During the assessment proceedings the AO made addition to by considering the amount appropriated as Funds for Future Appropriation (‘FFA’) as part of the actuarial surplus being liable to tax u/s. 44, read with rule 2 of the First Schedule of the Act. Tribunal held that in case of insurance business, Funds for Future Appropriation (FFA) represents provision of definite and ascertained liability and therefore same cannot be considered as part of actuarial surplus being liable to tax u/s. 44, read with rule 2 of First Schedule of Act. (AY. 2010 – 2011)