TMI Blog1982 (2) TMI 42X X X X Extracts X X X X X X X X Extracts X X X X ..... l insurance company. It carries on business with head office in India and branches abroad. For the account year ended December 31, 1966, the company's profit and loss account showed an item described as " profit due to devaluation Rs. 7,75,720. " The ITO brought to charge the whole of this sum for the purpose of income-tax, since it represented the balance of profits according to the assessee's ow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al, the assessee's foreign branches were nothing but projections of the assessee's head office. The Tribunal relied on the principle that no man can earn a profit from himself. On this basis the Tribunal held that the assessee could not be said to derive any profit merely by converting and revaluing in terms of the devalued Indian rupee, the assessee's own net assets in foreign branches. On this b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ealt with in a special way by the taxing statute, apparently out of consideration for the peculiar nature of the insurance business and the special considerations which govern the computation of profit or loss from such business. Section 44 of our I.T. Act, 1961, lays down that the profits and gains of any business of insurance have got to be computed, not under the provisions contained in the bod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the figures. The ITO may make some adjustments here and there under cls. (a) to (c) of r. 5, but barring these adjustments, what the assessee displays in its annual accounts as its balance of profits is not open to alteration or even rectification. In this case, the claim to exclude from the balance of profits Rs. 4,58,049 was made by the assessee on general principles, and not with reference t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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