TaxTMI 
TaxTMI 
2011 (8) TMI 47
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.... on the following substantial questions of law:- (a) Whether on the facts and in the circumstances of the case and in law the Tribunal was justified in deleting the addition made on account of provision of solvency margin by the Assessing Officer even though the provision for solvency margin was made as per the directive of IRDA for a period of three years only and does not form the method of actuarial valuation made in accordance with the Insurance Act, 1938 ? (b) Whether on the facts and in the circumstances of the case and in law the Tribunal was right in deleting the addition made on account of provision on solvency margin by the Assessing Officer which was not an ascertained liability eligible for deduction ? ....
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.... on the ground that the provision for solvency margin was not an ascertained liability and that income from Jeevan Suraksha Fund being exempt under section 10(23AAB), the loss incurred from the said fund cannot be adjusted against the taxable income. 7. On appeal filed by the assessee, the Commissioner of Income-tax (Appeals) confirmed the additions made by the Assessing Officer. 8. On further appeal filed by the assessee, the Income-tax Appellate Tribunal by the impugned order deleted the said additions. Hence, the revenue has filed these appeals under section 260A of the Income-tax Act, 1961. 9. As regards questions (a) and (b) are concerned, it is not in dispute that the provision for solvency margin was made as per the directions giv....
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....as directed to set right the said deficiency over a period of three years by making a provision which shall be kept apart in the policy-holders fund and no part of the said provision would be available for distribution either to the policy-holders or to the Government of India. Accordingly, the assessee had set apart Rs. 3,500 crores towards solvency margin in the assessment year in question. 13. The Income-tax Appellate Tribunal after considering various decisions of the Apex Court as also, this Court and section 64(VA) of the Insurance Act, 1938 held that the amounts set apart towards the solvency margin as per the directions given by the IRDA were ascertained liability which were required to be set apart as per the regulations framed by....
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....e in the total income of the assessee and, therefore, while determining the distributable profits of the assessee, the loss from Jeevan Suraksha Fund ought not to be allowed to be adjusted against the taxable income. 17. It is not in dispute that the Jeevan Suraksha Fund is a pension fund approved by the Controller of Insurance appointed by the Central Government to perform the duties of the Controller of Insurance under the Insurance Act, 1938. The loss incurred in the Jeevan Suraksha Fund has been considered by the actuary as a business loss, as per the valuation report as on the last day of the financial year, allowable under section 44 read with the First Schedule to the Income-tax Act, 1961. The fact that the income from such fund has....