TaxTMI 
TaxTMI 
TaxTMI 
2024 (9) TMI 741
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....ssessment Years (A.Ys) 2003-04 and 2004-05 in terms of the provisions of the Income Tax Act, 1961 (Act). 2. The respondent/assessee is an Insurance Company that computes its income in line with the prescription of Section 44 of the Act, which is a specific provision relating to the computation of income of insurance businesses, that has to be in accordance with the Rules contained in the First Schedule. 3. The assessee filed returns of income declaring loss for both assessment years and seeking refunds. The returns were processed and an intimation was made under Section 143(1) for A.Y.2003-04 on 20.11.2003, subsequently rectified under Section 154 of the Act on 13.11.2006. An order of assessment was made under Section 143(3) for A.Y.2004-....
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....[255 ITR 273] (SC). In that case, the Supreme Court had dealt with the computation of net profits based on the entries in the P & L account that was prepared in accordance with Parts II and III of Schedule VI of the Companies Act. 8. Drawing an analogy from that judgment, the Assessing Authority concluded that once an entry was part of the P&L account, it was incumbent on the assessee to proceed with the computation based only upon such entries and there was no leeway available to exclude such profits. 9. As against the assessments, the assessee filed appeals before the first Appellate Authority, who, by common order dated 17.12.2007, allowed the appeals following the ratio of the judgment in K.P. Varghese vs The Income Tax Officer, Ernak....
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....e assessee and Ms.V.Pushpa, learned Senior Standing Counsel for the Revenue. 14. The admitted facts in this matter are that the assessee is an Insurance Company, which is bound to follow the method of computation as set out under Section 44 read with Rule 5(b) of the First Schedule to the Act. Rule 5, specifically clause (b) thereof, has been subject matter of amendment over the years in that the aforesaid clause stood deleted with effect from 1988 and restored with effect from 01.04.2011 (A.Y.2011-12). We are concerned with the applicability of the said clause for the interregnum period. 15. The purport behind clause (b) to Rule 5 was clear, to either include or exclude profits/losses from sale of investments, specific to insurance busin....
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....adjustments. One of the adjustments provided therein is in respect of any amount either written off or reserved in the accounts to meet depreciation or loss on the realisation of investment which is to be allowed as deduction. Similarly, any sum credited to the account, due to appreciation of or gain on the realisation of investment, is taken as part of the profits and gains of the business. To enable the General Insurance Corporation and its subsidiaries to play a more active role in capital markets for the benefit of policy holders, the Finance Act has amended sub-r.(b) of R. 5 of the First Schedule to provide for exemption of the profits earned by them on the sale of investment. As a corollary, it has also been provided that the losses I....
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....dated 14.02.2022. However, since, in conclusion, the matter had only been remanded to the Tribunal, the Bench has clarified that there was no prejudice caused to the assessee, as the issue could well be gone into by the Tribunal. The Review Petitions were ultimately closed with those observations. Consequent upon the aforesaid orders of this Court, the Tribunal has passed an order on 28.06.2023, applying the ratio of the decision in United India Insurance Company (Foot Note Supra 3) and deciding the issue in favour of the petitioner. 22. With this, we find no necessity whatsoever to remand the matter as the facts in issue as well as the applicability of law to those facts is very clear as borne out from the statutory position, and the deci....