TaxTMI 
TaxTMI 
2022 (8) TMI 1592
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....hich the order of assessment made u/s 143(3) by the Assessing officer needs to be set aside and thereafter Income tax computed needs to be Nullified, Penalty proceedings dropped and Refund issued as claimed in the Income Tax Return by the Assessee. 1. We would like to enclose the revised Income Tax Computation of the assessee for A.Y. 2016-17 as submitted during all Appellate proceedings by the Assessee, as the original Income Tax return filed, was based on incorrect understanding of the provisions of Section 10(10D), which were actually not applicable in the present case and incorrect professional Advice given to the assessee based on which his original income tax computations were prepared and ITR filed with the Department for the AY 16-17 and case represented by same Professional. 2. The Fact in issue is whether an insurance capital asset or not. An insurance policy that provides for a Market linked return of money is certainly similar to an investment in Capital Markets and is a capital asset. A policyholder has certain rights to receive some amounts under the policy on the happening of certain events or on certain specified dates. A life insurance policy can ....
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....ontrol of the appellant to file the appeal before ITAT, Jaipur Bench as counsel was suffering from Covid-19 for that he has filed a copy of the Covid report to that effect (APB page 5). 3. The ld. DR has not objection to the request of the assessee, accordingly the delay of 3 days in filing the appeal is condoned and the appeal is admitted to be heard on merits. 4. In the first round of appeal, the ITAT Jaipur Bench in IT(IT) A No. 08/JP/2019 in case of Angala Goyal vs. DCIT dated 27.11.2019 has restored the matter to the file of the assessing Officer by observing vide para 6 which reads as under:- "6. We have heard the rival contentions and perused the material available on record. Undisputed facts are that the assessee has purchased a single premium policy of SBI Life Unit Plus III Pension Plan. The said policy was purchased on 27.01.2010 for a term of 9 years and by way of one time premium, the assessee has paid a sum of Rs. 1.82 crores. The assessee has surrendered the policy on 11.01.2016 and received gross surrender value of Rs.2,95,58,154/- and the said amount was credited in the assessee's NRE account. In the return of income, the assessee has claimed the gro....
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....,58,154/-in respect of redemption of SBl Life Insurance policy, which was invested on 27.01.2010 for a sum of Rs. 1,82,00,000/- on a single premium mode. The appeal of the appellant was dismissed by the CIT(A)- 42, Delhi, vide his order dated 27.03.2019. The assessee appellant preferred second appeal before ITAT, Jaipur. The Hon'ble ITAT, Jaipur vide order in ITA No. 08/JP/2019 dated 27.11.2019 set aside the matter to the file of the AO to examine the matter afresh. The appellant was directed to provide the particulars of policy to the AO. The set aside assessment was finalized vide order dated 27.11.2020 u/s 143(3) r.w.s. 254 of the Act. The AO examined the policy document etc. and observed that it was insurance-cuminvestment policy. The AO concluded that a capital asset u/s 2(14) of the Act must be capable of being transferred u/s 2(47) of the Act and as the insurance policy could not be transferred in favor of anyone under the modes prescribed u/s 2(47), it was not a capital asset and the income derived from surrender/maturity of policy has to be assessed under income from other sources. Accordingly, retained the addition. Being aggrieved by the assessment, the appellant has....
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....In this way, life insurance doesn't conform to a traditional asset class. Unlike an investment in mutual funds, fixed deposits or Postal Scheme, the insurance premium is not a capital contribution. 7.8 During the appeal, vide notice dated 08.11.2021, the appellant was asked to inter-alia submit copy of application form and copy of all communication with SBI Life at the time of purchase and surrender of policy. The reply was submitted electronically on 17.11.2021. However, the appellant did not submit these details. The ITAT order was other details as may be required for disposal of matter (para 6). Thus, the appellant has failed to comply with the directions of the Hon'ble ITAT and did not submit important correspondence with the insurance company that was important for deciding the issue. The appeal deserves to be dismissed just on this count. 7.9 It is concluded that an insurance policy is not a capital asset because the premium paid is for coverage of risk. When one pays premium on a life insurance policy, he has a guarantee to receive the sum assured or the embedded value in the policy, in an eventuality of death. Moreover, it is in the nature of inter....
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....s. CED 158 ITR 238 (SC) * Elel Hotels & Investment Ltd. vs. UOI 178 ITR 140 (SC). * Mittal Gold Storage vs. CIT 159 ITR 18 (MP). 9. Per contra, the learned that DR defended the order of the learned CIT appeal but the facts of the policy document remained uncontroverted by ld. D.R. at the time of hearing before us. 10. We have heard both the sides, perused the material on record, tribunal order, impugned orders and the case law cited. Admittedly, the assessee had bought a market linked capital investment policy from SBI, as observed by the AO in compliance to the direction of the tribunal in the assessment order passed u/s 143(3)/ 254 of the act on examination of the policy document the insurgency policy was an insurance-cum-investment policy that the insurgency policy of the assessee was an insurance-cum-investment policy. The Ld. AR contended that the CIT appeal and the AO were presented with the investment unit linked insurance policy document to understand the policy features, during the course of hearing, but both of them have ignored the facts and taken adverse view based on presumption and conjectures. He argued that the investment on insurance policy ....
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....nt of Rs.3,00,000/- by cheque on 30.07.2003. Subsequently payment of another 15,00,000/- were also made by him during the next two years. The policy was encashed by him on 22.08.2007. Accordingly, the return of income for the present assessment year was filed by the appellant showing the surplus amount of Rs.14,74,492/- as amount received on maturity of policy in the capital account. The A.O. analysed the various aspects of the policy and held that the receipts from the policy would not be exempt in view of the limitations imposed by section 10(10D) and held that the receipts would not be exempt from tax. After careful perusal of all the facts, it is evident that the policy purchased by the appellant was a unit linked 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 r....