Judgment

SARKAR, J. : (for himself and J. C. Shah J.) We think that these appeals should be allowed.

2. The appeals relate to the assessment to income-tax of the income of the life insurance business of the Bharat Insurance Co., Ltd. now merged in the Life Insurance Corporation Ltd. The assessment years concerned are 1952-53, 1953-54 and 1954-55. The Income-tax Act, 1922 makes special provision for assessment of the income of insurance business. The Income-tax Officer in making the assessment orders made some adjustments in the accounts which the appellant contends, he has no power to do under these provisions. The question in these appeals is whether he had the power to make these adjustments.

3. Sub-section (7) of S. 10 of the Act makes the special provision for the assessment of the income of insurance business and that is in these terms :

"Notwithstanding anything to the contrary contained in Ss. 8, 9, 10, 12 or 18, the profits and gains of any business of insurance and the tax payable thereon shall be computed in accordance with the rules contained in the Schedule to this Act."

Rule 2 in the Schedule lays down in cls. (a) and (b) two different methods for calculating the profits an