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2019 (7) TMI 1908 - AT - Income TaxApplicability of section 14A on insurance business - Addition u/s 14A r.w.r 8D - As argued applicant being insurance company and his total income is computed as per the provisions of section 44 provisions of section 14A read with rule 8D do not apply - HELD THAT:- As decided in own case [2016 (11) TMI 598 - ITAT MUMBAI] dismiss this ground of appeal of the revenue and direct the AO to delete the addition as held that Tribunal was justify 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 - Decided against revenue. Addition made on account of increment in negative reserves - HELD THAT:- We find that the assessee followed the IRDA Recommendations and accordingly prepared the actuarial valuation report including the surplus or deficit. The Rule 2 prescribes only actual valuation in accordance with Insurance Act 1938. Looking at the issue, we noticed that the computation made by the assessee is in accordance with Rule 2 of the Insurance Act 1938, according to which only AO can base his computation. The Revenue has not contested that the working of actuarial surplus / deficit is not in accordance with Rule 2 of 1st Schedule. Accordingly we are of the view that the CIT(A) has rightly deleted the addition and we confirmed the same. Since, the coordinate Bench has decided the identical issue in favour of the assessee by upholding the findings of the Ld. CIT (A) in assessee’s own case for the AY 2010-11[2016 (11) TMI 598 - ITAT MUMBAI] and since there is no change of facts in the present case, we do not find any reason to take a different view. Hence, respectfully following the decision of the coordinate Bench, we dismiss this ground of appeal of the revenue and direct the AO to delete the addition Addition on account of non granting of deduction taken u/s 10(23AAB) - as argued income includes loss and the income from pension fund does not form part to the total income of the assessee u/s 10(23AAB) - AO held that since income from such pension business is exempt u/s 10(23AAB), the losses incurred has to be treated as exempt and further held that such losses cannot be carried forward - HELD THAT:- As decided in own case [2016 (11) TMI 598 - ITAT MUMBAI] the object of inserting section 10(23AAB) as per the Board Circular No. 762, dated 18/02/1998 was to enable the assessee to offer attractive terms to the contributors. Thus, the object of inserting section 10(23AAB) was not with a view to treat the pension fund like jeevan Suraksha Fund outside the purview of insurance business but to promote insurance business by exempting the income from such fund. Therefore, in the facts of the present case, the decision of the Income-tax Appellate Tribunal in holding that even after insertion of section 10(23AAB), the loss incurred from the insurance business under section 44 of the Income-tax Act, 1961 cannot be faulted. Accordingly, questions(c) and (d) are answered in the affirmative, that is, in favour of the assessee and against the revenue.
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