaid sub-clause (b). The manner in which profits from investments of a general insurance company is to be treated for income tax purpose also can be construed from the Notes on Clauses extracted from the Finance Bill, 1988. We have reproduced the relevant portion thereof earlier in this judgment. Having regard to the provisions of Section 44 of the Act read with First Schedule thereto, in our opinion the Assessing Officer for the applicable assessment year did not have power to add back the profit of ₹ 245.09 crores arising out of sale of investments to the total income of the assessee. Mr. Nizamuddin also could not explain to us why deviation was made on treatment of profits on sale of investments for the two assessment years. On binding nature of the aforesaid Circular of 1988, no negative argument has been advanced on behalf of the Revenue. We find that on no occasion earlier to or later than these two assessment years, the Revenue had preferred any appeal before the Tribunal or otherwise questioned such reduction by the assessee. In the cases of Sarita Agarwal (2002 (7) TMI 103 - SUPREME Court ) and Shivsagar Estate (2000 (12) TMI 909 - SUPREME COURT), special leave petitions of the Revenue were dismissed by the Supreme Court having regard to the fact that no appeal had been carried against the orders of identical assessments for the previous years. The same principle ought to apply in respect of the assessment year 2005-2006, with which this appeal is concerned. As regards assessment year 2006-2007, we are dealing with the same in another appeal filed by the Revenue before us. - Decided against revenue
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