Section 44 of the Income Tax Act

Income-tax Act, 2025: s.55

Section 44 of the Income-tax Act, 1961 corresponds to section 55 (Insurance business) of the Income-tax Act, 2025.

Read section 55 of the 2025 Act

Correspondence checked against the ICAI tabular mapping of the two Acts and the BharatTax.co section commentary.

The decision most relied on for Section 44 is Metal Box Co. of India Ltd. v. Their Workmen (73 ITR 53), cited in 276 of the 223 judgments on BharatTax that turn on this section.

Leading authorities on Section 44

Metal Box Co. of India Ltd. v. Their Workmen
73 ITR 53 · 1969 · Supreme Court
276
citing judgments

A provision for gratuity liability, calculated on an actuarial basis and spread over a number of years, is an allowable business expense. Such a provision is considered a charge against profits rather than a reserve.

Shree Sajjan Mills Ltd. v. CIT
156 ITR 585 · 1985 · Supreme Court
119
citing judgments

A liability for gratuity, even if actuarially valued and claimed as ascertained, is deductible under Section 37 only for amounts actually paid, especially when no formal provision for the amount has been made.

LIC of India v. CIT
51 ITR 773 · 1964 · Supreme Court
64
citing judgments

The assessment of profits for an insurance business is exclusively governed by the specific rules prescribed in the First Schedule to the Income Tax Act and Section 44, thereby precluding the Assessing Officer from applying general computation provisions, such as sections 28 to 43B, disallowances under Section 14A, or making adjustments outside these specific statutory rules.

DCIT v. National Insurance Co.Ltd.
72 Taxmann.com 116 · 2016 · ITAT
53
citing judgments

A provision made for Unclaimed Prior Revenue (UPR) is not an item to be added back to book profit under Explanation 1 to section 115JB(2) of the Income Tax Act, 1961.

CIT v. Vinitec Corporation (P) Ltd.
278 ITR 337 · 2005 · High Court
51
citing judgments

A provision for warranty liability, even if quantified on an estimated basis, is considered a definite and certain business liability, qualifying for deduction under Section 37(1) of the Income-tax Act, and is not a contingent liability.

Sundaram Asset Management Co. Ltd. v. DCIT
145 ITD 17 · 2013 · ITAT
42
citing judgments

A UPS is an integral part of a computer and is eligible for depreciation at 60%.

24 ITR 506 (SO, ITO v. Murlidhar Bhagwan Das
54 Taxmann 499 · 1991 · Supreme Court
36
citing judgments
Insurance Co.Ltd. v. DCIT
102 Taxmann.com 292 · 2019 · High Court
33
citing judgments

Reinsurance premium payments made to non-resident reinsurers are deductible business expenses, and disallowance on this ground is unsustainable.

Life Insurance Corporation of India v. CIT
115 ITR 45 · 1978 · High Court
30
citing judgments

The assessment of profits for insurance companies is governed by specific rules within schedules, and the Assessing Officer (AO) cannot make adjustments if Section 44 has been invoked. Insurance businesses may be entitled to exemptions under Section 10(15) even when Section 44 applies, as Section 44 does not exclude such claims.

M/s.Bajaj Allianz General Insurance Co. Ltd. v. ACIT
38 DTR 282 · 2010 · Reported
26
citing judgments

Section 14A of the Income-tax Act is not applicable to insurance businesses governed by specific provisions of Section 44 and Schedule 1. Profit on sale of investments by insurance companies is not taxable, especially after the deletion of sub-rule (b) of Rule 5 of the First Schedule.

Judgments on Section 44

M/S Exide Life Insurance Company Limited, Bangalore vs. Assistant Commissioner of Income Tax Circle-2(1)(2), Bangalore

In the result, appeal by the assessee is partly allowed

ITA 839/BANG/2019[2013-14]Status: DisposedITAT Bangalore27 Jul 2021AY 2013-14

Bench: Shri N.V. Vasudevan & Shri Chandra Poojariassessment Year : 2013-14 M/S. Exide Life Insurance Company Ltd., Vs. The Assistant Commissioner Of No.3/1, Jp Technopark Millers Road, Income Tax, Bengaluru – 560 001. Circle – 2(1)(2), Pan : Aaaci 7940 L Bengaluru. Appellant Respondent Appellant By : Shri. Surya Narayana, Advocate Respondent By : Shri. Muzaffar Hussain, Cit(Dr)(Itat), Bengaluru Date Of Hearing : 26.07.2021 Date Of Pronouncement : 27.07.2021 O R D E R Per N.V. Vasudevanthis Is An Appeal By The Assessee Against The Order Dated 18.02.2019 Of Cit(A), Bengaluru-2, Bengaluru, Relating To Assessment Year 2013-14. 2. The First Issue That Requires Adjudication In This Appeal Is As To Whether The Cit(A) Was Justified In Upholding The Order Of The Ao In Determining The Alp Of The International Transaction Pertaining To Payment For Intra Group Services As Nil Against A Sum Of Rs.4,06,89,430/- Claimed By The Assessee To Have Been Paid To The Ae & Adding The Sum Of Rs.4,06,89,430/- As Income Of The Assessee Under Section 92 Of The Income Tax Act, 1961 (Act). Page 2 Of 13 3. The Facts With Regard To The Aforesaid Issue Are As Follows:

For Appellant: Shri. Surya Narayana, AdvocateFor Respondent: Shri. Muzaffar Hussain, CIT(DR)(ITAT), Bengaluru
Section 92

DCIT 1(1)(2), Mumbai vs. Hdfc Standarad Life Insurance Co. Ltd, Mumbai

Appeals stands dismissed

ITA 1917/MUM/2017[2012-13]Status: DisposedITAT Mumbai30 Apr 2021AY 2012-13

Bench: Hon‟Ble Shri Manoj Kumar Aggarwal, Am & Hon‟Ble Shri Ravish Sood, Jm (Hearing Through Video Conferencing Mode) 1. आयकर अपील सं./ Ita No.1917/Mum/2017 (धििाारण वर्ा / Assessment Year: 2012-13) & 2. आयकर अपील सं./ Ita No. 1918/Mum/2017 (यनधाारण वर्ा / Assessment Year: 2013-14) & 3. आयकर अपील सं./ Ita No.5639/Mum/2017 (यनधाारण वर्ा / Assessment Year: 2014-15) & 4. आयकर अपील सं./ Ita No.1191/Mum/2017 (यनधाारण वर्ा / Assessment Year: 2015-16) Dcit-1(1)(2) M/S. Hdfc Standard Life Insurance Co. Ltd. 12Th & 13Th Floor, Lodha Excelus बिाम/ 579, Aaykar Bhawan M.K. Road Mumbai 400 020. Appollo Mills Compound, Nm Joshi Marg Vs. Mahalaxmi, Mumbai 400 011. स्थायीलेखासं./जीआइआरसं./Pan/Gir No. Aaach- 8755-L (अपीलाथी/Appellant) (प्रत्यथी / Respondent) : & 5. Cross Objection No.228/Mum/2018 (Arising Out Of Ita No.1917/Mum/2017) (Assessment Year: 2012-13) & 6. Cross Objection No.227/Mum/2018 (Arising Out Of Ita No.1918/Mum/2017) (Assessment Year: 2013-14) & 7. Cross Objection No.33/Mum/2017 (Arising Out Of Ita No.5639/Mum/2017) (Assessment Year: 2014-15) & 8. Cross Objection No.33/Mum/2020 (Arising Out Of Ita No.1191/Mum/2019) (Assessment Year: 2015-16)

For Appellant: Shri Percy Pardiwala, Ld. Sr. CounselFor Respondent: Advocate Shri Charanjeev Chandrapal
Section 28Section 44

DCIT- CC - 1 (1), Mumbai vs. Edelweiss Tokio Life Insurance Ltd., Mumbai

The appeal stands dismissed

ITA 6270/MUM/2018[2012-13]Status: DisposedITAT Mumbai22 Oct 2020AY 2012-13

Bench: Hon’Ble Shri Mahavir Singh, Vp & Hon’Ble Shri Manoj Kumar Aggarwal, Am (Hearing Through Video Conferencing Mode) आयकरअपील िं./ I.T.A. No.6270/Mum/2018 (धििाारण वर्ा / Assessment Year:2012-13 ) Dcit–Central Circle-1(1) M/S. Edelweiss Tokio Life Insurance Ltd. 4Th Floor, Edelweiss House बिाम/ Room No.903, 9Th Floor Off Cst Road, Kalina Old Cgo (Annexe) Vs. Santacruz (East), Mumbai-400 098. M.K. Road, Mumbai-400 020. स्थायीलेखा िं./जीआइआर िं./Pan/Gir No. Aaace-2709-H (अपीलाथी/Appellant) (प्रत्यथी / Respondent) : Assessee By : Shri Jitendra Jain-Ld.Ar Revenue By : Shri Amit Pratap Singh -Ld. Dr ुनवाई की तारीख/ : 07/10/2020 Date Of Hearing घोषणा की तारीख / : 22/10/2020 Date Of Pronouncement आदेश / O R D E R Manoj Kumar Aggarwal () 1. Aforesaid Appeal By Revenue For Assessment Year [In Short Referred To As ‘Ay’] 2012-13 Contest The Order Of Ld. Commissioner Of Income- Tax (Appeals)-8, Mumbai, [In Short Referred To As ‘Cit(A)’], Appeal No. Cit(A)-8/It-217/2016-17 Dated 20/08/2018 On Following Grounds: - 1. "Whether On Facts & Circumstance Of The Case & In Law, The Ld. Cit(A), Is Correct In Allowing Exemptions U/S. 10(34) Of The Income Tax Act, 1961, Amounting To Rs.17,92,987/- On Account Of Dividend Income Which Was Denied By The Assessing Officer On The Basis The Fetters Prescribed In Section 44 Of The Income

For Appellant: Shri Jitendra Jain-Ld.ARFor Respondent: Shri Amit Pratap Singh -Ld. DR
Section 10(34)Section 143(3)Section 14ASection 44