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TMI Blog2022 (6) TMI 453X X X X Extracts X X X X X X X X Extracts X X X X ..... d Commissioner of Income Tax (Appeals) National Faceless Centre erred in law and on facts in confirming addition of Rs. 7,35,785/- made by Assessing Officer in respect of 1St INSTALLMENT RECEIVED FROM LIC FOR SINGLE PREMIUM POLICY U/S. 10(10D) OF THE ACT as against Rs. 61,103/- 2. The appellant reserves right to amend, to modify or to withdraw any ground of appeal." 3. The brief facts of the case are that the assessee is an individual senior citizen deriving "income from other sources" only. During the year under consideration, the assessee received 1st installment of Rs. 7,95,000/- from LIC in respect of one-time premium policy (single premium policy) after deduction of TDS of Rs. 7,950/- u/s 194DA of the Income Tax Act, 1961 (Act). The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eceived by the assessee less Rs. 59,215 being the sum already considered in the return of income by the assessee) as taxable income in the hands of the assessee. The Ld. CIT(A) confirmed the addition by observing as below: "2.3 I have perused the facts of the case, the assessment order and the submissions of the appellant. Ground No. 1 and 2 are interrelated and regarding disallowance of Rs, 7,35,785/- as receipts of Rs. 7,95,000/- of 1st instalment of insurance policy. In original return of income, entire income was offered to tax. After revision of return of income, deduction of Rs. 7,95,000/- was claimed on account of proportionate cost of one time premium paid. 2.3.1 Assessee claimed that CBDT Circular No. 7/2003, dated 05.09.2003 p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is chargeable to tax in the hands of the assessee. The Ld. Departmental Representative in response relied upon the observations of Ld. CIT(A) in the appeal order. 5. We have heard the rival contentions and perused the material on record. In our considered view, we are in agreement with the Ld. Counsel for the assessee that he would be entitled to be taxed on the maturity amount received in terms of CBDT Circular number 7/2003 dated 5-9-2003 on taxability of maturity of policies under section 10(10D) of the Act, as per which only net income is chargeable to tax in the hands of the assessee. Accordingly, in the interest of justice, we set aside the order passed by Ld. CIT(A) to the file of Ld. Assessing Officer for re-computing the taxable ..... X X X X Extracts X X X X X X X X Extracts X X X X
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