April 2022
On maturity of life insurance policy, where section 10(10D) does not apply, it is only net income which is chargeable to tax
By Jagdish T. Punjabi | Chartered Accountant
Devendra Jain | Advocate
1 Sandeep Modi vs. DCIT
[TS-184-ITAT-2022 (Kol.)]
A.Y.: 2017-18; Date of order: 4th March, 2022
Sections: 10(10D), 56
On maturity of life insurance policy, where section 10(10D) does not apply, it is only net income which is chargeable to tax
FACTS The assessee, an individual, took a single premium life insurance policy from SBI Life Insurance Co. Ltd., paying a premium of Rs. 10,00,000. The policy was to mature after three years. No deduction was claimed u/s 80C. During the previous year relevant to the assessment year under consideration, on the maturity of the policy, the assessee received a sum of Rs. 13,09,000 and included a sum of Rs. 3,09,000 in his total income under the head `Income from Other Sources’.
When the return of income was processed by CPC, a sum of Rs. 10,00,000 was added to the total income under the head Income from Other Sources. Aggrieved, the assessee preferred an application for rectification u/s 154 of the Act. The assessee’s application was rejected without giving any specific reason for rejection.
Aggrieved, the assessee preferred an appeal to CIT(A), who confirmed the action of the CPC in enhancing the total income by Rs. 10,00,000, which according to the assessee, was premium paid by the assessee to SBI Life Insurance Co. Ltd.
Aggrieved, the assessee preferred an appeal to the Tribunal.
HELDThe Tribunal noted that since SBI deducted 1% TDS on the
