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2023 (8) TMI 276 - ITAT MUMBAICharacterization of receipts - correct head of income - Surrender proceeds of the ULIP - ‘income from other sources’ OR "Capital gain" - addition made on accretion in value of the policy received on surrender and disallowance of long term capital gain by not treating the unit linked market plus policy of LIC as ‘capital asset’ within the meaning of section 2(14) of the Act - HELD THAT:- It is relevant to consider clause (c) of section 2(14) of the Act which has defined capital asset and has included any unit linked insurance policy to which exemption under clause 10D of section 10 does not apply on account of applicability of the fourth and fifth proviso thereof. In the present case, in hand, the assessee has paid a premium more than the limit specified under the fourth proviso to section 10(10D) of the Act. This has been further emphasized by amendment to section 2(14)(c) of the Act vide Act No. 13 of 2021 which has specifically stated the investment in unit linked insurance policy as ‘capital asset’. From the above observation, we find merit in the submission of the assessee and we hereby hold that the above mentioned policy will come under the purview of ‘capital asset’ as per section 2(14) of the Act for which the A.O. is directed to tax the accretion on surrender of the said policy under the head ‘income from capital gains’ and not as ‘income from other sources’. Decided in favour of assessee.
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