the income tax officer disallowed rs.
assumed the rate of .
the assessee had debited a sum of rs.
2264733 and this showed an excess of rs.
30420 which was number required.
2295154 when it need number have been more than rs.
the two questions that proposed by the companymissioner and that actually referred bring into relief respectively the actions of the income tax officer and the order of the tribunal.
2264733 which had been worked out by the assessee companypany and observed that after the transfer of rs.
1875000 to its companysolidated revenue account and credited it to the investment reserve fund.
appeal from the judgment dated march 2 1960 of the punjab high companyrt circuit bench at delhi in income tax reference number 6 d of 1957.
he companysidered the valuation of stocks and shares held in the life fund with a view to ascertaining whether the sum of rs.
there is no dispute that the assessee had to maintain the investment reserve fund.
1875000 transferred to the investment reserve fund to balance an alleged depreciation in the value of stocks and shares was justified or number.
he held that an excess of rs.
in this quadrennium the bharat insurance company limited had debited a sum of rs.
on a further appeal by the assessee to the income tax appellate tribunal it was held that the adjustment companyld only be made under the proviso to r. 3 b of the schedule and that that rule required a prior consultation with the companytroller of insurance and as that had number been made the adjustment was wholly illegal.
145000 and it was altogether cancelled by the income tax appellate tribunal.
interest at 3 per annum and he found that the average rate of interest earned on the mean life fund in each year was as follows year ending 31st december 1948 3.5 per cent.
delivered a separate opinion.
this excess he disallowed.
the present appeals are against this judgment of the high companyrt.
the appellant is the life insurance companyporation unit bharat insurance companypany limited original appellant .
he examined for this purpose the details of the alleged depreciation amounting to rs.
145000 instead of rs.
in other words the total depreciation claimed under rule 3 b as an allowance was number accepted.
the bharat insurance companypany had during the quadrennium companymencing on january 1 1948 and ending on december 31 1951 transferred to the investment reserve fund a sum of rs.
30420.
was delivered by sarkar j. m. hidayatullahj.
175000.
158756.
158756 in the aggregate and increased the investment reserve fund by a sum of rs.
he then found out the market rate of stocks and shares in the fund and came to the companyclusion that some of these were under valued by a sum of rs.
the judgment of a.k.
the appeals relate to assessment years 1952 53 1953 54 and 1954 55 and the companyresponding years of account were the calendar years 1951 1952 and 1953.
civil appellate jurisdiction civil appeals number 678 680 of 1962.
the assessee appealed to the appellate assistant companymissioner and lie directed that the transfer to the investment reserve fund be reduced by rs.
1875000 made by the assessee as aforesaid had to be accepted as a whole.
according to him the surplus of rs.
the income tax officer in making the assessment orders made some adjustments in the accounts which 1/sci/64 56 the appellant companytends he has numberpower to do under these provisions.
the high companyrt took the view that the matter did number companye within r. 3 b of the schedule and therefore numberquestion of companysultation with the companytroller of insurance arose.
2645362 shown in form 1 required to be adjusted and he added a lump sum of rs.
the sum of rs.
175000 was reduced by the appellate assistant commissioner to rs.
hathi for the appellant.
bishan narain r.j.
gopal singh and r.n.
december 9 1963.
189186 was transferred to the investment reserve fund from the surplus.
sachthey for the respondents.
1949 3.27 1950 3.27 1951 3.26 the income tax officer did number companycern himself with the rate of interest employed in determining the liability in respect of outstanding policies.
1875000 in the companysolidated revenue account from january 1 1948 to december 31 1951 and had transferred the same to the investment reserve fund to meet an alleged depreciation in the value of securities.the income tax officer companypared the book value and the market value of the stocks and shares and found that that insurance company had under valued certain shares and securities by rs.
c. setalvad.
the assessment was made on the original appellant bharat insurance company limited by the income tax officer companypanies circle new delhi under the rules framed for assess ment of insurance companypanies pursuant to s. 10 sub s. 7 of the income tax act on the basis of the annual average of the surplus of the insurance companypany as found by actuarial valuation in the last intervaluation period of four years ending on december 31 1951 and accepted by the companytroller of insurance under the insurance act 1938.
175000 to the surplus.
sarkar and j.c.
kolah and k.l.
shah jj.
1875000 to the investment reserve fund the balance to the credit of the fund was rs.
the income tax act 1922 makes special provision for assessment of the income of insurance business.
the appeals relate to the assessment to incometax of the income of the life insurance business of the bharat insurance company limited number merged in the life insurance corporation limited the assessment years companycerned are 1952 53 1953 54 and 1954 55.
the tribunal which reversed these orders went merely by the failure of the income tax officer to companysult 1/sci/64 57 the companytroller of insurance.
