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2017 (8) TMI 1644 - ITAT MUMBAIClaim of deduction on account of negative reserve - AO held that the negative reserve was taxable as business income of the assessee and added the same to the total income - HELD THAT:- As in case HDFC STANDARD LIFE INSURANCE COMPANY LTD. AND OTHER VERSUS DCIT (OSD) -1 (1) MUMBAI AND OTHERS [2013 (10) TMI 1072 - ITAT MUMBAI] allowed the claim of the assessee - examining the method of accounting and the mandate given by regulations to appoint Actuarial on the concept of mathematical reserves we do not see any reason to interfere with the order of the CIT(A).The mathematical reserve is a part of Actuarial valuation and the surplus as discussed in Form-I under Regulation 4 takes in to consideration this mathematical reserve also. Therefore the order of the order of the CIT(A) is approved.Moreover the Assessing Officer has no power to modify the amount after actuarial valuation was done, which was the basis for assessment under Rule 2 of 1st Schedule r.w.s.44 of the I.T. Act.The principle laid down by the Hon'ble Supreme Court in LIC vs.CIT [1963 (12) TMI 5 - SUPREME COURT] about the power of the Assessing Officer also restricted the scope and adjustment by the AO. Revised computation of income excluding pension business deficit - assessee had reduced an amount on account of deficit from linked pension scheme in view of the exemption provided in section 10(23AAB) - HELD THAT:- As in case HDFC STANDARD LIFE INSURANCE COMPANY LTD. AND OTHER VERSUS DCIT (OSD) -1 (1) MUMBAI AND OTHERS [2013 (10) TMI 1072 - ITAT MUMBAI] the object of inserting section 10(23AAB) as per the Board Circular No. 762, dated February 18, 1998 was to enable the assessee to offer attractive terms to the contributors. Thus, the object of inserting section 10 (23 AAB) was not with a view to treat the pension fund like the Jeevan Suraksha Fund outside the purview of insurance business but to promote the insurance business by exempting the income from such fund. Therefore in the facts of the present case, the decision of the Income-tax Appellate Tribunal in holding that even after insertion of section 10(23AAB), the loss incurred from the pension fund like the Jeevan Suraksha Fund had to be excluded while determining the actuarial valuation surplus from the insurance business under section 44 of the Income-tax Act, 1961, cannot be faulted. Accordingly, questions (c) and (d) are answered in the affirmative, that is, in favour of the assessee.
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