INCOME TAX ACT, 1961

Section 44

Insurance business - Income from business - Allowability of investments written off -

Assessee engaged in general insurance business wrote off certain amount out of investments by charging the same to its Profit and Loss Account. AO disallowed deduction.Held: Since assessee had been carrying on General Insurance business , its assessment was required to be made in accordance with section 44 read with rule 5 of First Schedule to the Act. In said rule 5 it has been mentioned that certain expenditure or allowance or provision can be added back only if same is not admissible under sections 30 to 43B. Any sum written off out of investments could not be considered as either 'expense' or 'allowance' or 'provision' and because of the restrictions contained in section 44 read with rule 5, there could not be any disallowance of amount written off out of investments.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. :

INCOME TAX ACT, 1961

Section 44

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