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2013 (12) TMI 55 - AT - Income TaxEnvironmental Relief Fund disallowance u/s 43B Held that:- Following Pruthvi Brokers and Shareholders Pvt. Ltd. [2012 (7) TMI 158 - BOMBAY HIGH COURT] has held that even if a claim is not made before the AO, it can be made before the appellate authorities and the jurisdiction of the appellate authorities to entertain such a claim has not been negated by the Honble Supreme Court - Since the assessee in the revised return has made a claim that the amount of Rs.70,31,561/- collected towards environmental relief fund does not fall under the purview of section 43B and since the Assessing Officer has not entertained the claim for not being claimed through a revised return, therefore, respectfully following the decisions cited (Supra) we hold that the assessee can make the claim before the appellate authorities and the appellate authorities can entertain such a claim The issue was restored for fresh decision. Profit on sale/redemption of investments Whether business income of the Public Financial Institution or income from Insurance business - Held that:- Deletion of sub rule (b) from Rule 5 of the First Schedule was with a specific purpose. This schedule not only prescribe the method of computation of income of Insurance Business in Part (A) but also prescribe the method of computation of other Insurance Business in Part (B). Rule 5 is within Part(B) and earlier it has prescribed the method of taxation of profit on sale of investments which was later on scraped - The Revenue Department has no right to tax such an income in the absence of any enabling provision. Naturally, such a deletion cannot be treated a superfluous action but this change had to give a definite judicial meaning. We have to ascribe a logical conclusion to the said deletion of sub rule (b) from Rule 5 and the natural meaning is that after the deletion the income described therein is out of the purview of computation of Insurance Business from the First Schedule therefore consequently cannot be taxed u/s 44 of I.T. Act Decided against Revenue. Applicability of section 14A Sale of investment exempt u/s 44 - Held that:- Following DCIT vs. Oriental General Insurance Co. Ltd. [2004 (9) TMI 323 - ITAT DELHI-C] - Section 44 of the Act is a special provision dealing with the computation of profits and gifts of business of insurance - It being a non obstinate provision, has to prevail over other provisions in the Act - Income from insurance business has to be computed in accordance with the rule contained in the First Schedule - Section 44 creates a specific exception to the applicability of sections 28 to 43B The purpose of section 14A has no applicability to the profits and gains of an insurance business - Section 44 applies notwithstanding anything to the contrary contained within the provisions of the Income-tax Act relating to computation of income chargeable under different heads - In the cases of assessment of Insurance Companies it was not permissible to the A.O to travel beyond sec. 44 of First Schedule of I. T. Act Decided against Revenue.
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