TMI Blog2021 (2) TMI 630X X X X Extracts X X X X X X X X Extracts X X X X ..... disallowed the losses. (emphasis supplied) Therefore, even the Assessee acknowledges that if it succeeds, as it has, in its plea that the profit from sale/redemption of investments must be exempt from tax, then it cannot seek deduction as a result of losses on the write off of such investments. Decided n favour of the Revenue. Addition on account of accrued interest on loans, bonds and debentures - assessee is a public sector undertaking of Government of India, conducting the business of non-life insurance for large projects, motor car, health, medi-claim and for other products and establishments - HELD THAT:- As decided in own case assessee company had rightly not recognised an amount as income for the years as per its accounting policy and as per policy issued by the Insurance Regulatory Development Authority (IRDA). So, finding no illegality or perversity in the findings returned by the ld. CIT (A), ground no.1 is determined against the Revenue. Addition on account Guest House - HELD THAT:- Following the decision rendered by the coordinate Bench of the Tribunal, we are of the considered view that when the expenditure incurred by the assessee company for maintenance of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and gains as per section 29 will be added back as per First Schedule as well. The decision of the Apex Court reported in 291 ITR 370 in the case of Oriental Fire and General Insurance Co. Ltd., relied upon by the appellant, made a distinction between a provision and reserve by holding that the provision is a charge against profits and reserve is an appropriation of profit. The Hon'ble Court further held that every provision need not be in the nature of expenditure. This means that the Hon ble Court did not hold that no provision would be in the nature of expenditure. Therefore, even after considering the decision of the Hon ble Apex Court, those provisions which are in the nature of expenditure or allowance and are not admissible, under the provisions of Act form the section 30 to section 43 B would be added back. As regards, the amendment made with effect from 01-04-1989, the said amendment only gives an inclusive definition and includes in the definition of expenditure or allowance any amount debited to P L account as provision for any tax , provisions for dividend , provision for reserve' or any other specified provision. This amendment nullifies the decision of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndment w.e.f. 01.04.1989. However, it allows a deduction which was specifically taken off the statute book for the period from 01.04.1989 to 01.04.2011. Even after 01.04.2011, deduction for diminution in the value of investment or write off of the same has not been allowed. Only loss on realization has been allowed. Therefore, the interpretation of Hon ble ITAT is in conflict with the decision of the Hon'ble Apex Court in the case of Surat Art Silk cloth Manufactures Association, reported in 121 ITR 1, in the said decision the Hon ble Apex Court (in para 12 of the order) held that any construction of statute which makes a provision superfluous and reduces it to silence cannot be accepted. The decision of Hon ble ITAT reduces the legislative amendment w.e.f. 1989 superfluous and reduces it to silence. 6.2 However, notwithstanding the discussion in para 6 and 6.1, the ground no. 4 of the appeal is to be allowed, in view of the decision of jurisdictional ITAT in the case of appellant, as far as write off of investment in concerned. If the Revenue wishes to contest this issue, it has to be done at the appropriate forum. 7. In view of the above ground No. 2, 2.1, 2.2, 2.3, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i.e. in favour of the Revenue and against the Assessee.. 6. With the judgment of the Hon ble Jurisdictional High Court, the issue has come to rest. The appeal of the revenue on this ground is allowed. Addition on account of accrued interest on loans, bonds and debentures: 7. Brief facts of the case are that the assessee is a public sector undertaking of Government of India, conducting the business of non-life insurance for large projects, motor car, health, medi-claim and for other products and establishments. During the year, the company has received an interest income of ₹ 15,55,75,000/- which the Assessing Officer brought to tax on the grounds that the interest is accruing to it every year on debentures, loans and bonds has been provided for. The matter has reached to the level of Tribunal on the earlier years from 2002 onwards wherein the matter from 2002- 03, 2004-05, 2007-08, 2008-09 and 2011-12 has been deleted the addition continuously. 8. We have perused the various orders passed by the coordinate Benches of the Tribunal in assessee s own case for AYs 2002 -03 to 2010 -11, which goes to prove that this issue has already been decided in favour o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee s own case for earlier assessment years, this issue is being decided in favour of the assessee. 6. The Hon ble Delhi High Court has also decided the issue in question in assessee s own for AYs 1986-87 1988 - 89 by returning following findings:- 8. We find substance in the contention of learned counsel for the assessee. 9. Section 44 of the Act is a special provision dealing with the computation of profits and gains of business of insurance. It being a non obstante provision, has to prevail over other provisions in the Act. It clearly provides that income from insurance business has to be computed in accordance with the rules contained in the First Schedule. It is not the case of the Revenue that the assessee has not computed the profits and gains of its Insurance business in accordance with the said rules. The scope of section 44 of the Act came up for consideration before the Supreme Court in General Insurance Corpn. s case (supra), and their Lordships observed thus Section 44 of the Income-tax Act is a special provision governing computation of taxable income earned from business of insurance. It opens with a non obstante clause and thus has an overr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . CIT (A) deleted 50 % of the disallowance of ₹ 9,90,688 /- made by the AO on account of expenses incurred on guest house. This issue has already been decided in favour of the assessee by the coordinate Bench of the Tribunal right from AYs 2001-02 to 2005-06. The matter also stands adjudicated by the ITAT in ITA No.4818/Del/2016 for the assessment year 2010 -11. Coordinate Bench of the Tribunal in AY 2005-06 determined this issue in favour of the assessee by following the order of AY 2000- 01 and 2001 -02 in assessee s own case by returning following findings:- 10. The learned counsel for the a4sessee pointed out that in assessment year 1999 -2000, the Tribunal vide order dated 25.7.2008 in ITA No. 4565/ Delhi/2002 has accepted the assessee' s contentions, A copy of the said order of the Tribunal is placed at pp, 78 to 82 of the paper book. 11. The learned Departmental Representative, on the other hand, strongly justified the order of the CIT(A), in the light of his discussion in the impugned order. 12. We have carefully considered; the rival contentions and gone through the records, The Tribunal in assessment year 1999- 2000 has held that expenditure incu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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