TMI Blog2021 (10) TMI 1419X X X X Extracts X X X X X X X X Extracts X X X X ..... und - HELD THAT:- As we are of the considered view that Ld.CIT(A) has rightly deleted the addition made by the Assessing Officer on account of loss from Pension Fund being exemption under section 10(23AAB) of the Act. So we find no scope to interfere into the finding by Ld.CIT(A). - SHRI S RIFAUR RAHMAN, ACCOUNTANT MEMBER AND SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER For the Appellant : Shri S.N Kabra, CIT DR For the Respondent : Ms. Dinkle Hariya, AR ORDER PER PAVAN KUMAR GADALE JM: The Revenue has filed the appeal against the order of the Commissioner of Income Tax (Appeals)-16, Mumbai passed u/s 143(3) and 250 of the Income Tax Act, 1961. The Revenue has raised the following grounds of appeal: 1. Whether on the facts and in the circumstances of the case and in law, the CIT(A) was justified in deleting the addition made by the AO on account of Surplus disclosed in Form No. 1 of Actuarial Report ignoring the provision of Sec. 44 r.w.s 2 of the First Schedule of IT Act, 1961? 2. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) was justified in deleting the addition made by the AO on account of loss from pensi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tribunal and has granted relief. Whereas, the revenue has challenged the Hon ble Tribunal order before the Hon ble Jurisdictional High Court in appeal and prayed for allowing the revenue appeal. 5. Contra, the Ld.AR supported the order of the CIT(A) and substantiate the submissions with the decisions of the Hon ble Tribunal in the assessee own case for the A.Ys. 2011-12 to 2013-14 and filed the paper book. 6. We heard the rival submissions and perused the material on record. Prima-facie, the sole crux of the disputed issues is in regard to the CIT(A) has erred in granting the relief to the assessee relying on earlier years decision of the Hon ble Tribunal in respect of surplus as per Form no -1. The Ld.DR has fairly accepted the earlier decisions and submitted that the Revenue has challenged the Hon ble Tribunal decision before the Hon ble High Court. At this juncture, we considered it appropriate to refer to the observations of CIT(A) dealt at Para 4 to 4.3.2, which is read as under; I have carefully perused the assessment order of the AO and the submissions made by the AR in support of his arguments. After taking into consideration, the A.O's findings and the appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncorporate the changes brought by IRDA 1999 there is no corresponding amendment was brought into Rule 2 of the First Schedule of the Act to incorporate IRDA recommendations. Therefore, the manner of taxing life insurance companies has not been realigned with the changes as prescribed by IRDA 1999. 1.1.6. Thus as stated by me in Para 1.4.6 there is substantial difference between New format of Form I which includes only Policyholder account whereas the Old format of Form I takes into consideration the aggregate result of Shareholder Account and Policyholder Account. 1.1.7. It is undisputed fact that Policyholder Account and Shareholder Account forms part of Insurance business and therefore to determine surplus taxable under Rule 2 of First Schedule one cannot refer to New Format of Form I in isolation. 1.1.8. Considering the discussion held above it is evident that that surplus or deficit amount as defined under Rule 2 of First Schedule of Section 44 of the Act should be arrived at after adjusting both accounts i.e. Shareholder's Account and policyholder Account. 1.1.9. The jurisdictional Mumbai Tribunal decision in case of ICICI prudential Insurance company Ltd Vs As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s that the computation made by assessee is in accordance with Rule-2 of the Insurance Act 1938 according to which only AO can base his computation. This also corresponds to the way incomes were assessed in earlier years i.e. the correct method as per Rule 2 and Sec. 44 of IT ACT. In view of the discussion above and after analyzing the Forms, Regulations and Provisions we have no hesitation to hold that the assessee working of actuarial surplus/deficit is in accordance with Rule 2 of First Schedule. Therefore, assessee grounds on this issue are allowed and AD is directed to modify the order accordingly. Ground Nos. 1 to 3 are considered allowed . 1.1.10. Further, Jurisdictional Mumbai Tribunal decision in case of SBI Life Insurance company Limited Vs ft. CIT (ITA No. 3800 to 3801,1501,5670/Mum/2009 ITA no. 4139/Mum/2008,3346,5759/Mum/2009 dated 23 May 2014. 5. We have heard both the parties and perused the orders of the Revenue Authorities as well as the cited decisions of the Tribunal. We have carefully examined the grounds raised in the appeals qua the conclusions of the Tribunal in the above referred cases in general and ICICI Prudential Insurance (supra) in On perusal o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plus as arrived at by actuarial valuation and further held that income from shareholders account was also to be taxed as a part of life insurance business, there was no substantial question of law arising for consideration. Reference was made to the decision in LIC of India vs. CIT (1964) 51 ITR 773, wherein the Hon'ble Supreme Court has held that the Assessing Officer has no power to modify the account after actuarial valuation is done. The issues in 1st, 2nd 3rd ground of appeal in the instant case are squarely covered by the above judgement. Respectfully following the same, we dismiss isty, 2nd 3rd ground of appeal filed by the revenue. 6.1.3 Since the facts in the' present case are per material same with the facts of the appellant own case for A. Y.201011 2011-12 decided by me, and respectfully following the decision of the Hon'ble ITAT in appellant's own case for A. Y.2011-12, hence maintaining consistency, the action of the AO bring to tax the Total Surplus' as computed under Regulation 8 amounting to Rs.11,39,67,0001- is not at all correct and AO is directed to modify the order accordingly. Therefore, this ground of appeal is allowed. 4. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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