Assessee is  engaged in business of life insurance, had filed its return of income declaring certain losses.  Loss was computed by aggregating its reporting under shareholders account and policy holders account as prescribed under Insurance regulatory and development authority (IRDA)  Assessing Officer held that income relating to policy holders was different from income of shareholders and both such income being derived from different sources could not be mixed up as life insurance to avail concessional rate. He accordingly completed assessment under section 143(3) and taxed surplus under shareholders account as income from business at normal rates.  On appeal Tribunal allowed the claim of the assessee. On appeal by Revenue High held that since assessee is engaged in only life insurance business and was not carrying on any other business, section 44 read with rule 2 of First Schedule was applicable and thus surplus with deficit as per shareholder’s account was to be aggregated with surplus with deficit in policyholder’s account for determining profit or loss of assessee under section 44 of the Act. (AY.  2011-12 to 2013-14)