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TMI Blog2024 (9) TMI 1191X X X X Extracts X X X X X X X X Extracts X X X X ..... ect of the accretion of Rs. 16,39,726/- [ i.e. surrender value (51,23,726) - investment (34,84,000(] reference is required to be made to the provisions of section 10(10D) to determine whether this amount is exempt u/s 10(10D). For this limited purpose, the matter is restored to the file of AO to examine the eligibility of the proceeds from surrender of policy for exemption u/s 10(10D) of the Act. Appeal of the assessee is partly allowed. - Ms. Kavitha Rajagopal, Judicial Member And Smt. Renu Jauhri, Accountant Member For the Appellant : Shri Vijaykumar S. Biyani For the Respondent : Shri Anil Sant ORDER PER RENU JAUHRI [A.M.] :- This appeal is filed by the assessee against the order of the Learned Commissioner of Income-tax (Appeals), Mum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3,655 2. 906008411 31.12.2009 10,00,000 13.08.2014 1,345,820 3,45,820 3. 96008413 31.12.2009 9,84,000 13.08.2014 1,324,251 3,40,251 Total 34,84,000 51,23,726 16,39,726 4. The AO issued a show cause notice to the assessee, asking him to explain why the accretion of Rs. 16,39,726/- [i.e. surrender value investment value] should not be added to the income u/s 56 of the Act?. The assessee explained that since no deduction was claimed under chapter 6A in any of the earlier years in respect of these policies, no income shall be liable to tax in the year of the surrender in the provisions to section 80CCC of the Act. The AO, however, disagreed with the interpretation of the assessee and preceded tax the interest or the bonus of Rs. 16,39,726/- u/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that the Assessee has considered the expression referred to in sub-section (1) in respect of which a deduction has been allowed under sub section (1) as a pre-requisite condition, for an amount, in order to fall under the purview of income as provided in section 80CCC(2) whereas the said expression needs to be read in conjunction with the expression prior to it, i.e., Where any amount standing to the credit of the assessee in a fund . The provisions of the section may read into three parts: (a) Where any amount standing to the credit of the assessee (b) In a fund, referred to in sub-section (1) in respect of which a deduction has been allowed under sub section (1). (c) together with the interest or bonus accrued or credited to the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onus of Rs. 16,39,726/- (being the difference of total proceeds of Rs. 51,23,726/- and the investment of Rs. 34,84,000/-) is the amount of income determined under section 80CCC(2) of the Act and the same is liable to be added to total income of the assessee under section 56 under the head Income from other sources. 8. We have carefully considered the rival submissions as well as the judicial pronouncement on the issue. In order to decide the issue, it is relevant to go through the provisions of section 80CCC which are reproduced below: Deduction in respect of contribution to certain pension funds. 80CCC. (1) Where an assessee being an individual has in the previous year paid or deposited any amount out of his income chargeable to tax to eff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,- (a).... (b) a deduction with reference to such amount shall not be allowed under section 80C for any assessment year beginning on or after the 1st day of April, 2006.]] 9. On a plain reading of section 80CCC, it clear that 80CCC(2) is applicable only when the assessee is covered under sub section (1) i.e. where a deduction had been claimed and allowed under sub section (1). Admittedly, there has been no claim of deduction u/s 80CCC(1) of the Act by assessee and therefore 80CCC(2) is not applicable. However, in respect of the accretion of Rs. 16,39,726/- [ i.e. surrender value (51,23,726) - investment (34,84,000(] reference is required to be made to the provisions of section 10(10D) to determine whether this amount is exempt u/s 10(10D). ..... X X X X Extracts X X X X X X X X Extracts X X X X
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