Law: Income Tax Act, 1961

Section: 30,43

Income-tax-----Insurance business---Business expenditure---Amount paid as compensation by Life Insurance Corporation to its chief agents and special agents during inter ¬valuation period ending on 31-3-1967 under S.36 of Indian Life Insurance Corporation Act, 1956 is deductible under provisions of Ss.30 to 43 of Indian Income-tax Act---Refund of Income-tax received by Life Insurance Corporation during inter-valuation period ending on 31-3-1967 in respect of income-tax assessments of erstwhile insurers whose business had been taken over by Life Insurance Corporation is not deductible under R. 2(1)(b) of the First Schedule of the Indian Income-tax Act, 1961---Portion of surplus statutorily payable to the Central Government under S.28 of the Life Insurance Corporation Act is not deductible---Indian Income-tax Act, 1961, Ss. 30 to 43, 44; Sch. I, R. 2---Indian Life Insurance Corporation Act, 1956, Ss. 28 & 36. JUDGMENT 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; "(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…

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