ACIT Vs SBI General Insurance Company Limited (ITAT Mumbai)
Summary: The Mumbai Bench of the Income Tax Appellate Tribunal dismissed the Revenue’s appeals for Assessment Years 2012-13, 2013-14 and 2014-15 and disposed of the assessee’s Cross Objections without adjudicating the reassessment jurisdictional grounds. The appeals and Cross Objections arose from a common order of the CIT(A)-54, Mumbai, and AY 2012-13 was treated as the lead year.
The assessee, a general insurance company, had originally filed its return for AY 2012-13 declaring a loss of Rs.59,30,56,606/-. Assessment under section 143(3) was completed on 23.03.2016 accepting the returned loss. The assessment was subsequently reopened under sections 147/148 on 29.03.2019 in relation to inward fire premium, reinsurance premium ceded and depreciation on computer software. In reassessment, additions were ultimately made only towards reinsurance premium of Rs.14,32,97,149/- and depreciation on computer software of Rs.5,49,25,318/-. The CIT(A) deleted both additions on merits but did not adjudicate the jurisdictional grounds.
On the reinsurance issue, the Assessing Officer noted that the assessee had ceded reinsurance premium of Rs.128.62 crores outside India, including Rs.27.19 crores placed with Insurance Australia Group, a single non-resident reinsurer. The Assessing Officer considered that Regulation 9 of the Insurance Regulatory and Development Authority (General Insurance—Reinsurance) Regulations, 2000 restricted placement with one foreign reinsurer to ten per cent of total premium ceded outside India unless prior IRDAI approval was obtained. The assessee explained that its reinsurance programme had been placed before IRDAI and that the Authority had not objected.
