Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2021 (10) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (10) TMI 928 - HC - Income TaxComputation of profit of Life Insurance business - interpreting the special provision under Section 44 of the IT Act while granting benefits to assessee- company - AO treating the surplus under shareholders account as income from business and taxed at normal rates. - HELD THAT:- In the assessee’s own case relating to the assessment year 2010-11, considering the challenge made to the order of the CIT that policyholder’s account and Shareholders’ account has to be considered separately and the benefit of Section 115B of the Act could be given only to the profits from life insurance business, Tribunal in the Assessee’s own case relating the earlier year has held that there is no dispute that assessee was doing only life insurance business as regulated by the IRDA. It has been categorically observed that CIT himself has mentioned that assessee was engaged in life insurance business. The question whether policyholders’ account and shareholders’ account, in the case of an assessee carrying on only the business of life insurance business was to be separated or consolidated, being considered by the Tribunal of Mumbai Bench in ICICI Prudential Insurance Co. Ltd.,[2012 (11) TMI 13 - ITAT MUMBAI], applied the same to the assesse’s case thereby allowing the appeal of the assessee and the same has reached finality. For the subsequent assessment years, the Tribunal has followed the decision of the Tribunal in assesse’s own case and has held that the surplus with deficit as per shareholders’ account should be aggregated with surplus with deficit in the policyholders’ account for determining the profit or loss of the assessee under Section 44 of the Act. In the case of ICICI Prudential Insurance Company Ltd., [2015 (7) TMI 1346 - BOMBAY HIGH COURT], identical question having considered, the High Court of Bombay has held that shareholders’ amount has to be considered as arising out of Life Insurance Business. We find no fault with the Tribunal in following this ruling which is squarely applicable to the case on hand. It is not the case of the revenue that the assessee is carrying on any other business other than life insurance business. Thus, Section 44 read with Rule 2 to Part-A of First Schedule to the Act is applicable to the facts of the present case, not Rule 5 of Part – B as canvassed by the Revenue. As brought to the notice of this Court Civil appeal filed by the Revenue against the judgment of the High Court of Bombay in ICICI Prudential Insurance Company Ltd., supra, is pending before the Hon'ble Apex Court. We answer the substantial questions of law in favour of the assessee
|