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2016 (11) TMI 598 - ITAT MUMBAIApplicability of section 14A on insurance business - Held that:- In view of non obstante clause of Section 44 of the Act read with Rule 5 of Schedule 1 of the Act, provisions of Section 14A of the Act, as no application to the profit and gains of insurance business. See Bajaj Allianz General Insurance Company Limited. Versus Additional Commissioner Of Income-Tax. [2009 (8) TMI 810 - ITAT PUNE-A] Claim of exemption under section 10(23AAB) of surplus of Participating Pension Business and also dividend under section 10(34) allowed Addition on account of negative reserve at zero, the surplus of the assessee has been made less than the real actuarial valuation - Held that:- We find that the assessee followed the IRDA Recommendations and accordingly prepared the actuarial valuation report including the surplus or deficit. The Rule 2 prescribes only actual valuation in accordance with Insurance Act 1938. Looking at the issue, we noticed that the computation made by the assessee is in accordance with Rule 2 of the Insurance Act 1938, according to which only AO can base his computation. The Revenue has not contested that the working of actuarial surplus / deficit is not in accordance with Rule 2 of 1st Schedule. Accordingly we are of the view that the CIT(A) has rightly deleted the addition and we confirmed the same. This issue of Revenue‟s appeal is dismissed. Disallowance towards claim of assessee in non-participating linked pension business segment - claim for deficit from Pension business - Held that:- The object of inserting section 10(23AAB) as per the Board Circular No. 762, dated 18/02/1998 was to enable the assessee to offer attractive terms to the contributors. Thus, the object of inserting section 10(23AAB) was not with a view to treat the pension fund like jeevan Suraksha Fund outside the purview of insurance business but to promote insurance business by exempting the income from such fund. Therefore, even after insertion of section 10(23AAB), the loss incurred from the insurance business under section 44 of the Income-tax Act, 1961 cannot be faulted. See CIT Vs. LIC Of India [2011 (8) TMI 47 - BOMBAY HIGH COURT]
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