9911796707
TMI Blog2024 (2) TMI 1194X X X X Extracts X X X X X X X X Extracts X X X X ..... (NFAC), Delhi has erred both in law and on facts in upholding an addition made of Rs. 1,43,08,000/- representing sums received representing maturity proceeds of life insurance policy by erroneously invoking the provision contained in section 28(vi) of the Act. 1.1. That the learned Commissioner of Income Tax while upholding the addition has failed to appreciate the facts and circumstances of the case of the appellant that sums received on surrender of life insurance policy was exempt u/s 10(10D) of the Act and therefore, neither the policy could be held as "Keyman Insurance Policy" and, nor the same could be brought to tax u/s 28(vi) of the Act. 1.2. That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relationship, only surrender value is taxable in the hands of employee and that too at time of assignment of policy and thus, it cannot validly be held that, entire sum received on surrender of life insurance policy is taxable as income u/s 28(vi) of the Act in the year under consideration. 2. That without prejudice and in the alternative at best the addition could be made under the capital gains and thus even otherwise addition made and sustained is not in accordance with law." 2. The only effective ground raised by the assessee is regarding taxability of the sums received on maturity of life insurance policy u/s 28(vi) of the Income Tax Act, 1961 ("the Act"). 3. Facts giving rise to the present appeal are that the assessee filed his r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y claimed the amount as exempt u/s 10(10D) of the Act as a character of policy had changed wayback in the year 2008. He further submitted that under the identical facts, the Co-ordinate Bench of this Tribunal in the case of Smt. Harleen Kaur Bhatia vs Pr.CIT, Indore [2020] 114 taxmann.com 183 (Indore-Trib.), decided the issue in favour of the assessee. He drew our attention to the decision of Tribunal in the case of Smt. Harleen Kaur Bhatia vs Pr.CIT (supra). He further placed reliance on the judgement of Hon'ble Delhi High Court in the case of CIT vs Rajan Nanda [2012] 18 taxmann.com 98 (Delhi). 7. To buttress the contention that once insurance policy is assigned by the employer to employee, the insurance policy get converted into an ordi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave gone through the written submission. It is to be mention that when show-cause notice was issued to the appellant by the Assessing Officer why Keyman Insurance Policy should not be taxed. The appellant has filed the revised computation of income and has shown Long Term Capital Loss of Rs. 16,30,328/-. The appellant has relied upon various case laws in the written submission. Section 28(vi) is very clear and hence the Assessing Officer has rightly made the addition. Since the legislative intent of the Act and the section 28(vi) is very clear and hence as per interpretation of the statutes, there is no question of any ambiguity and hence the addition of the Assessing Officer is confirmed and appeal of the appellant is dismissed." 10. We f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which is accepted by the insurance, the contract is now between the insurance company and the individual and not the company/employer which initially took the policy. Such company/employer no more remains the contracting parties. We have to bear in mind that law permits such an assignment even LIC accepted the assignment and the same is permissible. There is no prohibition as to the assignment or conversion under the Act. Once there is an assignment, it leads to conversion and the character of policy changes. The insurance company has itself clarified that on assignment, it does not remain a keyman policy and gets converted into an ordinary policy. In these circumstances, it is not open to the Revenue to still allege that the policy in que ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
