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PETITIONER: THE COMMISSIONER OF EXCESS PROFITS TAX, WEST BENGAL
Vs.
RESPONDENT: THE RUBY GENERAL INSURANCE CO. LTD.
DATE OF JUDGMENT: 24/04/1957
BENCH: AIYYAR, T.L. VENKATARAMA BENCH: AIYYAR, T.L. VENKATARAMA BHAGWATI, NATWARLAL H. KAPUR, J.L.
CITATION: 1957 AIR 669 1957 SCR 1002
ACT: Excess Profits Tax--Insurance company--Premium receipts- Reserve for unexpired risks on pending Policies--Whether "accruing liability"--Whether could be deducted as a debt- Excess Profits Tax Act, 1940 (XV of 1940), ss. 4, 6, rr. 1, 2 of Sch. II--Indian Income--tax Act, 1922 (XI Of 1922), s. 1O(7), r. 6 of the Sch.
HEADNOTE: The respondent was a company carrying on life, fire, marine and general insurance business, and the question for determination related to the assessment of excess profits tax on its income other than life insurance. The method adopted by the company with respect to fire insurance policies was that while the premiums received were all of them included in the assets of the year, a portion thereof, 40 per cent., was treated as reserve for unexpired risks on the outstanding policies, and shown as a liability. The appellant, the Commissioner for Excess Profits Tax, claimed that the sum set apart as reserve for unexpired risks was liable to be deducted under r. 2 of Sch. II of the Excess Profits Tax Act, 1940, from out of the capital employe...