The life counter is "inclusive" of the current life. Since you get 3 lives, it will show 3 (some games will show 2, as in your "remaining" lives).
I was assuming the latter since that's how it's handled in Mappy. (It's also this way in the Famicom version which shows lives as a number.)
Also, slightly related: I don't believe I've seen a game that uses icons to indicate lives include your current life in the counter. I could be wrong, but all that I've seen use icons to show your remaining lives.