Section 44 overrides Section 14A for insurance income, and a new remand theory cannot be raised on appeal.

Section 44, read with the First Schedule, constitutes a special overriding code for computing an insurance company's income, so Section 14A cannot be invoked to disallow expenditure within that framework. The Court held that profits of insurance business must be computed only under Section 44 and the First Schedule, and prior consistent assessment treatment supported that view. It also held that a remand to the Assessing Officer was unwarranted because the fresh-computation theory was not raised before the Tribunal and could not be introduced for the first time at the appellate stage. The Revenue failed to establish any substantial question of law.

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Issues: (i) Whether Section 14A of the Income-tax Act, 1961 applies to the computation of income of an insurance company governed by Section 44 and the First Schedule; (ii) Whether the Tribunal ought to have remanded the matter to the Assessing Officer for fresh computation of income under Section 44 read with the First Schedule.

Issue (i): Whether Section 14A of the Income-tax Act, 1961 applies to the computation of income of an insurance company governed by Section 44 and the First Schedule.

Analysis: Section 44 operates as a special provision with a non-obstante clause and overrides the provisions otherwise applicable to computation of income, including the provisions from Section 28 to 43B. The computation of profits and gains of an insurance business is to be made only under Section 44 and the First Schedule. Since Section 14A is not independently applicable outside the excluded computation framework, it cannot be invoked in relation to an insurance company governed by Section 44. The consistent view taken in earlier assessment years also supported the same conclusion.

Conclusion: Section 14A does not apply to the computation of income of the respondent-assessee.

Issue (ii): Whether the Tribunal ought to have remanded the matter to the Assessing Officer for fresh computation of income under Section 44 read with the First Schedule.

Analysis: The proposed remand was not a ground urged before the Tribunal. The challenge before the Tribunal was confined to the applicability of Section 14A, and the Revenue could not seek a fresh examination of the computation issue at the appellate stage on a basis never advanced earlier. No fault could, therefore, be found with the Tribunal for not remanding the matter.

Conclusion: No remand to the Assessing Officer was warranted.

Final Conclusion: The Revenue failed to establish any substantial question of law, and the Tribunal's view in favour of the assessee was left undisturbed.

Ratio Decidendi: Where Section 44 provides a special, overriding code for computation of an insurance company's income, Section 14A cannot be applied to disallow expenditure in that computation, and a new remand theory cannot be introduced for the first time at the appellate stage.

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