9911796707
TMI Blog2025 (1) TMI 1229X X X X Extracts X X X X X X X X Extracts X X X X ..... sides were heard at length. Case records carefully perused. Relevant documentary evidence brought on record duly considered in light of Rule 18(6) of the ITAT Rules. Relevant judicial decisions considered wherever necessary. 4. We take up the assessee appeal for AY 2016-17 first where the grounds raised by the assessee read as under: "1. That on the facts and circumstances of the case and in law, the Hon'ble CIT(A) erred in upholding the disallowance of Rs 9,79,31,000, made by the Ld. AO on account of Corporate Social Responsibility expenditure ('CSR'), without appreciating the fact that the provisions of section 37 of the Act do not apply to Life Insurance Companies. 1.1 That on the facts and circumstances of the case and in law, the Hon'ble CIT(A)/ Ld. AO erred in not appreciating the fact that the taxability of the Appellant is governed by the specific provisions prescribed under section 44 read with First Schedule to the Act and that the normal provisions of the Act are not applicable on the Appellant. 2 Without prejudice to Ground No.1 above, the Hon'ble CIT(A)/ Ld. AO erred in not allowing deduction under section 80G of the Act during the previous y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lso did not raise a ground claiming the aforesaid exemption in the captioned appeal. In view of the above submissions of the ld. counsel for the assessee, we take up the additional ground first. 10. In this regard, the ld. counsel for the assessee submitted that the Indian courts have consistently held that additional claims by a taxpayer can be raised before the appellate authorities even if such claims were not made in the return of income or during the assessment proceedings. Reliance is placed on the decision of the Hon'ble Supreme Court of India in the case of National Thermal Power Co. Ltd. v. CIT [1998] 229 ITR 383 (SC) wherein the Hon'ble Court observed that the powers of a Tribunal under Section 254 of the Act have been expressed in the widest possible terms. Accordingly, the Tribunal is not restricted to adjudicate an appeal only in respect of the grounds which arise from the order of the ld. CIT(A). 11. Per contra, the ld. DR strongly opposed the admission of additional ground on the ground that the assessee has failed to claim exemption u/s 10(15)(iv)(h) of the Act. The ld. DR relied upon the judgment of the Hon'ble Supreme Court in the case of NTPC 229 IT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. In view of the above, we admit the additional ground raised. 14. We are of the considered view that the though the facts of the investments in PSU Bonds and debentures are available in the audited accounts, the assessing officer needs to examine the same with regard to the eligibility of assessee's claim considering the eligibility criteria laid down in section 10(15)(iv)(h). For this purpose, we find it fit to set aside this issue to the file of the assessing officer for examining the claim of the assessee. Where the claim made is as per the law, the same should be allowed. The additional ground is allowed for statistical purpose. 15. With respect to the ground 1 regarding CSR expenses of Rs. 9,97,31,000/- disallowed, the ld AR fairly submitted that the ground is not pressed as the same is decided against the assessee by the ITAT in AY 2010-11. 16. Per contra, the ld DR relied on the decision of ITAT in the assessee's own case for AY 2010-11 where the CSR expense was disallowed. 17. We have heard the rival submissions and have carefully perused the materials on record. Having heard the rival submissions, the ground no. 1 and its sub-ground is dismissed as not pressed. 18. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lthough same was from sale of investment which cannot be termed as profit and gains of insurance business. 4. Whether the CIT(A) is legally justified in allowing deduction of bonus allocated to policy holders and amount appropriated to funds for future appropriation out of taxable actuarial surplus in contravention to Rule 2 of First Schedule of Income Tax Act, 1961 ('the Act') which does not stipulate such deduction? 4.1. Whether the CIT(A) is legally justified in allowing deduction of bonus allocated to policy holders and amount appropriated to funds for future appropriation out of taxable actuarial surplus because ascertainable liabilities are allowable as deduction in computing total income by ignoring that the provisions of Rules contained in the first schedule stipulate for taxation of actuarial surplus as determined by IRDA regulation and not under other provisions of the Act? 5. On the facts and in the circumstances of the case and in law, Ld. CIT(A) has erred in deleting the addition Rs.887,15,81,000/-, made by AO in which Rs.122,69,03,000/- made on account of amount appropriated towards funds for Future Appropriation (FFA) and Rs.764,46,78,000/- made on acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ought to our notice, we, therefore, respectfully following the decision of the co-ordinate bench, dismiss all the grounds raised by the Revenue. The Assessing Officer is directed to delete the impugned addition". Following the decision of ITAT in 2010-11, the ground no 1 is dismissed. 25. Similarly, the ground no 2 treating the income in share holder account as income derived from life insurance business has been decided in assessee's favour by the ITAT in AY 2010-11 and 2014-15. Nothing contrary to the above decision has been cited by the ld DR. Following the decision of ITAT in 2010-11 and 2014-15, the ground no 2 is dismissed. 26. Ground no 3 relating to sale of investment being treated as income from insurance business has been decided in assesssee's favour by the ITAT in AY 2006-07 to 2014-15. Nothing contrary to the above decision has been cited by the ld. DR. Following the decision of ITAT as above, the ground no 3 is dismissed. 27. Ground no 4, 4.1 and 5 relates to expenditure on Bonus and Funds for Future appropriation (FFA) has been determined in assessee's favour by the ITAT in AY 2010-11 and 2014-15. Nothing contrary to the above decision has been cited by the ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AY 2016-17 as above. 34. The ld AR in its rejoinder vehemently argued that the additional ground has been raised under Rule 27 of the ITAT Rules and submitted that said additional ground filed is in accordance with the decisions of the Jurisdictional High Court in CIT vs. Rose Services Apartment India (P.) Ltd.: [2010] 326 ITR 100 (Del HC) and Sanjay Sawhney vs. PCIT: [2020] 273 Taxman 332 (Del HC), wherein the Hon'ble Delhi High Court held that the respondent-assessee is allowed to raise additional grounds under Rule 27 of the ITAT Rules. 35. The ld DR also relied on the unreported decision of the Delhi High Court in the case of K.C. Khajanchi vs. ITAT: ITA No. 2164/99, wherein it is held that additional ground, even though not raised by oversight by the assessee before the lower authorities, can be raised before the Tribunal. The ld AR also placed reliance on the decisions of Supreme Court in the case of National Thermal Power Limited v. CIT: 229 ITR 383 and CIT vs. Sinhgad Technical Education Society: 397 ITR 344 and Delhi High Court in the case of PCIT vs. Silver Line: 383 ITR 455. 36. We have heard the rival submissions and have perused the relevant material on record. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ally justified in allowing deduction of bonus allocated to policy holders and amount appropriated to funds for future appropriation out of taxable actuarial surplus in contravention to Rule 2 of First Schedule of Income Tax Act, 1961 (the Act) which does not stipulate such deduction? 3.2"Whether the CIT(A) is legally justified in allowing deduction of bonus allocated to policy holders and amount appropriated to funds for future appropriation out of taxable actuarial surplus because ascertainable liabilities are allowable as deduction in computing total income by ignoring that the provisions of Rules contained in the first schedule stipulate for taxation of actuarial surplus as determined by IRDA regulation and not under other provisions of the Act. 4."Whether the CIT(A) is legally justified in allowing deduction of share issue amounting to Rs. 238,14,60,000/- out of taxable actuarial surplus on the ground that the expenditure pertained to life insurance business by ignoring that the Rule contained in the first schedule stipulate for taxation of actuarial surplus as determined by IRDA regulations and not under other provisions of the Act?י 4.1 "Whether expenditure relati ..... 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