TMI Blog2017 (3) TMI 1696X X X X Extracts X X X X X X X X Extracts X X X X ..... on life insurance business and Tribunal following a decision of Supreme Court, while determining assessee’s income under section 44, had taken into consideration total surplus as arrived at by actuarial valuation and further held that income from shareholders account was also to be taxed as a part of life insurance business, there was no substantial question of law arising for consideration”. Reference was made to the decision in LIC of India vs. CIT [1963 (12) TMI 5 - SUPREME COURT] wherein held that the Assessing Officer has no power to modify the account after actuarial valuation is done. Income of assessee arising from activity unconnected with insurance business - determining actuarial valuation surplus from insurance business u/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial valuation was only transfer of capital asset and not taxable u/s44 of the Act read with Rule 2 of the first schedule. 2. Whether on the facts and in the circumstances of the case and in law, the Hon'ble Tribunal was correct in allowing the relief to the assessee by holding that surplus available both in Policy Holders Account and Share Holders Account is to be consolidated and only net surplus is to be taxed as income from Insurance Business. 3. Whether on the facts and in the circumstances of the case and in law, the ITAT is justified in restoring to assessing officer the issue of taxing income of assessee arising from activity unconnected with insurance business (consequent set off loss) without assigning any reasons wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2011-12 on 30.09.2011 disclosing total loss of ₹ 300,45,37,430. Subsequently, it filed a revised return of income on 30.03.2012 disclosing total loss of ₹ 320,16,20,117 following the judgement of the Hon'ble Bombay High Court in the case of CIT vs. Life Insurance Corporation of India Ltd. 338 ITR 212 (2011) in respect of loss from pension business u/s 10(23AAB) of the Act. FGLIC is a company registered under the Companies Act, 1956 and has obtained license to undertake the business of life insurance from Insurance Regulatory and Development Authority (IRDA). FGILIC maintains its regular book of accounts in accordance with the directions issued by IRDA which mandate preparation of Policyholders Account (called Revenue Account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is held: The fact that income from such fund has been exempted under section 10(23AAB) with effect from 1st April, 1997 does not mean that pension fund ceases to be insurance business so as to fall outside the purview of insurance business covered under section 44 of the Income Tax Act, 1961. In other words, the pension fund like Jeevan Suraksha Fund would continue to be governed by the provisions of section 44 of the Income Tax Act, 1961 irrespective of the fact that the income from such fund are exempted or not. Therefore, while determining the surplus from insurance business the actuary was justified in taking into consideration the loss incurred under Jeevan Suraksha Fund. The learned CIT(A) followed the above judgement and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeal in the instant case are squarely covered by the above judgement. Respectfully following the same, we dismiss 1st, 2nd 3rd ground of appeal filed by the revenue. 6.1 Now we turn to 4th, 5th, 6th and 7th ground of appeal as they address a common issue. In the case of Life Insurance Corporation of India Ltd. (supra), the assessee was engaged in the life insurance business. In its return of income for the A.Y. 2002-03, it computed actuarial valuation surplus by excluding the provision for reserve on account of solvency margin amounting to ₹ 3,500 crores and loss in Jeevan Suraksha Fund. The AO disallowed the claim of the assessee and passed the assessment order by adding the amount on account of the provision for solvency margi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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