TMI Blog2010 (9) TMI 1117X X X X Extracts X X X X X X X X Extracts X X X X ..... wer to do anything not contained u/s.44 of the Act. The actual computation of profits and gains of insurance business shall have to be computed in accordance with Rule-5 of the First Schedule. In the light of these special provisions having non obstante clause, the AO is not permitted to travel beyond these provisions and accordingly the disallowance of ₹ 11.00 lacs on account of expenses for increase of share capital and ₹ 2,65,112/- of software expenses made by the AO and sustained by the ld. CIT(A) is deleted. The grounds taken by the assessee are, therefore, allowed. - SHRI D.K. AGARWAL, (JM) AND SHRI R.K. PANDA,(AM) For the Petitioner : Shri Yogesh A. Thar For the Respondent : Shri Naresh Kumar Balodia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m the reading of the provisions of sec. 44, was of the view that the provisions of sec. I4A are not to be ignored while computing the profit of a company engaged in the business of Life Insurance. Provisions of sec. 14A do not over-ride the other provisions of Chapter IV. The Assessing Officer further observed that the assessee has given the details of expenses related to exemption income of dividend of ₹ 53,000/-. This has been worked out by the assessee on the ratio of total investment to total expenses of investment department. The Assessing Officer did not accept the said working for the reason that the total expenses incurred during the year by the assessee as operating expenses is ₹ 145.12 crores. The Assessing Officer fol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 950,2951, 3084, 3085 3126/M/08 order dated 26.2.2010 for the Assessment Years 2001-02, 2002-03 and 2005-06. 4) M/s. Reliance General Insurance Co. vs. DCIT and vice versa in ITA No.781/M/07 for Assessment Year 2003-04 and ITA Nos.1520 6262 and 2144 6554/M/2008 order dated 30.4.2010 for Assessment Years 2004-05 and 2006-07. He also placed on record copy of the said orders of the Tribunal. He therefore, submits that in view of the consistent view of the Tribunal, the disallowance of expenses made by the Assessing Officer and sustained by the ld. CIT(A) be deleted. 7. On the other hand the ld. DR while relying on the order of the Assessing Officer further submits that the assessee is claiming exemption u/s.10(33) in respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Tribunal in Oriental Insurance Co. Ltd. vs. ACIT (2009) TIOL -172-ITAT-DEL after discussing the identical issue at length has held that sec.44 provides for application of special provisions for computation of profits and gains of insurance business in accordance with Rule 5 of Schedule I and, therefore, it is not permissible to the Assessing Officer to travel beyond sec.44 and Schedule-I and make disallowance by applying sec.14A of the Act. The above order has consistently been followed by the Tribunal in the above three cases relied on by the ld. Counsel for the assessee. In the absence of any distinguishing feature brought on record by the ld. DR we respectfully, following the consistent view of the Tribunal hold that it is not permiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #8377; 2,65,112/- it was disallowed by the Assessing Officer by treating the same as capital expenditure for bringing in an intangible asset . On appeal, the ld. CIT(A) following the decision of Hon ble Rajasthan High Court in the case of CIT vs. Arawali Constructions Co . (P.) Ltd. 259 ITR 30 confirmed the disallowance made by the Assessing Officer. 13. At the time of hearing the ld. Counsel for the assessee submits that since the assessee is a Life Insurance Co., therefore, the income has to be computed under the provisions of sec.44 of the Act read with Schedule-I to the Act. By placing reliance in the case of Life Insurance Corporation of India vs. CIT (1964) 51 ITR 773 (SC) wherein it has been held : The assessment of the prof ..... X X X X Extracts X X X X X X X X Extracts X X X X
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