TMI Blog1990 (2) TMI 4X X X X Extracts X X X X X X X X Extracts X X X X ..... cent., which was the minimum permissible under Explanation 2 to paragraph 1 of Part A of the First Schedule to the Life Insurance Corporation Act, 1956, and not the surplus allocated by the assessee to the shareholder during the relevant period ? 2. Whether, on the facts and in the circumstances of the case and on a proper interpretation of section 55(1)(b) of the Income-tax Act, 1961, the Tribunal was right in holding that there was improvement in the capital asset of the assessee after January 1, 1954 ? 3. Whether there was any evidence to support the finding of the Tribunal that the improvement in the capital asset of the assessee could not be estimated at less than Rs. 3,98,000 and whether such findings were unreasonable or perverse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... compensation and provides as follows : "The compensation to be given by the Corporation to an insurer having a share capital on which dividend or bonus is payable who has allocated as bonus to policy-holders the whole or any part of the surplus as disclosed in the abstracts prepared in accordance with Part 11 of the Fourth Schedule to the Insurance Act in respect of the last actuarial investigation relating to his controlled business as at a date earlier than January 1, 1955, shall be computed in accordance with the provisions contained in paragraph 1 or paragraph 2, whichever is more advantageous to the insurer." Paragraph 1 of the said Schedule provided as follows: "Twenty times the annual average of the share of the surplus alloca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edule to the Insurance Act " mentioned in Part A of the First Schedule to the Life Insurance Corporation Act cannot be construed to mean that a surplus amount was to be paid to the insurance company. Mr. Mitra next contended on the second question that there was no improvement in the capital assets of the assessee after January 1, 1954, and the finding of the Tribunal in this regard was unreasonable and perverse. The Tribunal, in its judgment, has observed as follows: "...If the Department's stand is taken to its logical conclusion, it would mean that the value of the assets would become zero in case no part of the surplus was allocated to the shareholders . . . ..." The last contention of the assessee before us was that the Income ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... missioner dismissed this contention of the assessee by merely holding that the improvement in the value of the asset could be considered only in the case of depreciable assets and since the entire business of the assessee was taken over, the determination of the depreciable assets could not be conceived of. As already stated above, we are of the opinion that the capital asset in the present case was the running business itself. It would, therefore, be wrong to say that the improvement in the cost of the capital asset would relate only to depreciable assets. " The Tribunal next addressed itself to the cost of improvement in the present case and held as follows : "As already stated above, there is no dispute that the total income assessed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... capital gains under section 45 of the Act." It cannot be said that the Tribunal's decision is without any basis and, as such, is perverse. The Tribunal had the entire evidence available on record and came to a decision on those facts in accordance with law. The Tribunal has pointed out that, after 20 years, it would not be fair to remand the case to the Department and ask the departmental authorities to look into the entire matter once again. On the basis of the available facts, the Tribunal has decided the case correctly and, in our opinion, the Tribunal has not done anything wrong in the way it has exercised its discretion in the matter. In that view of the matter, question No. 1 is answered in the affirmative and in favour of the as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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