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Tax Publishers
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)
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