2017 (3) TMI 1696

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....cumstances of the case and in law, the Hon'ble Tribunal was correct in concluding that transfer from Share Holders Account to Policy Holder's Account and shown as part of 'surplus' in the 'actuarial valuation' was only transfer of capital asset and not taxable u/s44 of the Act read with Rule 2 of the first schedule. 2. Whether on the facts and in the circumstances of the case and in law, the Hon'ble Tribunal was correct in allowing the relief to the assessee by holding that 'surplus' available both in Policy Holders Account and Share Holders Account is to be consolidated and only 'net surplus' is to be taxed as income from Insurance Business. 3. Whether on the facts and in the circumstances of the case and in law, the ITAT is justif....

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....on of liability to arrive at actuarial surplus? 3. Briefly stated, the facts are that M/s. Future Generali India Life Insurance Co. Ltd. (FGILIC) filed its return of income for the A.Y. 2011-12 on 30.09.2011 disclosing total loss of Rs. 300,45,37,430. Subsequently, it filed a revised return of income on 30.03.2012 disclosing total loss of Rs. 320,16,20,117 following the judgement of the Hon'ble Bombay High Court in the case of CIT vs. Life Insurance Corporation of India Ltd. 338 ITR 212 (2011) in respect of loss from pension business u/s 10(23AAB) of the Act. FGLIC is a company registered under the Companies Act, 1956 and has obtained license to undertake the business of life insurance from Insurance Regulatory and Development Authorit....

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....16/- made by FGILIC, the learned CIT(A) followed the judgement of the Hon'ble Bombay High Court in Life Insurance Corporation of India Ltd. (supra) wherein it is held: "The fact that income from such fund has been exempted under section 10(23AAB) with effect from 1st April, 1997 does not mean that pension fund ceases to be insurance business so as to fall outside the purview of insurance business covered under section 44 of the Income Tax Act, 1961. In other words, the pension fund like Jeevan Suraksha Fund would continue to be governed by the provisions of section 44 of the Income Tax Act, 1961 irrespective of the fact that the income from such fund are exempted or not. Therefore, while determining the surplus from insurance business....

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....rt has held that the Assessing Officer has no power to modify the account after actuarial valuation is done. The issues in 1st, 2nd & 3rd ground of appeal in the instant case are squarely covered by the above judgement. Respectfully following the same, we dismiss 1st, 2nd & 3rd ground of appeal filed by the revenue. 6.1 Now we turn to 4th, 5th, 6th and 7th ground of appeal as they address a common issue. In the case of Life Insurance Corporation of India Ltd. (supra), the assessee was engaged in the life insurance business. In its return of income for the A.Y. 2002-03, it computed actuarial valuation surplus by excluding the provision for reserve on account of solvency margin amounting to Rs. 3,500 crores and loss in Jeevan Suraksha Fund.....