During the assessment proceedings, the AO made enhancement to the taxable income by treating the amount declared and allocated as bonus for policyholders as part of the actuarial surplus being liable to tax u/s. 44 read with rule 2 of the First Schedule of the Act. On appeal Tribunal held that the assessee, declared bonus for policy holders, it became a part of ascertained liability and same could not be treated as a part of actuarial surplus being liable to tax u/s. 44 r.w.rule 2 of First Schedule to Act. (AY. 2010 – 2011)