Bombay High Court
Pr. Commissioner Of Income Tax -2 vs M/S. Tata Aig General Insurance Co. Ltd on 5 August, 2019
Bench: Akil Kureshi, S.J. Kathawalla
29. os itxa 528-17.doc
R.M. AMBERKAR
(Private Secretary)
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
O.O.C.J.
INCOME TAX APPEAL NO. 528 OF 2017
Pr. Commissioner of Income Tax -2 .. Appellant
Versus
M/s. Tata AIG General Insurance Co Ltd .. Respondent
...................
Mr. Suresh Kumar a/w Sumandevi Yadav, Priyanka Thakur, Smita
Thakur & Mohinee Chaugule for the Appellant
Mr. P. Pardiwalla, Sr. Advocate a/w Mr. M. Agarwal i/by Desai &
Chinoy for the Respondent
...................
CORAM : AKIL KURESHI &
S.J. KATHAWALLA, JJ.
DATE : AUGUST 5, 2019.
P.C.:
1. Heard.
2. The appeal is admitted for consideration of following substantial questions of law:
(i) Whether on the facts and in the circumstances of the case and in law, the Tribunal was justified in holding that the amortized amount of the premium on investments amounting to Rs.
1,18,23,413/- cannot added back to the balance of the profits as there is no specific prohibition against the allowance of such expenditure u/S. 30 to 43B of the Income Tax Act, 1961 even though such expenditure is to be added back in terms of Clause 5(a) of the First Schedule of the Income Tax Act, 1 of 4 ::: Uploaded on - 07/08/2019 ::: Downloaded on - 07/08/2019 20:38:49 :::
29. os itxa 528-17.doc 1961?
(ii) Whether on the facts and in the circumstances of the case and in law, the Tribunal was justified in holding that the amortized amount of the premium on investments which is not admissible under Section 30 to 43B of the Income Tax Act and is required to be added back as per the provisions of Clause 5(a) of the First Schedule of the Income Tax Act, cannot be allowed to be added to be the balance of profits as there is no specific prohibition against the allowance of such expenditure under Sections 30 to 43B of the Income Tax Act, 1961?
(iii) Whether on the facts and in the circumstances of the case and in law, the Tribunal was justified in holding that profit of Rs. 34,77,000/- on sale of investment is exempt in view of the CBDT Circular No. 528 dated 16.12.1988 even though the said Circular was foe General Insurance Corporation of India and its subsidiaries which are wholly owned enterprises of the Union of India?
(iv) Whether on the facts and in the circumstances of the case and in law, the Tribunal was correct in confirming that the provisions of Sec. 14A of the I.T. Act amounting of Rs. 6,21,923/- is not applicable to assessee as income of the assessee company assessed u/S. 44 of the I.T. Act?
3. We notice that the Revenue has suggested following additional questions:-
(a) Whether on the facts and in the circumstances of the case and in law, the Tribunal was correct in allowing the expenditure incurred towards purchase of hard discs, head sets, RAM etc 2 of 4 ::: Uploaded on - 07/08/2019 ::: Downloaded on - 07/08/2019 20:38:49 :::
29. os itxa 528-17.doc amounting to Rs. 8,93,000/- that such expenditure incurred by the assessee creates enduring benefit and was a capital assets eligible for depreciation u/S. 32 of the Act?
(b) Whether the Tribunal was correct in holding that acquisition of computer software amounting to Rs. 21,76,337/- by the assessee is not capital expenditure without appreciating that computer software acquired by the assessee creates enduring benefit and was a capital asset eligible for depreciation u/S. 32 of the Act?
(c) Whether on the facts and in the circumstances of the case and in law, the Tribunal was correct in confirming that the tax is not required to be deducted in respect of co-insurance commission paid by assessee?
(c) Whether on the facts and in the circumstances of the case and in law, the Tribunal was correct in confirming that the co- insurance commission of Rs. 49,61,295/- is allowable under the provisions of Sec. 40(a)(ia) and does not require to deduct TDS on such payments?
Questions Nos. (a) and (b) refer to the expenditure incurred by the assessee in purchase of hard discs and other peripherals and for acquiring computer software. Revenue argued that the same was in the nature of capital expenditure. CIT(A) and the Tribunal, however, examined the nature of expenditure and held that the same was revenue expenditure. We do not find any error. Similar issue 3 of 4 ::: Uploaded on - 07/08/2019 ::: Downloaded on - 07/08/2019 20:38:49 :::
29. os itxa 528-17.doc was examined by this Court in order dated 4.12.2018 passed in Income Tax Appeal No. 778 of 2016 and connected appeal.
These questions are, therefore, not considered.
As far as Question Nos. (c) and (d) are concerned, we have examined these questions in Income Tax Appeal No. 541 of 2017 and not entertained them. Without recording separate reasons, these questions are not entertained.
4. The Registry is directed to communicate copy of this order to the Tribunal. This would enable the Tribunal to keep papers and the proceedings relating to the present appeal available, to be produced when sought for by the Court.
5. Learned counsel for the respondent waives service.
6. To be heard along with Income Tax Appeal No. 839 of 2011 and companion appeal.
[ S.J. KATHAWALLA, J. ] [ AKIL KURESHI, J ] 4 of 4 ::: Uploaded on - 07/08/2019 ::: Downloaded on - 07/08/2019 20:38:49 :::