AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2022 (11) TMI 127
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....he assessee by relying on the decision of the honourable Bombay High Court in case of the principal Commissioner of income tax - 6, Mumbai versus ICICI Prudential life insurance Co Ltd (SLPC number 003816/2019) ignoring the fact that the issue same is of this appeal is pending before the honourable Supreme Court of India. ii. Whether on the facts and circumstances of the case, and on law, the learned CIT (A) is correct in allowing exemption u/s 10 (34) of the income tax act, 1961, amounting to Rs. 6,696,593/- on account of dividend income, denied by the assessing officer, considering the fetters prescribed u/s 44 of the income tax act, 1961 and CIT (A) ignoring the fact that the Department is contesting the assessee's own case in(ITA number 1179/2022) and for assessment year 2012 - 13 and (ITA number 1507/2022) for assessment year 2013 - 14 which is still pending in the honourable High Court for finality iii. whether on the facts and circumstances of the case and on law, the learned CIT (A) is correct in deleting the disallowance u/s 14 A of the income tax act, 1961, amounting to Rs. 3,895,297/- which was made by the assessing officer considering fetters prescribed in Section 4....
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....ount is passed on immediately to the account of the policy order. The company is no discretion in such gain/losses of the linked funds. Thus, the life insurance Co is merely a passthrough entity. In view of the fact that the life insurance Co needs to pay this amount to the policy order, it is required to create a corresponding liability to that extent. Accordingly, dividend on Unit linked the policy amounting to Rs. 1,153,148 has not been claimed as exempt from tax u/s 10 (34) of the act. However dividend and shareholders fund and not only in funds amounting to Rs. 6,696,593 has been claimed as exempt u/s 10 (34) of the act. The reason being that the company believes that the Section 44 exclude the operation of sections relating to the computation of income chargeable to tax and not all the sections of the act. However, the provisions of Section 10 should be applicable to all assessee including insurance companies accordingly the total income of the company chargeable to tax was computed after excluding exempt income u/s 10 of the act as applicable. The assessee also stated that Chapter III of the act deals with the incomes which do not form part of the total income therefore Sect....
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....Assessee explained that as per the provisions of Section 44 of the income tax act, income of life insurance business is to be assessed on the basis of actuarial valuation only and the surplus word out by the actuary cannot be disturbed by the income tax authorities. i. However the learned assessing officer rejected the contention of the assessee referred to the nature of negative reserve in actuarial valuation for service of insurance policies. The learned AO was of the view that it is true that Section 44 provides that surplus worked out by actuarial valuation is to be adopted for computing income from life insurance business but it does not mean that figure taken by the appointed actuary automatically become is assessed total income. Accordingly, he held that by taking negative reserve at zero the surplus has been made less than the actuarial valuation. He also referred to various guidelines issued by insurance regulation and development authority. He also noted that negative reserve is a temporary phenomenon observed only in any years of the policy. He therefore rejected the assessee's contention in respect of taking negative reserve at zero and therefore it was added to the s....
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....ioner of income tax versus ICICI Prudential life insurance Co Ltd 2016] 73 taxmann.com 201 (Bombay) while answering question no 4 admitted the ground raised by the revenue about the allowability of dividend income exemption u/s 10 (34) of The Act . The question no 4 before Hon. High court was: - (4) Whether on the facts and in the circumstances of the case and in law, the Tribunal is correct in holding that provisions of Section 14A of the Act did not apply to Insurance business, even when the assessee has claimed exempted income u/s. 10 of the I.T. Act and has also itself made some disallowance u/s 14A of the Act in the return? Therefore at present the issue is covered in favour of the assessee by the decision of coordinate bench in assessee's own case. Further identical issue arose in case of PRINCIPAL COMMISSIONER OF INCOME TAX (LTU) vs. THE ORIENTAL INSURANCE CO. LTD. (2020) 107 CCH 0583 Del HC (2020) 273 TAXMAN 0427 (Delhi), honourable Delhi High court held as under: "9. We have heard learned counsels and are of the view that no substantial question of law arises for our consideration. The Tribunal has interpreted Section 44 read with the first schedule and concluded t....
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....hat notwithstanding the grounds urged to challenge the order of the CIT (A), the Tribunal should have ventured into examining the merits of the computation of income of the Respondent assessee in terms of Section 44 read with the first schedule of the Act. No doubt, the Tribunal is a final fact-finding body. However, when the Revenue confined its challenge only in respect of the applicability of Section 14A, we cannot find fault in the impugned order, on the basis of submissions not advanced before the Tribunal. We, therefore do not find any substantial question of law arising in relation to the view taken by the Tribunal." Therefore, respectfully following decision of Honourable Delhi High court and Coordinate bench in assessee's own case. This Ground No [3] of ld AO's Appeal fails. b. On the issue of adjustment of negative reserve the coordinate bench followed the decision of the Honourable Bombay High Court in case of principal Commissioner of income tax versus ICICI Prudential life insurance Co Ltd 2016] 73 taxmann.com 201 (Bombay) while answering question no 6 i.e. (6) Whether on the facts and in the circumstances of the case and in law, the Tribunal is correct in failin....