TaxTMI 
TaxTMI 
2021 (10) TMI 1419
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.... the IT Act, 1961. 3. Whether on the facts and in the circumstances of the case, the Ld. CIT(A) was justified in ignoring the fact that the non obstante clause in sec 44 is not extended to sec 10(23AAB) of the Act. 2. The brief facts of the case are that the assessee company is engaged in the business of life insurance. The assessee has filed the return of income on 19.09.2016 for the A.Y 2016-17 declaring a total loss of Rs. (-) 36,75,81,217/- and the return of income was processed u/s 143(1) of the Act. Subsequently, the case was selected for scrutiny and notice u/s 143(2) and 142(1) of the Act along with questionnaire was issued. The A.O on perusal of the financial statements and the computation of income has dealt on the provisions of Sec. 44 of the Act and considered the provisions of IRDA Act 1999. Finally, the A.O. has observed that the surplus in form- 1 should be offered for tax without any modification and Hence Rs. 30,95,34,000/- is added to total income. The A.O. mentioned in the order that in the assessee's own case for the A.Y 2009-10 to A.Y 2012-13, the Hon'ble ITAT Mumbai decision was not accepted by the revenue and the appeal was filed u/s 260A of the A....
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....al and written submissions made during the course of hearing as well as facts of the case, decision on various grounds are adjudicated as under: 4.1 Ground No.1 - This ground is general in nature, hence no adjudication. 4.2 Ground No.2: 4.2.1 Vide this ground appellant has agitated against disallowance on account of considering the surplus disclosed in Form-I of Rs. 30,95,34,000/- as the income of the appellant. Identical issue had come up in appeal in appellant's own case for A.Ys. 2010-11, 2011-12, 2012-13 & 2014-15. The relevant part of the order of A.Y. 2014-15 dated 24.08.2018 is reproduced as under: 1.1.1. The appellant is an insurance company on Life Insurance business in India and is registered under IRDA 1999. As per IRDA 1999 and regulation therein the appellant has to maintain two separate accounts i.e. shareholder Account and Policyholder Account for the business as a whole Viz Revenue account and Profit and Loss Account. 1.1.2. As per the provisions of Income Tax Act, 1961 (Act) the computation of profits and gains from business of life insurance is governed by the provision of section 44 read with Rule 2 of First Schedu....
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....ion in case of ICICI prudential Insurance company Ltd Vs Asst CIT (ITA no 6854/55/5659/Mumbai/2010) & (ITA no 7765/66/67/Mumbai/2010) supports the contention of the appellant and the relevant extract is reproduced as under: "39. It is also on record that assessee followed the IRDA recommendations and accordingly prepared the actuarial valuation report including the surplus or deficit. However, Rule-2 prescribes only actuarial valuation in accordance with the insurance Act, 1938. Therefore, AD is duly bound to insist on actuarial valuation in accordance with the Insurance Act, 1938, so as to bring to tax the surplus or deficit. IA/fiat we notice is that AD, ignoring Rule-2, has relied on the actuarial valuation report prescribed under the IRDA recommendations under Regulation 8 that too at 'Total surplus', which is at variance with the Insurance Act, 1938. Since no amendment was brought to Rule-2 to incorporate IRDA recommendations, we are of the opinion that the action of AO in relying on the IRDA Regulations is not according to the law. Assessee had submitted its accounts as stated above, which are in accordance with the Insurance Act, 1938. Instead of ex....
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....l in the above referred cases in general and ICICI Prudential Insurance (supra) in On perusal of the same, we find that it is the conclusion of the said that the sums transferred from account to the other of the same assessee to the deficit if any do not amounts to the chargeable income of the assessee - the insurance company. Relevant extract from the said orders of the Tribunal are already incorporated in the paragraphs above. Thus, in principle, the issues raised by the assessee in its grounds stand covered. Accordingly, the grounds I to 4 raised in the appeal for the AY 2003-04 are allowed and ground 5, being general in nature, does not need any specific adjudication." 1.1.11. Also the Jurisdictional Mumbai Tribunal decision in case of The DCIT Vs Ws Kotak Mahindra Old Mutual Life Insurance Ltd and HDFC Standard Life Insurance Company Ltd Vs DCIT IITA no. 2203 to 2207/Mum/2011, ITA No. -3000 to 3004/Mum/2011, ITA No. 4959/Mum/2011, ITA No. 4960/Mum/2011, ITA No. 5493/Mum/2011, ITA No. 5494/Mum/2011, ITA No. 5591/Mum/2012.1 supports the contention of the appellant. 1.1.12. Considering the discussion held above and after analyzing the Forms, regulations....
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....Rs.11,39,67,0001- is not at all correct and AO is directed to modify the order accordingly. Therefore, this ground of appeal is allowed." 4.2.2 Since the facts in the present case are per material with the facts of the appellant's own case for A.Y.2014-15 and respectfully following the decision of the Hon'ble ITAT in appellant's own case for A.Y.2011-12, appeal of the appellant is allowed and addition of Rs.30,95,34,000/- is deleted. Therefore, this ground of appeal is allowed. Ground.3 4.3.1 Vide this ground the appellant has agitated against disallowance of loss from pension fund of Rs.83,000/-. Identical issue had come up in appeal in the appellant's own case for A.Ys. 2010-11, 2011-12, 2012-13, 2013-14 & 201415. The Relevant part of order of A.Y. 2014-15 dated 24.08.2018 is reproduced as under: "2.1.1 I have heard the contention and have gone through the relevant material available on record. In view of above I have observed that the appellant is into the life insurance business and it is undisputed fact that Pension Fund business is a part of Life Insurance business. 2.1.2 It is also observed that Pension Fund scheme....