IN THE ITAT MUMBAI BENCH ‘F’
ICICI Prudential Insurance Co. Ltd.
versus
Assistant Commissioner of Income-tax
IT APPEAL NOS. 6059, 6854-6856, 7213 & 7765 to 7767 (MUM.) OF 2010
[ASSESSMENT YEARS 2005-06 TO 2008-09]
SEPTEMBER 14, 2012
ORDER
Per Bench
These appeals are by assessee for the assessment years 2005-06 to 2008-09 and cross appeals by revenue for the respective assessment years. These appeals are on common issues, even though amounts vary from year to year. Therefore, all the appeals were heard together and common order is passed.
2. We have heard the learned Counsel Shri S.E. Dastur and the learned CIT (DR) Shri Subachan Ram in detail and also perused the submissions made by the respective parties and reliance on various case law and paper books placed on record in respective years. Their arguments were incorporated wherever necessary. For the sake of convenience, the issues in assessment year 2005-06 are discussed elaborately.
ITA No.6854/Mum/2010 – AY 2005-06:
3. This is an assessee’s appeal in which assessee has raised the following grounds:
“1. The CIT (Appeals) has erred in not accepting the loss of Rs.150.45 crores returned by the appellant.
2. The CIT (Appeals) erred in holding that the surplus as reflected in Form-I is the taxable income of the appellant.
3. The CIT(Appeals) erred in upholding the taxable income for the year at Rs.98.96 crores by holding that the amount transferred from the shareholder’s account to account is not to be reduced from the surplus disclosed in Form-I. It is prayed that the surplus considered for computing taxable income should be after removing the effect of transfer from Shareholder’s account to account.
4. The CIT (Appeals) has erred in not accepting disallowance under section 14A offered in revised return of income is on reasonable basis but directed AO to decide the issue afresh”.
4. The facts in brief are that assessee is a Public Limited Company registered under the Companies Act, 1956. The Company was incorporated on July 20, 2000 with the object of carrying on Life Insurance Business. The activities of the insurance are governed by the Insurance Act, 1938, Insurance Regulatory and Development Authority (IRDA) Act, 1999 as amended from time to time, IRDA rules and Regulations from time to time made there under. The return of income for AY 2005-06 was filed on 27.10.2005 declaring a loss of Rs.150,46,83,807/-. The case was selected for scrutiny and AO while accepting that assessee is in the business of life insurance considered that income of assessee from insurance business is assessable as per section 44 of the Income Tax Act. He has considered the Actuarial Valuation Report submitted in Form-I extracted in the assessment order which is as under:
Form-I of the Actuarial Report:
