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2014 (5) TMI 1067 - AT - Income TaxTaxable income of Insurance Company u/s 44 - nature of the funds transferred from shareholders’ Accounts to the Policyholders’ Account to meet out the deficiencies - Held that:- under the provisions of IRDA Act, the assessee is under obligation to maintain separate accounts namely ‘policy holders account’ and the ‘shareholders account’. In case, there is income deficiency in policy holders’ account, the funds are transferred from the shareholders account otherwise, both these accounts are part of the business of the assessee and it is case of transfer of funds from one hand to the other of the same person. Such transfer of funds to policy holders’ accounts should not be treated as income as it is a case of transfer of funds from one hand to the other. It is a tax neutral transaction. This issue is now settled by the decisions of the Tribunal in the case of ICICI Prudential Insurance vs. ACIT [2012 (11) TMI 13 - ITAT MUMBAI] - Decided in favor of Assessee. Applicability of provisions of Section 14A on insurance Companies - dis-allowance of expenditure related to exempted income - Held that:- in view of the special provisions applicable to the insurance companies, we are of the opinion that the provisions of section 14A r.w.r. 8D were held not applicable to the insurance companies i.e., ICICI Prudential Insurance, HDFC Standard Life Insurance Company. Therefore, the SBI Life Insurance Company Limited (assessee in the present case should not be any exception. Considering the settled nature of the issue vide the decisions of the Tribunal’s orders - Decided in favor of assessee.
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