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2010 (4) TMI 1076 - ITAT MUMBAITaxability of income of insurance companies - Profit on sale of investments - exemption was claimed in the computation of income as profit on sale of investments as per Rule 5(b) of the First Schedule - A.O. did not accept the assessee’s contention as in his opinion there was no provision in Rule 5(b) of First Schedule for reducing the profit from sale of investments disclosed in the annual accounts - CIT(A) confirmed not excluding the profit from sale of investments while computing the income. HELD THAT:- We find that the issue raised in this ground now stands settled by the Tribunal in assessment years 2001-2002 and 2002-2003 etc, in assessee’s own case as held that the taxability of income of insurance companies does not extend to taxability of profits on sale of investments for the period assessment years 1989-90 to 2010-2011. Respectfully following the precedent we allow this ground of appeal. Disallowance of expenses u/s.14A - assessee earned interest income from investment made in debentures / bonds and said interest was exempt from income tax u/s.10(23G) - CIT(A) reduced the disallowance - HELD THAT:- We find that the Tribunal in assessee own case held that section 14A contemplates an exception for deductions as allowable under the Act u/s 28 to 43B. It has further been held that since section 44 is a special provision applicable to insurance companies, it is not permissible for the A.O. to travel beyond section 44 and First Schedule of the Income-tax Act. The resultant disallowance sustained by the learned CIT(A) was deleted by the Tribunal. In the absence of any distinguishing feature having been brought to our notice by the ld. DR, respectfully following the precedent, we overturn the impugned order on this issue and order for the deletion of addition - This ground is allowed.
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