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2023 (11) TMI 391 - AT - Income TaxAssessment of insurance business - Computing taxable income as per section 44 read with rule No.2 of Schedule I -Adjustment of earlier year surplus - HELD THAT:- We notice that the assessing officer while recomputing the income of the assessee has made the adjustment stating that the revenue in earlier assessment years has done a similar adjustment. CIT(A) has given relief to the assessee by relying on the decision of the coordinate bench in assessee's own case for earlier assessment years. Therefore there is merit in the contention that the facts for the year under consideration are identical to that of the earlier years and that the decision of the coordinate bench for earlier years are mutatis mutandis applicable to the year under consideration also. We notice that in the above case, the co-ordinate bench has considered the various adjustments made to the income of the assessee and has held that in assessee’s case the income should be computed as per the provisions of section 44 and accordingly, to be taxed under section 115B. Therefore respectfully following the above, we see no reason to interfere with the decision of the CIT(A). Disallowance u/s 14A - We hold that the provisions of section 14A are not applicable in assessee’s case while granting exemption to an income earned on sale of investment primarily because of the reason of the withdrawal or deletion of sub-r.5(b) to First Schedule of s. 44 of IT Act, thus allow the ground raised in this regard in favour of the assessee. Exemption towards dividend income, interest income from tax free bonds and income from pension line of business - We notice in this regard that the coordinate bench in the case of ICICI Prudential Insurance Co. Ltd [2012 (11) TMI 13 - ITAT MUMBAI] has considered the issue of claiming exemption towards income from pension line of business and dividend income and held that the only effect of section 44 is that the operation of the provisions referred to therein is excluded in the case of an assessee who carried on insurance business and in whose case the provisions of rule 2 of the First Schedule are attracted. If the deductions which are claimed by the assessee do not fall within the provisions which are referred to in section 44, it will have to be held that the applicability of those provisions in the case of an assessee whose assessment is governed by section 44 read with rule 2 in the First Schedule is not excluded. Therefore respectfully following the above decision of the coordinate bench we hold that the assessee is entitle to claim exemption under section 10(15) towards interest income from tax free bonds, under section 10(34) towards dividend income and under section 10(23AAB) towards surplus of Participating Pension Business.
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