Insurance sector - Allowability of expenditure for provision for unsettled claims and for Incurred but not reported (IBNR) claims

Facts:

Assessee a health insurer as per IRDA regulations had provided for amounts for unsettled claims and incurred but not reported claims as well. These were disallowed by the AO. On appeal CIT(A) annulled the disallowances. Aggrieved revenue went in higher appeal to ITAT -

Held against the revenue that provision for unsettled claims and IBNR claims are not contingent provisions but are definite ascertained/estimated liability which are allowable expenditures under section 37.

Applied:

Kerala Transport Co. v. ACIT, (1994) 50 TTJ 435 (Coch. ITAT) : 1994 TaxPub(DT) 0912 (Coch-Trib).

Deputy Commissioner of Income Tax v. National Insurance Co. Ltd. (2016) 72 taxmann.com 116 (Kol.-Trib.) : 2016 TaxPub(DT) 3551 (Kol-Trib)

Case: JCIT v. Religare Health Insurance Co. Ltd. 2023 TaxPub(DT) 2553 (Del-Trib)