TaxTMI 
TaxTMI 
1966 (10) TMI 49
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....life insurance section was allowed by the revenue authorities to be carried forward and set off under section 24(2) of the Indian Income-tax Act, 1922, against profits from the general insurance section in the subsequent year. In proceedings for assessment for the assessment year 1951-52, the Income-tax Officer held that the life insurance business and the general insurance business carried on by the company were " distinct and separate " and the loss carried forward from the previous year in respect of life insurance business could not be set off under section 24(2) against the profit of the general insurance business. The Appellate Assistant Commissioner and the Tribunal confirmed the view of the Income-tax Officer. The Tribunal referred ....
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.... amount of claims arising in one year be set off as a deduction. Fifthly, the law under which life business is carried on is quite different from the laws governing general business; and, lastly, assessable profits of life business shall be computed separately from those of the general business, the consequence of which would be that the carry forward of loss of life business cannot be had against the profit of general business. " Tax payable by an assessee under the head " Profits and gains of business, profession or vocation " is normally computed under section 10(1) of the Income-tax Act, 1922, after making allowances mentioned in sub-section (2) of section 10. But sub-section (7) of section 10 provides that notwithstanding anything t....
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.... computing the surplus for the purpose of rule 2. Rule 5 is a definition clause. Rule 6 deals with the computation of profits and gains of any business of insurance other than life insurance, and provides that the profits and gains of any business of insurance other than life insurance shall be taken to be the balance of the profits disclosed by the annual accounts, copies of which are required under the Insurance Act, 1938, to be furnished to the Controller of Insurance after adjusting such balance so as to exclude from it any expenditure other than expenditure which may under the provisions of section 10 of the Act be allowed for in computing the profits and gains of a business. Rule 7 deals with the computation of profits and gains of co....
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....tood at the material time, provided : " Where any assessee sustains a loss of profits or gains in any year, being a previous year not earlier than the previous year for the assessment for the year ending on the 31st day of March, 1940, in any business, profession or vocation, and the loss cannot be wholly set off under sub-section (1), so much of the loss as is not so set off or the whole loss where the assessee had no other head of income shall be carried forward to the following year and set off against the profits and gains, if any, of the assessee from the same business, profession or vocation for that year. The words underlined were substituted by the Income-tax (Amendment) Act, 1953 (25 of 1953), for the words " under the head '....
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....l insurance business. Counsel for the Commissioner contended that life insurance business and general insurance business were separate businesses and he relied in support of that contention primarily upon the method of computation of taxable income of the life insurance business and of the general insurance business. Both in respect of the life insurance business and general insurance business, there are, as already mentioned, special methods of computation of income. But because there are distinct methods of computation of taxable income of the insurance business, and the general provisions of the Income-tax Act relating to computation of profits and gains of a business in section 10 and the related sections are inapplicable, it does no....
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.... the other, there would be a strong indication that the two businesses constitute " the same business ", but no decisive inference may be drawn from the fact that after the closure of one business another may conveniently be carried on. In the present case the Tribunal's judgment proceeds not upon any special circumstances governing the distinctive organization, management, accounts, methods of book-keeping or the peculiarities of the two businesses, but primarily upon the provisions of the Income-tax Act which provide different methods of computation of the taxable income of the life insurance business and of the general insurance business. We are unable to agree with the Tribunal, that, because in respect of the life insurance business....