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2013 (10) TMI 1130 - AT - Income TaxDetermination of Income u/s 44 from Insurance Business - Disallowance u/s 14A Held that:- Sec. 14A contemplates an exception for deductions as allowable under the Act are those contained under ss. 28 to 43B of the Act, Sec. 44 creates special application of these provisions in the cases of insurance companies - It is not permissible to the AO to travel beyond s. 44 and First Schedule of the IT Act Reliance has been placed on the Dy. CIT v. Oriental General Insurance Co. Ltd. [2004 (9) TMI 323 - ITAT DELHI-C], wherein it was held that section 44 creates a special provision in the cases of assessment of insurance companies therefore it was not permissible to the AO to travel beyond s. 44 of First Schedule of IT Act. In the present situation the provisions of s. 14A need not to apply while granting exempt ion to an income earned on sale of investment primarily because of the reason of the withdrawal or deletion of sub-r. 5(b) to First Schedule of s. 44 of IT Act Decided in favor of Assessee. Allowance of amount transferred to Unexpired Risk Reserve (URR) on terrorism Held that:- As per Rule 5, of Schedule I, read with Rule 6E, the appellant is entitled to claim deduction for any reserve for unexpired risks at the rate of 100% on account of terrorism. This is also in keeping with IRDA Regulations 2002 - A.O's discretion is limited to the adjustments provided in Rule 5, to schedule 1; other than which he is liable to accept the figures of profit as computed under the insurance Act. In the circumstances, this ground of appeal is allowed and the A.O is directed to allow URR on terrorism @ of 100% - Unexpired Risk Reserve on terrorism created at 100% of the net premium income of such business is allowable in view of the Rule 5 of Schedule 1 r.w.r. 6E of the Income Tax Rules Decided in favor of Assessee.
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