Law: Income Tax Act, 1922

Section: 4(3)(xii),10(7),59,8,9,10,12,18,6

Income-tax Act, 1922 -Sections 4(3)(xii), 10(7) First Schedule Rule 2(b) -- Finance Act, 1962 -Fourth Schedule -Paragraph B(1a) of Part I -- Insurance company -Ascertainment of profits under Rule 2(b) -Income from property -Exemption under Sec. 4(3)(xii) in respect of newly constructed building -Whether permissible -Held yes -- Insurance company -Profits included dividend income from company having registered office in Pakistan -Dividend income, whether exempt form Income-tax -Held yes -- Company doing life insurance business -Profits although computed artificially yet several items constituting notional income do not lose their individuality -Identity of income from property remains as such and referable to that source -Rentals from newly constructed house property -Benefit of exemption allowable -- Company doing insurance business -Profits representing dividends from companies having registered offices in Pakistan -Not leviable to income-tax -- Amount representing surplus available to shareholders -Actuary recommendation received late and amount as such not incorporated in accounts -Subsequent adjustments allowed to be made -- Corresponding Sections: Income-tax Ordinance, 1979 -Section 26(a) -- ORDER {The order was passed by HAMIDULLAH, Judicial Member and M. T. SIDDIQUI, Accountant Member, separately}. {M.T. SIDDIQUI, Accountant Member}.---These are three direct appeals pertaining to the assessment years 1960-61, 1961-62 and 1962-63. 2. The common objection raised in all the three appeals relates to the non-allowance of exemption to income from newly constructed property claimed as exempted under Section 4(3)(xii). The only other objections raised pertain to the assessment year 1962-63 and relate to the levy of income-tax in respect of dividends income included in life business profits and the add-back of Rs. 1,54,638 for bonus payable to the shareholders' account. Since the facts of the case as also the main objections raissed are identical in all three appeals, I propose to dispose of the appeals by one consolidated order. 3. The appellant is a public limited company which carries on life insurance business as well as general insurance business. It also…

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