Law: Income Tax Act, 1922

Section: 2,2(6C)

[Income Tax Act, 1922 (XI of 1922)].........Section 2(6C)-Income-Profits and gains-Mutual Insurance Company--Registered with Controller of Insurance under the Insurance Act-Mutuality of interest between members proved»- Whether entitled to the benefits of mutual insurance company-Held yes-M embers dealing with themselves as a class-Profits and gains arising out of the dealings- Whether profit of the insurance company and exigible to tax-Held no-insurance Act, 1938 (IV of 1938). The effect of the status of a mutual insurance association is that as members deal with themselves as a class, the surplus is not a prom to the company but only meant to either deal with an unforeseen situation or an eventuality concerning themselves or to divide the same between them- selves at the time of winding up. Thus only such profits, as have been derived by the company from its dealings with outsiders and not from its members, can be termed as profits or gains and brought within the definition of Section 2(6C) of the Income Tax Act. The petitioner is registered as a mutual insurance company with the Controller of Insurance under that Act and admittedly there being mutuality of interest between its members, there is no option but to hold that the conditions of mutuality stand proved and that the petitioner is entitled to all the benefits of a mutual insurance company. Cases referred to: Thomas v. Richard Evan & Co. Ltd. 11 Tax Cas. 790 : Faulconbridge v. National Employers Mutual General Insurance Association Ltd. 33 Tax Cas 103 and Commissioner of Income Tax v. The Lyallpur Central Cooperative Bank Ltd. PLD 1959 Lah. 627. JUDGMENT GUL. MUHAMMAD KHAN, J-The assessee is carrying on insurance business as Mutual Insurance Company within the meaning of Section 95 (1) (a) of the Insurance Act, 1938. It submitted returns of its income with regard to the assessment years 1953-54, 1954-55 and 1955-56, which were duly completed by the income Tax Officer. After exahusting the remedy of appeals, three references Nos. 76, 77 and 78 of 1962/63 came up before this Court in which it was directed as follows ;- We have, therefore, no alternative but to send back the reference to the Tribunal…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492