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2021 (7) TMI 92 - AT - Income TaxProfit on Sale/Redemption of Investments - whether profit derived by the assessee from sale/ redemption of investments is exempt from tax? - HELD THAT:- In earlier years too similar additions were made by the lower authorities and the matter now stands settled by the decision of the Hon’ble Jurisdictional High Court in case of assessee for AY 2005-06 [2017 (9) TMI 172 - DELHI HIGH COURT].The question framed is accordingly answered in the negative in favour of the assessee and against the revenue, by holding that the itat erred in holding that the income earned on sale/redemption of investment was chargeable to tax. Disallowance of depreciation - assessee has not given the basic details, therefore, the question of allowing any depreciation on such assets cannot be accepted - HELD THAT:- As relying on assessee's own case [2018 (1) TMI 802 - ITAT DELHI] in the year under consideration also, the relevant details for addition made to fixed assets in Financial Year 2009-10 have been placed on record by the assessee. The AO has, however, failed to take the same into consideration. We are, therefore, inclined to set aside this issue to the records of the AO for a de novo verification of the relevant facts. In the result, Grounds 3 and 3.1 are partly allowed for statistical purposes. Disallowance on account of Provision made for Standard Assets - whether Rule 5 prescribes for an adjustment by adding back the provision made for standard assets? - HELD THAT:- There is no enabling mechanism in Rule 5(a) mandating an adjustment to disclosed profits by making an addition on account of provision made for Standard Assets. CIT (DR) has relied upon decision of the coordinate bench of this Tribunal in case of Chaitanya Godavari Grameena Bank [2018 (5) TMI 511 - ITAT VISAKHAPATNAM]. However, in that case the assessee was a bank and had claimed deduction on account of Provision for Standard Assets u/s 36(1)(viia). This was not a case of an Insurance Company to which provisions of Rule 5 was applicable. As already held above, under Rule 5 the Statute makes profit disclosed in Profit and Loss account sacrosanct subject only to adjustments prescribed in Rules 5(a) to 5(c). The case law relied is, therefore, distinguishable. CIT (A), in AY 2011-12, has also not properly addressed the issue. Relevant statutory provisions have been inadvertently misread and hence not properly understood.We therefore delete the disallowance Determination and carry forward of business loss and unabsorbed depreciation - assessee is aggrieved by the fact that the Ld. CIT (A) has erred in not adjudicating on ground numbers 7 and 8 raised by the assessee - HELD THAT:- A perusal of the impugned order passed by the Ld. CIT (A) depicts that inadvertently there is no adjudication by the Ld. first appellate authority on the above issues. Since the issues raised pertain to determination and carry forward of business loss and unabsorbed depreciation, we direct the AO to consider these issues on merits in accordance with law while giving effect to our order.
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