Law: Income Tax Act, 1922

Section: 10,6,8

Income-tax Act (XI of 1922)---First Sched., Rr. 6 & 8---Insurance company doing non-life business--- Profits and gains of any such company shall be taken to be the balance of the profits disclosed by the annual accounts furnished to the Controller of Insurance by the company---Accounts of such company can be rejected in their entirety only if they were found to be fraudulent. So far as the business of life insurance was concerned, the ordinary methods of computing profits and gains had been done away with by S. 10(7) w the Income-tax Act, 1922 and special rules for that purpose had been prescribed. The First Schedule referred to in subsection (7) of S. 10 of the Income-tax Act divided the insurance business for the purpose of computation of tax into life insurance business and non-life insurance business. Rule 6 dealt with the computation of profits and gains of business of insurance other than insurance and had 5 subsections; while Rule 8 dealt with computation of profits and gains of an insurance company in the absence of "more reliable data". The assessee in the present case was a non-resident limited company incorporated in Australia doing Marine, Fire and Accident insurance business in Pakistan i.e. business other than life insurance. From the very beginning the company was being assessed in Pakistan on the basis of Pakistan Revenue Account as submitted to the Controller of Insurance. It was only for the year under appeal that the Income-tax Officer discarded the assessment on the basis of Pakistan Revenue Account under Rule 6 to the First Schedule and made the assessment under Rule 8 as he was of the opinion that the correct profits in Pakistan had not been indicated in the data so far made available to him by the assessee company. It is true that under Rule 8 in the absence of "more reliable data" the rule of thumb given therein can be applied. But this is not so in non-life insurance companies because the rule applicable to non-life insurance companies is rule 6, which provides that the profits and gains of any non-life insurance business shall be taken to be the balance of the profits disclosed by the annual accounts furnished to the Controller of…

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