IN INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH F MUMBAI BEFORE SHRI C.N. PRASAD (JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) ITA No. 6327/MUM/2018 Assessment Year 2014-15 Dy. CIT-9(3)(2), M/s Future Generali India Life Room No. 418, 4th floor, Insurance Company Ltd., 6th floor, Aayakar Bhavan, Vs. Tower-3, India Bulls Finance Churchgate, Mumbai. Centre, Senapati Bapat Marg, Elphinston Road, Mumbai-400013. PAN No. AABCF0190Q Appellant Respondent Revenue by Ms. Harkamal Sohi Sandhu, DR Assessee by Mr. Divyesh Fotaria, AR Date of Hearing 19/09/2019 Date of pronouncement 25/09/2019 ORDER PER N.K. PRADHAN, AM This is appeal filed by Revenue. relevant assessment year is 2014-15. appeal is directed against order of Commissioner of Income Tax-16, Mumbai [in short CIT(A) ] and arises out of assessment completed u/s 143(3) of Income Tax Act 1961, (the Act ). 2. grounds of appeal filed by revenue read as under : 1. Whether on factsand in thecircumstances of case and in law, Ld. CIT(A) was justified in deleting addition made by assessing officer M/s Future Generali India 2 ITA No. 6327/Mum/2018 on account of Surplus disclosed in Form 1 of Actuarial Report ignoring provision of section 44 r.w.r. 2 of First Schedule of IT Act, 1961? 2. Whether on facts and in circumstances of case and in law, Ld. CIT(A) was justified in deleting addition made by assessing officer on account of loss from Jeevan Suraksha Fund ignoring settled position of law that income includes loss and that income from Jeevan Suraksha Fund does not form part of total income of assessee corporation u/s. 10(23AAB) of IT. Act, 1961? 3. Whether onthe facts and in circumstances of case, Ld. CIT(A) was justified in ignoring fact that non-obstante clause in section 44 is not extended to section 10(23 AAB) of I.T. Act. 3. Briefly stated, facts of case are that nature of business of assessee is Life insurance. It filed its return of income for assessment year (AY) 2014-15 on 28.11.2014 declaring loss at Rs.38,75,32,336/-. assessment u/s 143(3) was completed by Assessing Officer (AO) on 16.12.2016 making addition of Rs.16,34,97,630/- (actulial surplus as per Form-I on Par Product) and Rs.37,16,309/- (surplus/deficit from pension fund). 4. Aggrieved by order of AO, assessee filed appeal before CIT(A). We find that CIT(A) followed his order in case of assessee for AY 2013-14 and allowed appeal. 5. Before us, Ld. Departmental Representative (DR) supports order passed by AO. On other hand, Ld. counsel for assessee submits that above issues are already decided by Tribunal in assessee s own case for AY 2011-12 and 2013-14 and same may be followed. M/s Future Generali India 3 ITA No. 6327/Mum/2018 6. We have heard rival submissions and perused relevant materials on record. We find that similar issue arose before Tribunal in assessee s own case in earlier assessment years. ITAT F Bench, Mumbai in assessee s own case for AY 2011-12 in ITA No. 4373/Mum/2015 vide order dated 30.03.2017 held : 6. We have heard rival submissions and perused relevant material on record. We begin with 1st, 2nd & 3rd ground of appeal as they address common issue. We find that Hon'ble Bombay High Court in case of ICICI Prudential Insurance Co. Ltd. (supra) has held that where assessee was carrying on life insurance business and Tribunal following decision of Supreme Court, while determining assessee s income under section 44, had taken into consideration total surplus as arrived at by actuarial valuation and further held that income from shareholders account was also to be taxed as part of life insurance business, there was no substantial question of law arising for consideration . Reference was madeto decision in LIC of India vs. CIT (1964) 51 ITR 773, wherein Hon'ble Supreme Court has held that Assessing Officer has no power to modify account after actuarial valuation is done. issues in 1st, 2nd & 3rd ground of appeal in instant case are squarely covered by above judgement. Respectfully following same, we dismiss 1st, 2nd & 3rd ground of appeal filed by revenue. 6.1 Now we turn to 4th, 5th, 6th and 7th ground of appeal as they address common issue. In case of Life Insurance Corporation of India Ltd. (supra), assessee was engaged in life insurance business. In its return of income for A.Y. 2002-03, it computed actuarial valuation surplus by excluding provision for reserve on account of solvency margin amounting to Rs. 3,500 crores and loss in Jeevan Suraksha Fund. AO disallowed claim of assessee and passed assessment order by adding amount M/s Future Generali India 4 ITA No. 6327/Mum/2018 on account of provision for solvency margin and loss from Jeevan Suraksha Fund, inter alia, on ground that provision for solvency margin was not ascertained liability and that income from Jeevan Suraksha Fund being exempt u/s 10(23AAB), loss incurred from said fund could not be adjusted against taxable income. On appeal, Commissioner (Appeals) confirmed additions made by AO. On second appeal, Tribunal deleted said addition. revenue filed appeal against order of Tribunal before High Court. Hon'ble High Court held that (i) amount set apart by insurance company towards solvency margin as per direction given by IRDA is to be excluded while computing actuarial valuation surplus, and (ii) pension fund like Jeevan Suraksha Fund would continue to be governed by provisions of section 44 irrespective of fact that income from such fund is exempted, or not and, therefore, even after insertion of section 10(23AAB), loss incurred from pension fund like Jeevan Suraksha Fund has to be excluded while determining actuarial valuation surplus from insurance business u/s 44 of Act. We find that issues in above grounds of appeal are squarely covered by above judgement of Hon'ble Bombay High Court. We follow judgement and dismiss 4th, 5th, 6th and 7th ground of appeal filed by revenue. 6.1 Facts being identical, we uphold order of CIT(A). 7. In result, appeal filed by Revenue is dismissed. Order pronounced in open Court on 25/09/2019. Sd/- Sd/- (C.N. PRASAD) (N.K. PRADHAN) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai Dated 25/09/2019 M/s Future Generali India 5 ITA No. 6327/Mum/2018 Rahul Sharma, Sr. P.S. Copy of Order forwarded to 1. Appellant 2. Respondent. 3. CIT(A)- 4. CIT 5. DR, ITAT, Mumbai 6. Guard file. BY ORDER, (Sr. Private Secretary) ITAT, Mumbai Dy. CIT-9(3)(2), Mumbai v. Future Generali India Life Insurance Company Ltd