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Deputy Commissioner of Income Tax - 1(3),Room No. 540/564, 5th Floor,Aayakar Bhavan, M K Road, New MarineLines, Mumbai -400 020 Vs. General Insurance Corporation of India, Suraksha 170 J Tata Road, Churchgate,Mumbai -400 002
January, 07th 2015
                 "" Û   

                 MUMBAI BENCH "G", MUMBAI
                      . .
                      . . ,   

                      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


      ,  :


           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
                                            General Insurance Corporation of India
                                                                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
                                             General Insurance Corporation of India
                                                                 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

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.
                                              General Insurance Corporation of India
                                                                  ITA 6450/M/2010

       12.     In the result, the appeal as filed by the department is
       Order pronounced in the open Court on 2nd January, 2015.

       . .
      (. . )                                               ( )
             Sd/-                                                Sd/-

      (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
*Chavan, Sr.PS
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