TMI Blog2019 (8) TMI 1796X X X X Extracts X X X X X X X X Extracts X X X X ..... IT(A). No law contrary to the law relied by the Ld. Representative of the assessee has been produced before us. Taking into account all the facts and circumstances, we are of the view that the CIT(A) has decided the matter of controversy judiciously and correctly which is not liable to be interfere with at this appellate stage. Allowance of claim of dividend income u/s 10(34) - Addition raised on account of exemption of the claim u/s 10(23AAB) on account of income from pension scheme - HELD THAT:- We noticed that the CIT(A) has decided the issues on the basis of decision of Bombay High Court in case of Life Insurance Corporation of India [ 1977 (11) TMI 25 - BOMBAY HIGH COURT ] The facts are not distinguishable at this stage. No law contrary to the law relied by the Ld. Representative of the assessee has been produced before us. Taking into account all the facts and circumstances, we are of the view that the CIT(A) has decided the matter of controversy judiciously and correctly which is not liable to be interfere with at this appellate stage. - I.T.A. No.3385/Mum/2017 (Assessment Year: 2012-13) - - - Dated:- 29-8-2019 - SHRI RAMIT KOCHAR, AM AND SHRI AMARJIT SINGH, JM ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces of the case and in law, the Ld. CIT(A) was justified in ignoring the fact that the non-obstante clause in section 44 is not extended to section 10(23AAB) of the I.T. Act, 1961. 3. The brief facts of the case are that the assessee filed its return of income on 29.11.2012 declaring total income to the tune of ₹ 213,54,12,409/-. The return was processed u/s 143(1) of the I.T. Act, 1961. Thereafter, the case was selected for scrutiny and notices u/s 143(2) and 142(1) of the Act were issued and served upon the assessee. The assessee company was carrying on the business of life insurance‟ including life annuity linked, non-linked term, whole term assurance, pension business, long term health insurance, family insurance, group insurance, multiple cover insurance on linked and non-linked platform and any kind of assurance or insurance against any other kind of risk liability whether direct or indirect arising from happening of any event or the fulfillment or non-fulfillment of contingency, obligation or undertaking whatsoever and to carry on and transfer any and every kind of life insurance and reinsurance whether indoor or outside ending. On verification, it was found ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rofit from shareholder s account should be assessed under the head income from other sources and not under the head Insurance business . Hence he recalculated the income and bifurcated them under income from life insurance business and income other than life insurance business. 6.1.2 After examining the facts and circumstances of the case, I find that this issue has already been decided by my predecessors in the favor of the appellant company in different assessment years, where- in it was held that the income of the appellant company should be assessed under the head life insurance business only because shareholders account is integral and indivisible part of life insurance business. The bifurcation of total profit between revenue and P L A/c is a mere disclosure requirement without in any way, having impact on the real profit from business of insurance. It was argued before me that the two accounts are inseparable and for arriving at the profit of insurance business as whole one has to see the combined surplus in the two accounts. Support has been taken of the legal requirement of solvency margin requiring infusion of additional capital; obligation to invest funds of shareho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eem it necessary to advert the finding of the CIT(A) on record.:- 6.2.2 I have carefully examined the facts of the case, the stand taken by the A.O. in the assessment order, the grounds of appeal and the submissions filed by the appellant company during the appellate proceedings. Similar issue was evaluated by my predecessor in appellant's own case for earlier assessment years. 6.2.3 It is seen that the Hon'ble Supreme Court in the case of Life Insurance Corporation of India v/s CIT, Delhi and Rajasthan [51 ITR 0773] has dealt with the issue of mathematical reserve, which may be negative, is called 'Negative Reserve', Where the value of future income extends the value of estimated liabilities. However, in terms of regulations governing the insurance business, such a negative reserve has b be ignored and has to be taken as zero. The Hon ble Supreme Court has in the case o LIC (Supra), held that the assessing officer shall not disturb such accounting methodology which is regulated under the Insurance Act. Further, Hon ble Tribunal vide order bearing ITA No.4066/MUM/2011, ITA No.1897/MUM/2012, ITA No.5112Th1um/ 2012 and ITA No.2576/Mum/2014 for A.Y.2007-08 to 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... passed by the CIT(A) in question. Before going further, we deem it necessary to advert the finding of the CIT(A) on record.:- 6.3.2 I have gone through the assessment order and submission made by the Ld. AR. I am also in the view that section 10(34) is independent to the provisions of section 44 of the Income Tax Act, 1961. Therefore, while calculating the income of a life insurance business as per the rule 2 of the first schedule it is considered by the actuary for calculating the surplus of such business. Hence, by virtue of section 10(34) of the Income Tax-Act; 1961 the exemption is available to the assessee while computing the taxable income. Also, the same view is approved by the Hon ble High Court of Bombay in case of Life Insurance Corporation of India vs. Commissioner of Income Tax reported in 115 ITR 45 (Bom), Hon'ble Mumbai Tribunal in the case of ICICI Prudential Insurance Co. Ltd vs. Asstt. Commissioner of Income Tax Circle- 6(1) (2012-TIOL-580- ITAT-MUM-ITA No.7765/MUM/2010) and Hon'ble Mumbai Tribunal in the case of SBI Life vs Commissioner of Income Tax - 1, Mumbai, (2013-TIOL-681-ITAT-MUM, ITA No.6366/ Mum/2011). It is also noteworthy that the Hon'b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2, 3703, 6221/Mum/2012. in the case of ICICI Prudential Insurance Co. Ltd vs. Asstt. Commissioner of Income Tax Circle-6(1),(2012-TIOL-580-ITAT-MUM-ITA No.7765/ MUM/2010). in the case of HDFC Standard Life Insurance Co. Ltd (ITA No. 4959/Mum/2011 ITA No.5494/Mum/2011) and Hon'ble Mumbai Tribunal in the case of SBI Life (assessee) by ITA No.3495/Mum/2014 2863/Mum/2015. Also, on the redirect matter by Hon'ble Mumbai ITAT on the appeal no. ITA No.1501/Mum/2009, ITA No.3346/Mum/2009. The AO has also passed the favorable order after considering the facts for allowing the exemption of income from pension business in the light of decision of ICICI Prudential Insurance Vs AC1T Vide ITA Nos.6854 to 6856, 7765 and 7213/ Mum/2012. Since the facts are identical, therefore, respectfully following the decision of Hon'ble High Courts, the ground is decided in favour of the appellant. Accordingly, addition of ₹ 132,59,95,816/- made by the AO on account of income from pension segment u/s.10(23AAB) is deleted and ground of appeal is allowed. 11. On appraisal of the above mentioned order, we noticed that the CIT(A) has decided the issues on the basis of decision of Bombay Hi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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