TMI Blog2020 (2) TMI 849X X X X Extracts X X X X X X X X Extracts X X X X ..... the CIT (Appeals) in paragraph 4.3 of its order could not have been issued, since with the issuance of the said direction, the power of the Assessing Officer to discharge his function of carrying out the assessment stands denuded. Merely because profits of life insurance business are liable to be computed in terms of Section 44 read with Rules contained in the First Schedule, it does not follow that the Assessing Officer is denuded of his authority to carry out scrutiny while making the assessment. Even to arrive at a conclusion whether, inter alia, Rule 2 of the first Schedule has been complied with by the assessee, the Assessing Officer would have to look into the books maintained by the assessee and he is not bound to swallow the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... parties. Having heard the counsels, we are of the view that the following substantial question of law arises for our question: Whether on the facts and in the circumstances of the case, the Hon ble ITAT has not appreciated that without prejudice to the original stand of the revenue, even if it is held that the taxable income of the assessee Company is to be assessed u/s 44 read with the First Schedule, it does not mean that the AO has been totally precluded from examining the Profits and Gains of Insurance Business declared by the assessee and he has to mandatorily accept whatever has been declared by the assessee, as true and correct Total Income ? 2. The submission of learned counsel for the appellant is that the CIT (Appeals), w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eals) in paragraph 4.3 aforesaid was justified, since in accordance with the Rule 2 of the First Schedule Profits and gains of business or profession and the provisions of sections 30, 31, 32, 34, 36, 37, 38, 40, 40A [other than sub-sections (3) and (4) thereof], 41, 43, and 43A of the Income-tax Act shall, so far as may be, apply accordingly 4. The submission is that the Assessing Officer is bound to compute the profits from life insurance business in accordance with the aforesaid rules. Learned counsel for the respondent has also placed reliance on the decision of this Court in a batch of appeals, including ITA 475/2019, Principal Commissioner of Income Tax v. M/s. Sahara India Life Insurance Company, Ltd., wherein this Court ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... because profits of life insurance business are liable to be computed in terms of Section 44 read with Rules contained in the First Schedule, it does not follow that the Assessing Officer is denuded of his authority to carry out scrutiny while making the assessment. Even to arrive at a conclusion whether, inter alia, Rule 2 of the first Schedule has been complied with by the assessee, the Assessing Officer would have to look into the books maintained by the assessee and he is not bound to swallow the facts and figures placed before him by the assessee with a claim that the profits of life insurance business have been computed in terms of Rule 2 and the other Rules of the First Schedule. 7. We, therefore, answer the aforesaid question in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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