TaxTMI 
TaxTMI 
2020 (11) TMI 601
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....2018 on following grounds: - 1. "Whether on facts and circumstance of the case and in law, the Ld. CIT(A), is correct in allowing exemptions u/s. 10(34) of the Income Tax Act, 1961, amounting to Rs. 17,92,987/- on account of dividend income which was denied by the Assessing Officer on the basis the fetters prescribed in Section 44 of the Income Tax Act, 1961 and CIT(A) ignoring the facts that the revenue was contesting the case of DCIT v/s. IDBl Federal Life Insurance Company Ltd (ITA 6282/Mum/2012) and ACIT 1(2)(1), Mumbai v/s. Kotak Mahindra Old Mutual Life Insurance Limited (ITA 5655/Mum/2015) in Bombay High Court. 2. Whether on facts and circumstance of the case and in law, the Ld. CIT(A), is correct in deleting the di....
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....Amit Pratap Singh, on the other hand, submitted that the issues have not attained finality and revenue is contesting the same before higher judicial authorities. However, no contrary decision has been placed on record. In the above background, our adjudication to the subject matter of appeal would be as given in succeeding paragraphs. Dividend Income & disallowance u/s 14A 3.1 The assessee being resident corporate assessee is stated to be engaged in the business of Life Insurance. An assessment was framed for the year under consideration u/s. 143(3) on 31/03/2016, wherein the returned Loss of Rs. 1575.40 Lacs was reduced to Rs. 716.12 Lacs after certain additions / disallowances. 3.2 During assessment proceedings, it transpired tha....
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....ontrary to the provisions of the act. Similar was the ratio of following decisions: - (i) DCIT V/s IDBI Federal Life Insurance Company Ltd. (ITA 6282/Mum/2012) (ii) General Insurance Company Ltd. V/s DCIT (342 ITR 27 Bom) (iii) CIT V/s New India Assurance Company Ltd. (71 ITR 761 Bom) (iv) Life Insurance Corporation of India Ltd. V/s CIT (115 ITR 45 Bom) Therefore, the action of Ld. AO in taxing the dividend income was reversed. 3.4 The alternative disallowance u/s 14A, as proposed by Ld. AO was deleted by observing that the provisions of Sec.14A would not apply in case of insurance companies as held in following judicial decisions: - (i) ACIT V/s Kotak Mahindra Old Mutual Life Insurance Lt....
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....n perusal of Actuarial Report in Form-1, it was observed that actuarial valuation was arrived at by ignoring the negative reserves of Rs. 841.35 Lacs. While making actuarial valuation, requirement of reserve to service the insurance policies issued by the company was to be ascertained. Such reserve (called mathematical reserve or value of liability) would be equal to present value of future benefits payable & future expenses to be incurred less present value of future premium payable. When the present value of future premium is more than the present value of future benefits & future expenses, this amount becomes negative which is known as 'negative reserves'. In simple words, it would mean that the insurance contract under consideration wou....