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Income Tax Appellate Tribunal, MUMBAI BENCH “C”, MUMBAI
Before: SHRI C.N. PRASAD, HONBLE & SHRI G. MANJUNATHA, HONBLE
This appeal and cross objection are filed by the revenue and assessee against the order of the Learned Commissioner of Income Tax (Appeals)–12, Mumbai [hereinafter in short “Ld.CIT(A)”] dated 21.09.2017 for the A.Y. 2011-12.
Revenue in its appeal has raised the following effective grounds: - “1. On the facts and in the circumstances of the case and in law, the Ld CYT(A) erred, in relying on the order of TTAT in the case of ICICI Prudential Life Insurance CO. Ltd. for earlier years and in the case of IDBI Federal Life Insurance CO. Ltd. for A.Y. 2009-10 and 2010-1 1 respectively, in interpreting the provisions of Section 44 of the I.T. Act read with Rule 2 of the First Schedule along with provisions of Insurance Act 1938, Insurance Regulatory and Development Authority Act 1999 and regulations there under and accordingly allowing adjustment from the 'surplus' worked as per "actuarial valuation" land as shown by the assessee in Form-7/ in violation of the ratio of the Apex Court in the case of LIC vs CIT 51 ITR 778 without appreciating the fact that these decisions are not accepted by the Department and further appeals have been filed. 2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in giving relief to the assessee following the decision of Hon'ble ITAT in the case of ICICI Prudential Life Insurance CO. Ltd. for the earlier years and in the case of IDBI Federal Life Insurance CO. Ltd. for A.Y. 2009-10 and 2010-11 respectively, in concluding that transfer between shareholders Account and Policy Holders Account is tax neutral and not taxable u/s 44 of the Act r.w. Rule 2 of the First Schedule, without appreciating the fact that this decision of the ITAT were not accepted by the department and further appeals have been filed.
3. On the facts and in the circumstances of the case and in law, the Ld CIT(A) erred in failing to appreciate that negative reserve has an impact of reducing the 'taxable surplus' as per Form-7 and therefore corresponding adjustment for "negative reserve" need to be made to arrive at "taxable surplus".
(A.Y: 2011-12) CO. NO. 10/MUM/2019 M/s. IDBI Federal Life Insurance Company Pvt. Ltd., 4. On the facts and in the circumstances of the case and in law, the Ld CIT(A) erred in allowing the dividend income of assessee as exempt u/s. 10(34) of the I.T. Act, 1961, ignoring the fact that dividend income is considered as part of income of Life Insurance Business and is included as an 'income' by the actuary? 5. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in AO deleting the addition made u/s 14A r.w.r. 8D on protective basis without appreciating the fact that the Ld. CIT(A) has allowed dividend as exempt income, then, the disallowance has to be made u/s 14A r.w.r. 8D of the Act and on the contrary, the department is in appeal for allowing the claim of assessee u/s 10(34) of the Act, 6. On the facts and in the circumstances of the case and in law, the Ld CIT(A) erred in deleting the addition made on account of claim of 1 00% depreciation ignoring the facts that Actuarial surplus is determined on the basis of the total assets of the company and therefore by not capitalizing the above assets, the assets of the assessee company are under-stated in the books and thereby it has an impact of reducing the surplus or increase in the deficit and therefore, the assets so written off are also accordingly required to be considered as part of the surplus and taxable under section 44 of the IT. Act?”
At the outset, Learned Counsel for the assessee submitted that all the grounds of appeal of the revenue are decided by the Tribunal in assessee’s own case for the A.Ys. 2008-09 to 2013-14 by various orders and also identical issues were decided by the Tribunal in the case of ICICI Prudential’s case. Copies of the orders were placed on record by the Ld. Counsel.
4. Ld. DR fairly submitted that all the grounds were decided by the Tribunal in assessee’s own case.
(A.Y: 2011-12) CO. NO. 10/MUM/2019 M/s. IDBI Federal Life Insurance Company Pvt. Ltd., 5. We have heard the rival submissions and perused the relevant materials on record. We find that the following grounds of appeal are covered in favour of the assessee by the decision of the ITAT in assessee’s own case and in other cases as given below.
ITAT decision ITAT decision in IDBI Federal in IDBI Federal Life Insurance ITAT decision in Life Insurance Company IDBI Federal Life Company Limited for Insurance Limited for ITAT decision ITAT A.Ys. 2012-13 Company A.Y. 2009-10 in ICICI decision in & Limited & Prudential's ICICI Ground raised
Ground A.Y. 2013-14 for 2010-11 case Prudential's No. before ITAT in A.Y. 2008-09 in in case ITA.No. 1044 & ITA.No. [140 ITD 41 in ITA.No. ITA.No. 6281 & 1045/Mum/2018 1563/Mum/2013 (Mum)] 1488/Mum/2013 6282/Mum/2012, & dated ITA.No. 6970/Mum/2017 25.01.2018 5567/Mum/2014 dated dated 24.07.2019 09.08.2017 Allowing adjustment Pages 6 to 8, Page 6, last Page 5, Page 5, Page 58, 1. from the Paras 12 to Para of Para 3 Para 7.1 Para 6 Para 19 "actuarial 15 valuation" Transfer between Share Page 79, Holders Pages 6 to 8, Para 36 Page 6, last Page 5, Page 6 and 7,
2. Account and Paras 12 to Page 83, para of Para 3 Para 7.1 Para 8 Policy 15 Para Holder's 39-40 Account is tax neutral Pages 6 to 9, Negative Page 6, last Page 5, Page 98, 3. --- Paras 12 to Reserves para of Para 3 Para 7.1 Para 59 14 Exemption Pages 6 to 8, Page 5, Page 9, Page 94, --- 4. for dividend Paras 12 to Para 7.1 Para 12 Para 49 15 income Page 11 and Pages
5. Disallowance Page 6, Pages 2 to 6, --- 12, 86-89, u/s. 14A Para 8.3 Paras 5 to 9 Para 14 Para 46
(A.Y: 2011-12) CO. NO. 10/MUM/2019 M/s. IDBI Federal Life Insurance Company Pvt. Ltd., ITAT decision ITAT decision in IDBI Federal in IDBI Federal Life Insurance ITAT decision in Life Insurance Company IDBI Federal Life Company Limited for Insurance Limited for ITAT decision ITAT A.Ys. 2012-13 Company A.Y. 2009-10 in ICICI decision in & Limited & Prudential's ICICI Ground raised
Ground A.Y. 2013-14 for 2010-11 case Prudential's No. before ITAT in in case A.Y. 2008-09 in ITA.No. 1044 & ITA.No. [140 ITD 41 in ITA.No. ITA.No. 6281 & 1045/Mum/2018 1563/Mum/2013 (Mum)] 1488/Mum/2013 6282/Mum/2012, & dated ITA.No. 6970/Mum/2017 25.01.2018 5567/Mum/2014 dated dated 24.07.2019 09.08.2017 Allowing write off of Pages, Para Pages 6 to 8, Page 98, Page 6, last Page 8, 6. assets (Cost 7.1 Page 6, Paras Paras para of Para
3. Para 10 less than Para 8.4 12 to 15 61-62 ₹.20,000)
Thus, we find that all the above grounds of appeal raised by the Revenue are covered in favour of the assessee by various orders of the Tribunal in the aforementioned cases.
7. The Hon’ble Madhya Pradesh High Court in the case of Agrawal Warehousing and Leasing Ltd. v. CIT 2 [57 ITR 235], by following the judgment of the Hon'ble Supreme Court in the case of UOI v. Kamlakshi Finance Corporation Ltd. AIR 1992 SC 711, 712 has ruled thus:
“The principles of judicial discipline require that the orders of the higher appellate authorities should be followed unreservedly by the subordinate authorities. The mere fact that the order of the appellate authority is not ‘acceptable’ to the Department - in itself an objectionable phrase – and is the subject-matter of an appeal can furnish no ground for not following it unless its operation has been suspended by a competent court. If this healthy rule is not followed, the result will only be undue harassment to assessee and chaos in administration of tax laws”.
(A.Y: 2011-12) CO. NO. 10/MUM/2019 M/s. IDBI Federal Life Insurance Company Pvt. Ltd., 8. Carrying this principle further, the Hon’ble Gujarat High Court in Sayaji Iron and Engineering Co. v. CIT [253 ITR 749] reiterated that no Tribunal of fact has any right or jurisdiction to come to a conclusion entirely contrary to the one reached by another bench of the same Tribunal on the same facts, and if a bench of a Tribunal on identical facts is allowed to come to a conclusion directly opposed to the conclusion reached by another bench of the Tribunal on an earlier occasion, that will be destructive of the institutional integrity itself.
Therefore, facts being identical, we follow the decision of the Tribunal mentioned hereinbefore and dismiss all the grounds of appeal filed by the Revenue in its appeal.
CO. NO. 10/MUM/2019
Since we have dismissed the appeal of the revenue, the cross objection filed by the assessee becomes infructuous. Accordingly, the same is dismissed.
Order pronounced in the open court on the 07th February, 2020