9911796707
TMI Blog2019 (12) TMI 39X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment Year 2012- 2. The Petitioner is a company engaged in business of Life Insurance. The Petitioner filed return of income on 21 September 2012 for Assessment Year 2012-13 declaring total income of Rs. 12,25,29,85,630/- in accordance with Section 44 of the Income Tax Act, 1961. On 8 August 2013 the Assessing Officer issued notice under Section 143(2) of the Act to the Petitioner to file documents and evidence. The Petitioner submitted documents as called for. Further notice was issued under Section 142(1) of the Act by the Assessing Officer on 13 November 2015. On 7 December 2015 Transfer Pricing Officer passed an order accepting the Arm's Length price reported by the Petitioner. Therefore, on 8 March 2016 an assessment order was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A.Y. 2012-13 on 21/09/2012 declaring total income of Rs. 1225,29,85,630/-. The return was processed under section 143(1) of the Income-tax Act, 1961, accepting the returned income. Subsequently, the case was selected for scrutiny and assessment order u/s. 143(3) of the Act was passed on 08/03/2016. 02. As per provisions contained in Section 44 of the Income Tax Act, the income of the life insurance business is computed in accordance with Rule 2 of the First Schedule. Prior to the enactment of the Insurance (Amendment) Act, 2002, a life insurance company was required to maintain a consolidated revenue account including surplus from both shareholder's and policyholders' accounts. The Insurance Act, 1938 was amended vide the Insurance (Ame ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uite opposite to the case of policyholder's account, where provision for tax comes before arriving surplus. 03. In the instant case, it is seen from the financial statement submitted by the assessee that the Revenue Account (Policyholders Account -Technical Account)(PHA) was prepared in Form Form A-RA and Profit and Loss Account (Shareholders account - Non Technical account) (SHA) in Form Form A-PL. The assessee has treated the entire profit generated from the business is profit from business of life insurance only. Further, the income of life insurance is accounted in Form A-RA i.e. Technical account or Revenue Account of policyholders and the actuarial report in the case of the assessee is prepared on the basis of assets in Pol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 2,84,89,000/-. Thus, the net income of the assessee in Shareholders Account was Rs. 283,30,05,000/- and required to be taxed as "Income from Other Sources" under normal provisions of the Act. 04. On verification of the record, it is seen that the case was selected for scrutiny for A.Y. 2012-13 and the order u/s.143(3) r.w.s.92CA(4) of the IT Act was passed on 08/03/2016 assessing total income of Rs. 1316,81,70,193/- as against the income returned at Rs. 1225,29,85,630/-. Since the income of the assessee company in shareholders account is different and distinct from the income of the Policyholders account, the same has to be taxed separately under normal provisions of the Act. This resulted in under assessment of income amounting to R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Policyholders account. The Assessing Officer thereafter refers to the financial statement submitted by the Petitioner and holds that the Shareholders' account being distinct and different will have to be taxed separately and therefore there is a short levy of tax of Rs. 60,13,05,018/-. 7. The Petitioner has drawn our attention to the reply to the notice dated 15 February 2015 issued to the Petitioner under Section 142(1) of the Act during the regular assessment proceedings. In this reply the Petitioner has submitted on taxability of Shareholders' profit and loss account as a part of life insurance. A detailed explanation therefore was given by the Petitioner as to how the Shareholders account also constitutes part of life insurance busines ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
