9911796707
TMI Blog2023 (8) TMI 879X X X X Extracts X X X X X X X X Extracts X X X X ..... considered the issue from that perspective since the transactions are akin to mutual fund therefore, deserves same treatment. Merely, because life is insured by the transaction would not alter basic character of transaction. CBDT has issued a circular regarding exemption u/s 10(10D) which provides exemption qua the life insurance schemes. It is pertinent to note that a new provision has been inserted w.e.f. 01.04.2021 by Finance Act, 2021 i.e. Section 45(1B) [objective of inserting of this provision is stated to subject the matured/redeemed amount to tax which otherwise was exempt u/s 10(10D)] Hence, it can be construed the receipt fell under the head capital gains but not under income from other sources . We therefore, direct the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... giving rise to the present appeal are that the assessee filed its return of income declaring income at Rs.3,40,826/-. The return was processed at Centralized Processing Center ( CPC ) at an income of Rs.10,61,250/- by making disallowance/adjustment of Rs.7,20,424/-. 4. Aggrieved against this, the assessee preferred appeal before Ld.CIT(A), who after considering the submissions, dismissed the appeal and sustained the addition. 5. Aggrieved against the order of Ld.CIT(A), the assessee is in appeal before this Tribunal. 6. Ld. Counsel for the assessee submitted that the authorities below failed to appreciate the fact that the assessee has not claimed exemption u/s 10(10D) of the Act which is available for the life insurance. However, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... available on the record. The appellant filed its return of income for the assessment year under consideration and same was processed at CPC by disallowing the entire gross amount of redemption of insurance policies as income from other sources and taxed accordingly. The appellant contention that the CPC has wrongly taken the gross redemption of Rs.7,20,424/- from insurance policies and taxed the same under head income from other sources whereas the same should have been taxed under head 'Capital Gain' after allowing the credit of indexation of cost of acquisition. The appellant has submitted the calculation chart of capital gain on the redemption amount of life insurance policies. 5.1.2. The submission of the appellant has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sued on or after 1st April 2012 The premium payable, exceeds 10% of the actual capital sum assured, for any of the years (during the term of the policy). 5.1.3. In the case of the appellant, the insurance policy issued on or after 1st April 2003 but on or before 31st March 2012 and the premium payable, exceeds 20% of the actual capital sum assured, for any of the years (during the term of the policy, the whole maturity amount is taxable under the head income from other sources. 5.1.4 In view of the facts and circumstances of the case, I hold that CPC has rightly taxed the gross redemption from insurance policies under income from other sources. Therefore, the order passed by the CPC is hereby confirmed. 9. In our considered v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the income taxable shall be calculated in such manner as may be prescribed.] 9.1. Now, question arises that what would be the fate of ULIP redeemed prior to insertion of this provision. The objective of inserting of this provision is stated to subject the matured/redeemed amount to tax which otherwise was exempt u/s 10(10D) of the Act. Hence, it can be construed the receipt fell under the head capital gains but not under income from other sources . We therefore, direct the AO to allow indexation and tax the amount under the head capital gains . The grounds raised by the assessee are allowed. 10. In the result, the appeal of the assessee is allowed in the terms indicated herein above. Order pronounced in the open Court on 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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