IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “E” MUMBAI BEFORE MS. KAVITHA RAJAGOPAL (JUDICIAL MEMBER)

AND SHRI OMKARESHWAR CHIDARA (ACCOUNTANT MEMBER)

Assessment Year: 2021-22 DCIT Circle 5(3), Kotak Mahindra Life Insurance

426, 4^th Floor, Kautilya Bhawan, Co. Ltd.

BKC, Mumbai - 400051 Vs. 8^th Floor, 12 BKC Bandra Kurla Complex, G- Block, Mumbai – 400051 Maharashtra PAN NO. AAACI 7904G Appellant Respondent Assessee by : Shri Madhur Agrawal a/w. Shri Chetan Kakka Revenue by : Biswanath Das-CIT DR Date of Hearing : 13/11/2024 Date of pronouncement : 01/01/2025 ORDER PER OMKARESHWAR CHIDARA, AM This appeal by the Revenue is directed against order dated

28.05.2024 passed by the Ld. Commissioner of Income-tax (Appeals) – 54 [in short ‘the Ld. CIT(A)’] for assessment year 2021-

22.

2. The revenue filed an appeal in the above said appeal raising following grounds of appeal:

1. "Whether on the facts & circumstances of the case and in law, the Ld. THE LD. CIT(A)(A) erred in interpreting the provisions of Section 44 of the Income Tax, 1961 [“the 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 made there under and accordingly allowing adjustment from the ‘surplus’ worked out as per áctuarial valuation.?"

2. "Whether on the facts and in the circumstances of the case and in law, the Ld THE LD. CIT(A)(A) erred in allowing relief to the assessee by holding that surplus available in Share Holders Account is not to be taxed separately as ïncome from other sources”and at the normal corporate rate and holding that surplus from Share Holders Account with the surplus available in Policy Holders Account and then and taxing this ‘net surplus’arrived at, at the rates specified u/s.115B”?. 3. "”Whether on the facts and in the circumstances of the case and in law, the Ld. THE LD. CIT(A)(A) is correct in falling to appreciate that negative reserve has an impact of reducing the ‘taxable surplus’ as per Form-I and therefore corresponding adjustment for “negative reserve” need to be made to arrive at “taxable surplus?

3. The Learned DR relied on the orders of the Learned AO and mentioned that these issues were covered in favour of the Assessee in earlier years. But, the Revenue filed appeals in Bombay High Court which are pending.

4. Per contra during the course of hearing before the Bench, Learned AR of the Appellant Company has mentioned that all the three grounds of appeal were covered in its favour by the earlier orders of Hon’ble Tribunal of Bombay. Hon’ble ITAT of Bombay has relied upon the decision of the Hon’ble Supreme Court while giving relief to the Appellant company. In view of the same, the Learned AR of the Appellant has pleaded that the Revenues appeal may be dismissed. During the course of hearing’, the Learned AR of the appellant also submitted that the same issues were raised by the Revenue and from Assessment Year 2007-08 onwards, these issues were continuously held in favour of the Appellant Company. Accordingly, the Learned AR of the Appellant filed copies of the ITAT orders in its own case, from 2007-08 onwards till 2020-21, the latest being the order of ITAT for the Assessment Year 2020-21 ITA No.2352/Mum/2024.

5. Heard both the sides and perused the orders of the ITAT in the Appellant’s own case in earlier years. From the order of ITAT, Mumbai, 2020-21 ITA No.2352/Mum/2024, it is observed that all the 3 grounds raised by the Revenue were adjudicated in favour of Assessee. Ground no. 1 & 2 pertain to interpretation/applicability of Section 44 of Act r.w. Rule 2 of first schedule and as mentioned above, the issues are covered. The operative portion of ITAT order at para 7 A.Y. 2020-21 ITA No. 2352/Mum/2024 is reproduced below:

“2. At the very outset, the Ld. Counsel for the assessee pointed out that the issue involved in the present appeal is squarely covered by the decision of the Tribunal in favour of the assessee in the ca