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2015 (9) TMI 488 - AT - Income TaxReopening of assessment - as per section 115B the tax rate of 12.5% should have been applied only to the income earned from insurance business and for the other income, the tax at the rate of 35% should have been applied - Held that:- Since, the AO inadvertently, had applied lower tax rate of 12.5% on the entire income, hence, the AO had reasonable belief that the income of the assessee has escaped assessment. We find that this issue has been unsuccessfully contested by the assessee in appeal before the Ld. CIT(A). However, before us, the assessee has not raised any ground of appeal relating to rejection of his contention by the Ld. CIT(A) on this issue. Hence, it can be safely said that the belief of the AO regarding escapement of income in relation to the rate of tax leviable on income other than insurance income was correct and bonafide. Second reason relating to the escapement of income because of the assessee offering negative reserves at 'zero', had not come into the knowledge of the AO and no discussion had taken place in this respect. The AO was under bonafide belief that the assessee had wrongly adopted the value of negative reserves at 'zero'. It was therefore not a case of change of opinion. The case law cited by the assessee is, thus, not applicable to the present facts and circumstances of the case. We therefore, do not find any infirmity in the order of the Ld. CIT(A) so far the issue of reopening of the assessment is concerned. - Decided against the assessee. Addition of negative reserves to the actuarial surplus for determining the profit from business of Life Insurance - Held that:- Issue restored the matter to the file of the AO for fresh adjudication considering the decision of the Tribunal in the cases of "ICICI Prudential Co. Ltd." (2012 (11) TMI 13 - ITAT MUMBAI ) and "LIC" [1963 (12) TMI 5 - SUPREME Court] wherein held the Surplus has to be determined as per the report of the appointed Actuary as per the provisions of the Insurance Act. The AO has no power to make any adjustment against Actuarial surplus determined as per Insurance Act while making computation of total income - Decided in favour of assessee for statistical purposes. Applicability of provisions of section 14A while determining the income of the Life Insurance Company - Held that:- n view of the special provisions applicable to the insurance companies as provided under section 44 of the Act, the provisions of section 14A would not be applicable to the insurance companies. Respectfully, following the decision of the Tribunal in the own case of the assessee for subsequent assessment year, this issue is accordingly decided in favour of the assessee.
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