Life Insurance Business Profits Must Follow Insurance Act 1938 Valuation Rules for Tax Exemptions u/s 10(15).

ITAT admitted additional ground regarding exemption under s.10(15)(iv)(h) for interest income from PSU bonds/debentures, following NTPC precedent and Bombay HC ruling in Siva Equipment. Matter remanded to AO for verification of eligibility criteria. On s.80G deduction claim, following previous ITAT ruling for AY 2006-07, issue remanded to AO for fresh examination. Regarding computation u/r 2 of First Schedule (s.44), ITAT affirmed that life insurance business profits must be calculated as annual average surplus between inter-valuation periods per Insurance Act 1938 requirements. Revenue's appeal dismissed on all grounds, maintaining consistency with prior coordinate bench decisions. AO directed to verify factual aspects of exemption claims while adhering to statutory provisions. .....

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