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2020 (2) TMI 849 - HC - Income TaxIncome from insurance business - Taxable income of the assessee Company as assessed u/s 44 read with the First Schedule - Profits and Gains of Insurance Business declared by the assessee - CIT (Appeals) issued the direction which reads as that the net income in the non-technical shareholders’ account of the appellant was ₹ 1,31,04,000/- and, after contribution to the policyholders’ fund at ₹ 9,22,41,000/-, the net loss from insurance business of the appellant was ₹ 7,91,37,000/-. The AO is directed to assess the income of the appellant at this amount - HELD THAT:- Direction issued by the CIT (Appeals) in paragraph 4.3 of its order could not have been issued, since with the issuance of the said direction, the power of the Assessing Officer to discharge his function of carrying out the assessment stands denuded. Merely because profits of life insurance business are liable to be computed in terms of Section 44 read with Rules contained in the First Schedule, it does not follow that the Assessing Officer is denuded of his authority to carry out scrutiny while making the assessment. Even to arrive at a conclusion whether, inter alia, Rule 2 of the first Schedule has been complied with by the assessee, the Assessing Officer would have to look into the books maintained by the assessee and he is not bound to swallow the facts and figures placed before him by the assessee with a claim that the profits of life insurance business have been computed in terms of Rule 2 and the other Rules of the First Schedule. Answer the aforesaid question in favour of the revenue. Learned counsel for the respondent has also sought to urge that the CIT (Appeals) could not have remaded the matter back to the Assessing Officer and he was bound to carry out the assessment on his own. However, we find that the assessee did not prefer an appeal against that part of the order passed by the CIT (Appeals) before the Tribunal and also did not prefer any cross objections to that effect before the Tribunal. We are, therefore, not inclined to interfere with the direction of remanding the proceedings to the Assessing Officer. We, while, answering the question in favour of the revenue, direct that the Assessing Officer shall proceed to compute the profits from life insurance business strictly in terms of Section 44 read with the Rules contained in the First Schedule of the Income Tax Act.
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