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TMI Blog2023 (10) TMI 1227X X X X Extracts X X X X X X X X Extracts X X X X ..... ces is set aside. AO is directed to compute the amount of capital gains tax liability, if any, as per law. AO is also directed to grant the benefit of Section 54F to the Appellant after verifying the claim of the Appellant taking into consideration the Agreement for Sale, dated 09/12/2014 filed by the Appellant. - SHRI B.R. BASKARAN, ACCOUNTANT MEMBER AND SHRI RAHUL CHAUDHARY, JUDICIAL MEMBER For the Appellant : Shri Kishore Chaudhari For the Respondent : Shri Paresh Deshpande ORDER Per Bench: 1. This is a batch of three appeals pertaining to Assessment Years 2013-14, 2014-15 and 2016-17 preferred by the Appellant against the orders passed by the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [hereinafter referred to as the CIT(A) ] All the appeals involve identical issues the same were heard together and are being disposed by way of a common order. ITA No. 949/MUM/2023 (Assessment Year: 2013-14) 2. We would first take up appeal for the Assessment Year 2013-14 which has been preferred by the Appellant challenging the order, dated 09/02/2023, passed by the CIT(A) for the Assessment Year 2013-14, whereby the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before vesting Pension. Only surrender value is paid to him. No other benefits, such as annuity, accident benefits and pension benefits were paid during active period of policy issued by LIC Of India. 3. The LIC's Market Plus policies, which was surrendered are single premium pension policies, where no risk cover was opted. This scheme is similar to Debt Mutual Fund. 5. The CIT(A) was not convinced and therefore, vide order dated 09/02/2023, the CIT(A) dismissed the appeal. The CIT(A) declined to grant any relief as the CIT(A) was of the view that the Appellant had not furnished the complete policy document. The policy document did not specify the number of units. Further, the certificate issued by the LIC Branch Manager used the expression before vesting pension which showed that the Appellant had taken a pension policy. The policy purchased by the Appellant could at best be understood as market linked pension plan (and not investment in bonds or mutual fund units) which does not qualify as a capital asset as defined in Section 2(14) of the Act. The accretion in the value of the policy is, therefore, liable to tax as Income from Other Sources . Therefore, there w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sr. Branch Manager stating that the policy taken by the Appellant was similar to a Debt Mutual Fund. In our view, the CIT(A) failed to appreciate the fact that in the aforesaid letter it was stated that the LIC s Market Plus Policies, which was surrendered are single premium policies where no risk cover is opted and therefore, it is similar to Debt Mutual Fund. The letter was obtained by the Appellant on specific query raised by the CIT(A). The letter also gives reference to the fact that the Appellant had disclosed the fact that IT Notice was received by the Appellant and therefore, clarification was required. The Letter clarified that the policy was in the nature of a Debt Mutual Fund since the Appellant had not opted for risk cover. Further, during the operation of policy no other benefit in the form of annuity, accident benefit or pension benefit was paid to the Appellant. In our view, the inference drawn by the CIT(A) that the policy was a pension policy runs contrary to express statement made in the letter issued by Sr. Brach Manager, LIC. We note that the Assessing Officer/CIT(A) has not relied upon any policy term to support the conclusion that the policy taken by the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed insurance policy. In this type of policy, out of the premium paid during the year, a small portion of the investment goes towards providing the life cover to the person and the residual portion is invested in a fund which in turn invests in stocks or bonds. The value of investment grows or declines as per the type of the investment made by the fund. The investor also has a choice to choose between the equity based funds or the bond based funds. The investor also can regularly change his investment from one type of fund to another considering the overall scenario of the equity market. These kind of changes are called switch‟. At the time of the maturity, the investor is paid the amount equal to the value of the units of the date of maturity. It is observed from the statement of account of the policy which has been enclosed to the assessment order by the A.O. that the appellant initially opted for investment in protector fund and later on is switched certain part of maximiser fund. At the time of surrender i.e. on 21.08.2007, the full value of policy was Rs. 32,74,492.91 for which the cheque was issued to the appellant. The A.O. was not justified in treating the ent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re allowed, while Ground No. 6 is allowed for statistical purposes. Ground No. 2 raised by the Appellant is disposed off as being infructuous. ITA No. 950/MUM/2023 (Assessment Year: 2014-15) ITA No. 951/MUM/2023 (Assessment Year: 2016-17) 11. Both the sides agreed for the Assessment Years 2014-15 and 2016-17, in identical facts and circumstances addition of INR 29,75,489/- (in respect of surrender value of INR 67,75,489/- received on surrender of LIC Market Policy No. 883439720 purchased for INR 38,00,000/-) and INR 23,34,963/- (in respect of surrender value of INR 43,34,963/- received on surrender of LIC Market Policy No. 883065725 purchased for INR 20,00,000/-), respectively, were made by the Assessing Officer. The aforesaid additions were confirmed by the CIT(A) and in respective appeals preferred by the Appellant were dismissed. In appeals before us, both sides, adopted their arguments in respect of appeal for the Assessment Year 2013-14 and agreed that out finding/adjudication in appeal for the Assessment Year 2013-14 shall apply mutatis mutandis to appeal for the Assessment Year 2014-15 and 2016-17 also. 12. We note that the grounds raised in appeals for the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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