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IN THE INCOME TAX APPELLATE TRIBUNAL
MUMBAI BENCH "G", MUMBAI
. .
. . ,
,
BEFORE SHRI R.C. SHARMA, ACCOUNTANT MEMBER
AND SHRI VIVEK VARMA, JUDICIAL MEMBER
6450
ITA No. : 6450/Mum/2010
(Assessment year: 2002-03)
Deputy Commissioner of Income Tax - Vs General Insurance Corporation of
1(3), India,
Room No. 540/564, 5th Floor, `Suraksha'
Aayakar Bhavan, M K Road, New Marine 170 J Tata Road, Churchgate,
Lines, Mumbai -400 020 Mumbai -400 002
.:PAN: AAACG 0615 N
(Appellant) × (Respondent)
Appellant by : Smt. S Padmaja
Respondent by : Smt Latha Krishnan
/Date of Hearing : 20-11-2014
/Date of Pronouncement : 02-01-2015
:
, :
ORDER
PER VIVEK VARMA, JM:
The appeal is filed by the department against the order of
CIT(A) 2, Mumbai, dated 11.06.2010, wherein the department
has raised the following grounds:
"1. Whether on the facts and in the circumstances of the
case, and in law the CIT(A) erred in directing the AO not
to bring to charge total income in accordance with section
115JB of the Income Tax Act ?
2. The facts are that the coordinate Bench of the ITAT in
assessee's case in ITAs No. 6500 to 6502/Mum/2005 dated
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ITA 6450/M/2010
22.10.2009 gave certain directions to the AO with regard to
taxation of profit on sale of investment.
3. The AO, after giving effect to the order of the ITAT,
computed the total income of the assessee u/s 115JB and made
certain adjustment.
4. In the appeal before the CIT(A), the assessee submitted
that the issue of computation u/s 115JB was never the issue
and jurisdiction cast upon by the ITAT to the AO and therefore,
the AO exceeded his jurisdiction when he delved on an issue
which he was not supposed to be.
5. The CIT(A), on the above submissions observed,
I have perused the facts of the case. Income u/s.115JB
had not been offered to tax in the return of income by the
assessee. In the intimation u/s. 143(1) as well as in the
order of assessment u/s. 143(3) the provisions of
Sec.115JB were not invoked. These are undisputed
facts. The issue of Sec.115JB was also not before
Hon'ble Tribunal and is therefore not a part Of the order
of Hon'ble Tribunal. In the order under consideration
Assessing Officer is only giving effect to the order of
Hon'ble Tribunal and therefore his jurisdiction is
restricted to terms contained in the order of Tribunal.
These directions are absolutely silent on invoking the
provisions of Sec.115JB. Therefore in now invoking
Sec.115JB Assessing Officer has exceeded his authority.
Application of Sec. 115JB is not mechanical. It requires
application of mind, adjustment had to be argued and
then only a figure of profit can be arrived at. Very moot
issue raised by appellant is in ground of appeal No.2
where it has been contended that Sec.115JB is not
applicable to appellant at all. According to Ld. Counsel
one of the basic requirements of Sec.115JB is that
accounts are prepared in accordance with Schedule VI of
the Company's Act. In the case of appellant accounts are
not prepared under the Company's Act but are prepared
under the Insurance Act. Therefore, the applicability of
Sec.115JB itself has been challenged. Therefore,
Assessing Officer in giving effect to the order of Tribunal
could not have decided in a mechanical manner that
income u/s.115JB was required to be brought to charge
to tax. Not only this, Ld. Counsel of appellant has also
argued that when the income of appellant is being
computed under Rule 5 of the First Schedule r.w.s. 44 of
the I.T. Act, the applicability of Sec.115JB cannot be
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ITA 6450/M/2010
roped into. All these arguments are revolving around
ground of appeal No.2 of appellant and have a lot of
force to establish that Sec.115JB cannot be invoked in a
mechanical manner. Therefore, the contention of
appellant that in bringing to tax total income in
accordance with provisions of Sec.115JB, 'Assessing
Officer has exceeded jurisdiction is correct. The first
ground of appeal is consequently allowed and Assessing
Officer is directed not to bring to charge total income in
accordance with Sec.115JB at this stage"
6. The CIT(A), therefore, negated the action of the AO.
7. Against this order, the department is in appeal before the
ITAT.
8. Before us, the AR reiterated the submissions made before
the CIT(A) and submitted that the CIT(A) had rightly concluded
that provisions of section 115JB are not applicable on account
as maintained by the Insurance companies.
9. We find the issue was dealt with by the co-ordinate Bench
in ITA No. 3554/Mum/2011 in assessment year 2007-08 and
the ITAT had held that the MAT provisions are not applicable
and has also been followed in assessment year 2008-09.
10. Since the reasoning given by the CIT(A) in para 3 of the
impugned order has been accepted as legally correct, we do not
find any reason to deviate from the orders of the co-ordinate
Benches in assessee's own cases and consequently do not intend
to disturb the correct finding of the CIT(A), which we sustain.
11. Consequently, the Grounds of appeal of the department as
filed is rejected.
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ITA 6450/M/2010
12. In the result, the appeal as filed by the department is
dismissed.
Order pronounced in the open Court on 2nd January, 2015.
. .
(. . ) ( )
Sd/- Sd/-
Û
(R C SHARMA) (VIVEK VARMA)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Mumbai, Date: 2nd January, 2015
/Copy to:-
1) /The Appellant.
2) × /The Respondent.
3) The CIT(A)-2, Mumbai.
4) The CIT -1, Mumbai.
5) "", , /
The D.R. "G" Bench, Mumbai.
6) [
Copy to Guard File.
/By Order
/ / True Copy / /
/
,
Dy./Asstt. Registrar
I.T.A.T., Mumbai
..
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*Chavan, Sr.PS
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