2015 (7) TMI 317

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.... of the insurance business, i.e., linked and non-linked business, taken into account. This was in view of the income - which would include loss as well, of the pension business being exempt u/s. 10(23AAB) of the Act (refer PB pg. 6). During the assessment proceedings, it was explained vide its letter dated 27.06.2011 by the assessee that the computation of profits and gains of the insurance business is covered by section 44 of the Act. However, as the income from the pension business falls under Chapter III (i.e., the Chapter, incomes specified where-under do not form part of the total income), the same has been excluded in computing its business income under Chapter IV of the Act. Income was assessed at the returned income vide order u/s. 143(3) dated 20.07.2011. Subsequently, the assessee moved an application u/s.154 dated 24.10.2011 (copy on record at PB pgs. 1-5) on 31.10.2011, claiming of a mistake in reducing the loss of its pension business in-as-much as the same was also a part of its insurance business and, thus, liable to be taken into account in computing income from the same u/s. 44 of the Act r/w First Schedule thereto, citing the recent decision (dated 02.08.2011) by ....

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....x Appellate Tribunal [1988] 174 ITR 579 (Ker); and Walchand Nagar Industries Ltd. vs. V.S. Gaitonde [1962] 44 ITR 260 (Bom) toward the same. Though there have been contrary decisions in the matter, as in the case of Jiyajeerao Cotton Mills Ltd. v. ITO [1981] 130 ITR 710 (Cal), the issue can only be considered as settled in view of the decision by the apex court in Saurashtra Kutch Stock Exchange Ltd. (supra). 3.2 Next, we may consider the decision by the hon'ble jurisdictional high court in the case of LIC of India Ltd. (supra), on which the assessee's case is based. The relevant questions of law ((c) & (d)) as raised before and admitted by the hon'ble court were as under: '(c) Whether on the facts and in the circumstances of the case and in law the Tribunal was justified in deleting the addition made by the Assessing Officer on account of loss from Jeevan Suraksha Fund ignoring the settled position of law that income includes loss and that the income from Jeevan Suraksha Fund does not form part of the total income of the Assessee Corporation under section 10(23AAB) of the Income-tax Act, 1961? (d) Whether on the facts and in the circumstances of the case t....

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....23AAB) was not with a view to treat the pension fund like Jeevan Suraksha Fund outside the purview of insurance business but to promote insurance business by exempting the income from such fund. Therefore, in the facts of the present case, the decision of the Income-tax Appellate Tribunal in holding that even after insertion of section 10(23AAB), the loss incurred from the pension fund like Jeevan Suraksha Fund had to be excluded while determining the actuarial valuation surplus from the insurance business under section 44 of the Income-tax Act, 1961 cannot be faulted. Accordingly, questions (c) and (d) are answered in the affirmative, that is, in favour of the assessee and against the revenue.' Clearly, therefore, as a reading of the admitted questions of law as well as the decision in their respect would show, the hon'ble court has decided the same issue as arising in the instant appeal. 3.3 True, these are rectification proceedings, so as to eliminate from its ambit admission of a debatable issue, and which is otherwise apparent, at least prima facie, in-as- much as the matter was admitted by the hon'ble jurisdictional high court as raising substantial question....

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....nt of the expenditure incurred being in excess of income, as where the same may not yield income or which may not materialize to the extent expected, even as expenditure has to be incurred. There is, as such, no qualitative difference in such a case, and all that alters or is different is only the extent of net income, and which could as well be in the negative or at a loss. Chapter III of the Act enlists incomes which do not form part of the total income as defined u/s. 2(45) of the Act. The same, accordingly, do not enter the computation process for the total income, which is to be under the different heads of income enumerated under parts A to F of Chapter IV of the Act. Where, therefore, there arises an income, the nature and character of which is as specified under a particular provision/s of Chapter III, there is no obligation on the part of the assessee to compute it in accordance with under the relevant provisions of Chapter IV of the Act. That the said income may pertain to its principal or allied business or may even otherwise arise to it, is of no moment in-as-much as it does not enter the computation process (for the total income under the Act). Further, whether the bus....