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2010 (9) TMI 1117 - AT - Income Taxdisallowance of expenses - increase of share capital - software expenses - HELD THAT:- By placing reliance in the case of Life Insurance Corporation of India vs. CIT[1963 (12) TMI 5 - SUPREME COURT], we find that there is no dispute that assessee company is engaged in the business of Life Insurance and the assessee has filed auditors report supported by actuarial valuation appearing at 1-44 of assessee's paper book, therefore, the provisions of sec. 044 read with rules in the first Schedule to the l apply and the AO has no power to do anything not contained u/s.44 of the Act. The actual computation of profits and gains of insurance business shall have to be computed in accordance with Rule-5 of the First Schedule. In the light of these special provisions having non obstante clause, the AO is not permitted to travel beyond these provisions and accordingly the disallowance of ₹ 11.00 lacs on account of expenses for increase of share capital and ₹ 2,65,112/- of software expenses made by the AO and sustained by the ld. CIT(A) is deleted. The grounds taken by the assessee are, therefore, allowed.
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