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2014 (10) TMI 968

the First Schedule, it is clear that the profit and gains of the present assessee are to be computed in accordance with Rule-5 as applicable to the relevant year. A plain reading of this rule signifies that the profit as disclosed in the annual accounts, prepared in accordance with relevant Schedule of insurance Act, is to be taken as total income, subject to the adjustment, specifically provided in clauses (a) and (c). Clause (b) was omitted by the Finance Act 1988, w.e.f. 1.4.1989. The only effect of section 44 is that the operation of provisions referred to therein are excluded in the case of an assessee who carries on insurance business and in whose case the provisions of Rule-2 of the First Schedule are attracted. - Section 44 is a .....

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rofit on sale of investments are not liable to be taxed in the hands of the assessee without appreciating that clause (b) to Rule 5 of the First Schedule has been omitted by the Finance Act w.e.f. 1/4/1989. 2. At the time of hearing the ld. CIT-DR, Ms. Parminder Kaur defended the conclusion drawn in the assessment order and advanced her argument identical to the grounds raised in the grounds of appeal. On the other hand, Shri Farrokh V. Irani, ld. Counsel for the assessee, supported the conclusion drawn in the impugned order by further submitting that the issue in hand is covered by the decision from Hon'ble Jurisdictional High Court in the case of General Insurance Corpn. of India vs. DCIT (2012) 342 ITR 27 (Bom.). 3. We have considere .....

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.1989. The only effect of section 44 is that the operation of provisions referred to therein are excluded in the case of an assessee who carries on insurance business and in whose case the provisions of Rule-2 of the First Schedule are attracted. The Hon'ble Jurisdictional High Court has elaborately discussed the issue of reassessment and effect of amendment of section 147 of the Act and the wider power of the AO w.e.f. 1/5/1989 after considering circulars and held that re-assessment proceedings are not valid merely on the basis of change of opinion. Part A of the first Schedule containing Rules 1 to 4 deals with profit of Life Insurance business while part-B consisting of Rule-5 deals with computation of profits and gains of other insu .....

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n insurance business there will be no assessment of income under the heads Interest on securities, Income from house property, capital gains and assessment has to be made under the head profit and gains of business or profession meaning thereby the profit and gains are to be completed in accordance with the rules contained in the first schedule. Section 44 is a special provision enshrined in the Act for ascertaining the profit and gains of an assessee carrying on the business of insurance. Thus it can be said that special provision overrides the general provision. In view of this legal position the amount of profit, as disclosed by the P&L Account are to be drawn as per the insurance Act. Our view further finds support from the decision .....

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