1991 PTD 273

LIFE INSURANCE CORPORATION OF INDIA Versus COMMISSIONER OF INCOME-TAX

Citation1991 PTD 273

CourtBombay High Court

Judge(s)S.P. Bharucha and T.D. Sugla

1. S.P. BHARUCHA, J.-- Three questions arise at the instance of the assessee in this reference under section 256(1) of the Income-tax Act, 1961. They read thus;

2. "(i) Whether, on the facts and in the circumstances of the case, the sum of Rs. 3,27,022, being the amount paid during the inter-valuation period ended March 31, 1967, towards compensation payable under section 36 of the Life Insurance Corporation Act, 1956, to chief agents and special agents was not expenditure deductible under the provisions of sections 30 to 43 of the Income-tax Act, 1961?

(ii) Whether, on the facts and in the circumstances of the case, the sum of Rs. 3,21,621, being the refund of Income-tax received by the Corporation during the inter-valuation period ended March 31, 1967, in respect of the Income-tax assessments up to the assessment year 1967-68 of the income from the life insurance business of the erstwhile insurers whose business has been taken over by the corporation should be allowed as a deduction while computing the income of the assessee under rule 2(1)(b) of the First Schedule to the Income-tax Act, 1961?

(iii) Whether, on the facts and in the circumstances of the case, the sum of Rs. 3,61,39,551, being the portion of the surplus statutorily payable to the Central Government under section 28 of the Life Insurance Corporation Act, 1956, and so paid is a permissible deduction from the surplus disclosed for the inter-valuation period ended March 31, 1967?"

3. The issues involved have been decided by this Court in the case of the assessee itself. Counsels are agreed that the first question must be answered in the negative and in favour of the assessee following the judgment reported in Life insurance Corporation of India v. CIT (1979) 119 ITR 900; that the second question must be decided in the negative and in favour of the Revenue having regard to the judgment reported in Life Insurance Corporation of India v. CIT (1978) 115 ITR 45; and that the third question must be answered in the negative and in favour of the Revenue having regard to the judgment reported in Life Insurance Corporation of India v. CIT (1979) 119 ITR 900.

4. The questions are so answered. No order as to costs.

5. Z.S./827/T Questions answered accordingly.