Loss incurred from the insurance fund liable to be excluded in computing the actuarial valuation surplus in view of the fact that the income from that Fund is exempt u/s 10(23AAB)

CIT, Mumbai Vs Life Insurance Corporation Of India Ltd.- (Bombay High Court)- The object of inserting Section 10(23AAB) as per the Board Circular No. 762 dated 18th February 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, in the facts of the present case, the decision of the Income Tax Appellate Tribunal in holding that even after insertion of Section 10(23AAB), the loss incurred from the pension fund like Jeevan Suraksha Fund had to be excluded while determining the actuarial valuation surplus from the insurance business under Section 44 of the Income Tax Act, 1961 cannot be faulted. Accordingly, questions (c) and (d) are answered in the affirmative, that is, in favour of the assessee and against the Revenue.

Whether provision for solvency margin made as per the directions of IRDA constitutes un ascertained liability so as to include the same in the actuarial valuation surplus  – Revenue’s Appeal dismissed

CIT, Mumbai Vs Life Insurance Corporation of India Ltd

Bombay High Court

Income Tax Appeal No. 3693 of 2010, 3623 OF 2010,

Please become a Premium member. If you are already a Premium member, login here to access the full content.