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2022 (10) TMI 102 - AT - Income TaxDeduction u/s 80C - Premium paid towards that insurance policy - HELD THAT - As taking note of contention of the assessee in respect of premium paid to the insurance company cannot be brought to tax subject to the fact that assessee shall not avail deduction u/s 80C of the Act in respect of premium paid towards that insurance policy. Being so, we remit this issue to the file of AO to consider only net amount as discussed above to taxation provided assessee has not claimed deduction u/s 80C of the Act in respect of premium paid on life insurance policy or claimed any deduction u/s 10(10D) of the Act. With this observation, we remit this issue to the file of AO for fresh consideration after hearing to the assessee. Appeal filed by the assessee is partly allowed for statistical purposes.
Issues Involved:
1. General Ground challenging the order of CIT(A), NFAC. 2. Addition to Income from Other Sources based on Form 26AS. 3. Short grant of TDS credit. 4. Levy of consequential interest under sections 234B and 234C. Detailed Analysis: 1. General Ground: The appellant contended that the DCIT, CPC erred in passing the intimation under section 143(1) of the Income-tax Act, 1961, and that the CIT(A), NFAC erred in affirming the variations made by the DCIT, CPC in the intimation. The appellant argued that the order passed by the CIT(A), NFAC was bad in law and liable to be quashed. 2. Addition to Income from Other Sources based on Form 26AS: - The appellant argued against the addition of Rs. 9,66,006 to the income based on Form 26AS, stating that the amount reflected in Form 26AS is not income chargeable to tax. - The appellant claimed that the amount shown under section 194DA in Form 26AS includes maturity proceeds of LIC towards the principal component invested, which is not assessable as income. - The appellant detailed that the amount of Rs. 14,78,000 shown under section 194DA in Form 26AS includes Rs. 10,62,750 paid as insurance premium and the excess portion was Rs. 4,15,250. Therefore, only the net proceeds (after excluding the premium paid) should be taxable. - The CIT(A) confirmed the addition made by the DCIT, CPC, stating that the appellant was not eligible for exemption under section 10(10D) due to the premium exceeding 20% of the sum assured. - The Tribunal noted that the appellant's contention regarding the premium paid not being taxable was correct, provided the appellant did not claim any deduction under section 80C for the premium paid. The issue was remitted to the AO for fresh consideration, with the instruction to tax only the net amount after verifying that no deduction under section 80C was claimed. 3. Short Grant of TDS Credit: - The appellant contended that the DCIT, CPC erred in not granting credit for tax deducted at source of Rs. 84,056 as against Rs. 1,21,659 claimed in the return of income. - The CIT(A) did not adjudicate this specific ground raised by the appellant. - The Tribunal did not provide a specific ruling on this issue in the summarized judgment but remitted the case to the AO for fresh consideration, implicitly covering all grounds of appeal. 4. Levy of Consequential Interest under Sections 234B and 234C: - The appellant argued that the DCIT, CPC erred in levying consequential interest under sections 234B and 234C of the Act amounting to Rs. 87,090 and Rs. 16,979 respectively, and denied liability to pay the consequential interest. - The Tribunal's decision to remit the case to the AO for fresh consideration implicitly included a review of the consequential interest levied under sections 234B and 234C. Conclusion: The Tribunal partly allowed the appeal for statistical purposes, remitting the case to the AO for fresh consideration. The AO was instructed to tax only the net amount from the maturity proceeds of the life insurance policy after verifying that no deduction under section 80C was claimed by the appellant for the premiums paid. The Tribunal emphasized the need to ensure that the income computation aligns with the provisions of the Act and not solely based on Form 26AS.
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