Principal Commissioner Of Income Tax-2 vs National Insurance Co. Ltd

[Cites 3, Cited by 0] Calcutta High Court Principal Commissioner Of Income Tax-2 vs National Insurance Co. Ltd on 16 July, 2019 Author: I. P. Mukerji Bench: I. P. Mukerji OD-12 ITA No.76 of 2019 GA No.2116 of 2017 IN THE HIGH COURT AT CALCUTTA Special Jurisdiction (Income Tax) ORIGINAL SIDE PRINCIPAL COMMISSIONER OF INCOME TAX-2,KOLKATA Versus NATIONAL INSURANCE CO. LTD. BEFORE: The Hon'ble JUSTICE I. P. MUKERJI The Hon'ble JUSTICE MD. NIZAMUDDIN Date : 16th July, 2019. Appearance: Mr. P. K. Bhowmick, Adv. Mr. Debangsu Ghorai, Adv. Mr. N. K. Poddar, Sr. Adv. Mr. Debasish Mitra, Adv. Mr. Siddhartha Das, Adv. The Court : This is an appeal under Section 260A of the Income Tax Act, 1961. The revenue has come up with this appeal against an order dated 5th August, 2016 passed by the Income Tax Appellate Tribunal, "A"Bench, Kolkata in ITA No. 674/Kol/2012 relating to the Assessment Year 2005-2006 and raised the following two questions: (a) Whether on the facts and in the circumstances of the case the learned tribunal, has erred in law in deleting the addition of Rs.37,69,96,000/- by holding that the provision for unidentified Motor Third Party Claim is an ascertained liability and should be deducted while computing the book profit under Section 115JB of the Income Tax Act, 1961 by disregarding that the aforesaid provision made for the liability which has not been crystallized and such provision is neither backed by 2 Insurance Regulatory Development Authority (IRDA) nor by any accounting standards? (b) Whether on the facts and in the circumstances of the case the learned tribunal has erred in law in upholding the order of CIT (A) by holding that the provision for "Liabilities Incurred But not Reported" (IBNR) amounting to Rs.12,77,00,000/- as ascertained liability and should be deducted while computing the book profit under Section 115JB of the Income Tax Act, 1961 while the same is inadmissible in terms of explanation given below Section 115JB of the said Act? So far as the first question is concerned, it is covered by the decision of this Court dated 15th September, 2014 in ITAT No.77 of 2014 with GA No.1926 of 2014 (Commissioner of Income Tax, Kolkata-II, Kolkata vs. National Insurance Co. Ltd.) in favour of the assessee. So far as the second question is concerned, the department has accepted the claim of the assessee on the aforesaid issue in assessment years 2000-2001 to 2004- 2005 and 2006-2007 and it could not show exceptional reason for departure of their stand in the present assessment year. In view of the above reason, we do not find merit in this appeal. Accordingly, the appeal (ITA 76 of 2019) and the stay application (GA No. 2116 of 2017) are dismissed. (I. P. MUKERJI, J.) (MD. NIZAMUDDIN, J.) cs