The general insurance companytracts, are in law, fresh companytracts entered into at the time of each renewal.
Firstly, the life insurance policies are number companytracts of indemnity they are forms of investments.
With certificate granted by the High Court, these appeals have been preferred by the Commissioner of Income tax.
The order of the Income tax Appellate Tribunal summarises the reasons which persuaded the Departmental authorities to reject the claim of the Company.
The Tribunal states The business of life insurance possesses peculiar characteristics which do number exist in respect of other insurance businesses.
The High Court answered the question in the affirmative.
Appeals by special leave from the judgment and order dated May 3, 1963 of the Madras High Court in Tax Case No.
Other classes of insurance business are companytracts of in demnity.
Secondly, the companytract in the general insurance is generally annual while in the case of life business the risk companytinues until death.
CIVIL APPELLATE JURISDICTION Civil Appeals Nos.
196 of 1960.
The Tribunal referred the following question to the High Court of Madras under s. 66 1 of the Income tax Act Whether the unabsorbed losses incurred by the assessee in the earlier years in its life insurance business are available to be set off against its profits from general insurance business for the assessment years 1951 52 to 1954 55?
Till the assessment year 1950 51 the loss suffered in the life insurance section was allowed by the Revenue authorities to be carried forward and set off under s. 24 2 of the Indian Income tax Act, 1922, against profits from the general insurance section in the subsequent year.
729 732 of 1965.
Swaminathan and M. S. Narasimhan, for the respondent in all the appeals .
M. Hazarnavis, Gopal Singh and R. N. Sachthey, for the appellant in all the appeals .
The Appellate Assistant Commissioner and the Tribunal companyfirmed the view of the Incometax Officer.
In proceedings for assessment for the assessment year 1951 52 the Income tax Officer held that the life insurance business and the general insurance business carried on by the Company were ,distinct and separate and the loss carried forward from the previous year in respect of life insurance business companyld number be set off under s. 24 2 against the profit of the general insurance business.
Unlike general insurance company tracts, the life companytract, is made once and for all.
In each of the calendar years 1944 to 1948 relating to the assessment years 1945 46 to 1950 51, the Company suffered loss in the life insurance section, and made profit in the general insurance section.
The Judgment of the Court was delivered by Shah, J. The respondent, a public limited companypany, carried on in the relevant years of account business of insurance life and general.
