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2020 (10) TMI 558 - ITAT MUMBAITaxability u/s 44 - Taxability of life insurance business - consistently followed and accepted accounting policy - transfer between share holder’s account and policy holder’s account - assessee prepared its accounts as per the format prescribed by the IRDA in tune with the Insurance Act 1938 - HELD THAT:- As decided in own case for AY 2012-13 [2019 (11) TMI 1463 - ITAT MUMBAI] the appellant has to prepare its accounts as per the formats prescribed by the IRDA under the Insurance Act, 1938. These accounts have accordingly been prepared by the appellant and have been subject to statutory audit. Further, the accounting policy of claiming 100% depreciation in its financial statements has been consistently followed by the appellant and has also been duly accepted by the IRDA. The appellant has stated that the assets on which depreciation has been claimed have been initially capitalized in the books and then 100% depreciation has been claimed on these assets. Taxation of Lift Insurance is presumptive taxation with only the surplus as disclosed by Form I being subjected to tax - as per the provisions of law only those adjustments which are expressly not prohibited under section 44 of the Act could be made. Consequently depreciation which has been debited in the audited accounts as per the consistently followed and accepted accounting policy need not be disallowed. After considering the rival submissions, we are of the opinion that the action of the CIT(A) in deleting the amount is consistent with the accounting principles followed and the provisions of section 44 read with Rule 2 of the 1st Schedule, Therefore we uphold the order of the CIT(A) and dismiss the ground raised by the Revenue Claim of 100% depreciation on fixed assets - HELD THAT:- Action of the CIT(A) in deleting the amount is consistent with the accounting principles followed and the provisions of section 44 read with Rule 2 of the 1st Schedule, Therefore we uphold the order of the CIT(A) and dismiss the ground raised by the Revenue.
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