1982 (2) TMI 42

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....d by BALASUBRHAMANYAN J.-The assessee which figures in this income-tax reference is a general insurance company. It carries on business with head office in India and branches abroad. For the account year ended December 31, 1966, the company's profit and loss account showed an item described as " profit due to devaluation Rs. 7,75,720. " The ITO brought to charge the whole of this sum for the purpo....

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....nt of Rs. 4,58,049 did not represent taxable income of the assessee. According to the Tribunal, the assessee's foreign branches were nothing but projections of the assessee's head office. The Tribunal relied on the principle that no man can earn a profit from himself. On this basis the Tribunal held that the assessee could not be said to derive any profit merely by converting and revaluing in term....

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....general propositions. That is because the assessment of the income of insurance companies is dealt with in a special way by the taxing statute, apparently out of consideration for the peculiar nature of the insurance business and the special considerations which govern the computation of profit or loss from such business. Section 44 of our I.T. Act, 1961, lays down that the profits and gains of an....

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....p and the balance of profits from general insurance is arrived at, there can be no going back on the figures. The ITO may make some adjustments here and there under cls. (a) to (c) of r. 5, but barring these adjustments, what the assessee displays in its annual accounts as its balance of profits is not open to alteration or even rectification. In this case, the claim to exclude from the balance of....