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2019 (8) TMI 574

..... t persuaded to take a view different from that of the Mumbai Bench of the ITAT ICICI Prudential Insurance Co. Ltd. v. ACIT [2012 (11) TMI 13 - ITAT MUMBAI] which has been affirmed by the Bombay High Court VERSUS ICICI PRUDENTIAL INSURANCE CO. LTD. [2015 (7) TMI 1259 - BOMBAY HIGH COURT]. Indeed on a conjoint reading of Section 44 with Rule 2 of the First Schedule to the Act, the Court is unable to discern any distinction between the income earned on the policy holder’s account and income from investments shown in the shareholder’s account for computation of the profits and gains of life insurance business for the purposes of taxation. In the considered view of the Court, the only question which would require consideration is abo .....

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..... ITA No. 142/Del/2017 for the Assessment Year (AY) 2010-11. 2. Having heard learned counsel for the parties, the undisputed position that emerges as far as insurance business is concerned is that for determining the profits and gains of the insurance business, which would be liable to tax, the statutory scheme put in place is contained in Section 44 of the Income Tax Act, 1961 (Act) read with the First Schedule thereto. This is sacrosanct, particularly since Section 44 opens with a non-obstante clause notwithstanding anything to the contrary . 3. In the present case, life insurance business is being carried on by the Assessee. The question that arose for consideration was whether the actuarial surplus determined in terms of Rule 2 of the Fi .....

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..... ered as part of the profits and gains from insurance business, the Court finds that the ITAT has in the impugned order, discussed this in great detail. The ITAT noted the submission of the Assessee that the IRDA Regulations of 2002 required every insurer to prepare (i) policyholders' account which is in the nature of revenue account, and (ii) shareholders' account, which is in the nature of profit and loss account, apart from the balance sheet. This was only a change in the reporting format, so as to ensure transparency. There was no corresponding amendment made to Rule 2 of the First Schedule to the Act which sets out the computation mechanism for determining the profit of an insurance company. This continued to be governed by the .....

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..... ed whether any SLP has been filed, the learned AR was fair enough to concede that the SLP of the Revenue has been admitted by Hon'ble Supreme Court against the said decision of the Bombay High Court in the case of CIT vs. ICICI Prudential Life Insurance Co. Ltd. 242 Taxman159. 9. This Court is not persuaded to take a view different from that of the Mumbai Bench of the ITAT which has been affirmed by the Bombay High Court. Indeed on a conjoint reading of Section 44 with Rule 2 of the First Schedule to the Act, the Court is unable to discern any distinction between the income earned on the policy holder s account and income from investments shown in the shareholder s account for computation of the profits and gains of life insurance busin .....

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