RAMASAMI SURESH, KANCHIPURAM V. ITO NON CORPORATE WARD-22(4), CHENNAI

ITA 2795/CHNY/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 3698 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-02-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Assessment Year: 2016-2017
• Appeal Filed On: 30-09-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R. ANITHA
• Assessee Lawyers: G. SIVASUBRAMANIAN
• Keywords: Earning of tax free income; Set aside
• Section: 2; 10(10D); 201; 20

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH: CHENNAI , , BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ./ ITA NO. 2795 /CHNY/ 201 9 / ASSESSMENT YEAR: 201 6 - 1 7 SHRI . RAMASAMI SURESH NO.1701 - A, BRIDGEWOOD HIRANANDANI UPSCALE RAJIV GANDHI SALAI, OMR, EGATTUR, CHENGALPATTU, KANCH EE PURAM 603 103 [PAN: BBHPS 3747R ] VS. INCOME TAX OFFICER, NON CORPORATE WARD 22(4), 1 ST & 2 ND FLOOR, RAMAKRISHNA STREET, WEST TAMBARAM, CHENNAI 600 045. ( /APPELLANT) ( /RESPO NDENT) / APPELLANT BY : MR. G . SIVASUBRAMANIAN, C.A. /RESPONDENT BY : M S . R. ANITHA, JCIT / DATE OF HEARING : 24.02 .2020 / DATE OF PRONOUNCEMENT : 24.02 .20 20 / O R D E R PER GEORGE MATHAN, JUDICIAL MEMBER : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LEARNED COMMIS SIONER OF INCOME TAX (APPEALS) - 1 0 , CHENNAI I N ITA NO. 084/CIT(A) - 10/18 - 19 DATED 05.08. 2019 FOR THE ASSESSMENT YEAR 201 6 - 1 7. ITA NO. 2795 / C HNY / 201 9 : - 2 - : 2. MR. G. SIVA SUBRAMANIAN, CHARTERED ACCOUNTANT REPRESENTED ON BEHALF OF THE ASSESSEE AND MS. R. ANITHA, JCIT REPRE SENTED ON BEHALF OF THE R EVENUE . 3. IT WAS SUBMITTED BY THE LEARNED AUTHORIZED REPRESENTATIVE THAT THE ASSESSEE IS AN INDIVIDUAL WHO AS A NON - RESIDENT HAD DURING THE ASSESSMENT YEAR 2009 - 10 INVESTED AN AMOUNT OF RS.20.00 LAKHS AND FOR THE ASSESSMENT YEAR 2010 - 11 INVESTED AN AMOUNT OF RS.10.00 LAKHS AND FOR THE ASSESSMENT YEAR 2011 - 12 INVESTED AN AMOUNT OF RS.5.00 LAKHS TOTALING TO AN AMOUNT OF RS .35.00 LAKH S IN THE U NIT L INKED PENSION P LUS PLAN P OLICY WITH HDFC LIFE VIDE POLICY NO. 12229365. DURING THE ASSESSMENT YEAR 2016 - 17, THE ASSESSEE HAD RETURNED TO INDIA AND HAD CONSEQUENTLY ON ACCOUNT OF THE CANCELLATION OF THE SAID SCHEME BY INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY OF INDIA [IRDA] SURRENDERED THE SAID POLICY TO HDFC AND HAD CONSEQUENTLY RECEIVED BACK AN AMOUNT OF RS.67,88,760/ - . IT WAS A SUBMISSION THAT THE ASSESSEE HAD CLAIMED THE SAID AMOUNT AS EXEMPT U/S.10(1 0D) OF THE INCOME TAX ACT, 1961. IT WAS A SUBMISSION THAT THE ASSESSING OFFICER ON THE GROUND THAT THE SAID POLICY WAS A PENSION POLICY HELD THAT THE PROVISIONS OF SECTION 10(10D) DID NOT GIVE BENEFIT TO THE ASSESSEE AND ITA NO. 2795 / C HNY / 201 9 : - 3 - : CONSEQUENTLY TREATED THE ENTIRE SURRENDER VALUE OF RS.67,88,760/ - AS INCOME FROM OTHER SOURCES AND BROUGHT THE SAME TO TAX. IT WAS A SUBMISSION THAT THE AMOUNT OF RS. 6 7,88 , 760/ - ADMITTEDLY INCLUDED THE AMOUNT OF RS.35.00 LAKHS WHICH HAS BEEN INITIALLY DEPOSITED BY THE ASSESSEE. IT WAS A SUBMISSION THAT CONSEQUENTLY THE AMOUNT OF RS.35.00 LAKHS WAS NOT LIABLE TO BE TAXED. IT WAS A FURTHER SUBMISSION THAT THE LEARNED CIT(A) HAD HELD THAT IN VIEW OF THE PROVISIONS OF SECTION 80CCC ALSO THE SAME WAS NOT AVAILABLE TO THE ASSESSEE. IT WAS A SUBMISSION THAT THE SURRENDERED V ALUE HAD COME INTO THE HANDS OF THE ASSESSEE ONLY ON ACCOUNT OF THE CANCELLATION OF THE SCHEME INTRODUCED BY HDFC BY THE IRDA. IT WAS A SUBMISSION THAT THE ASSESSEE MAY BE GRANTED THE BENEFIT OF THE INITIAL CONTRIBUTION MADE BY THE ASSESSEE. 4. IN REPLY, THE LEARNED DEPARTMENTAL REPRESENTATIVE VEHEMENTLY SUPPORTED THE ORDER OF THE LEARNED ASSESSING OFFICER AND THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS). 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. ITA NO. 2795 / C HNY / 201 9 : - 4 - : 6. A PERUSAL OF THE FACT IN THE PRESENT CASE CLEARLY SHOWS THAT THE SURRENDER OF THE UNIT LINKED PENSION PLAN POLICY TAKEN BY THE ASSESSEE FROM HDFC WAS ONLY ON ACCOUNT OF THE CANCELLATION OF THE SAID SCHEME BY IRDA. IN FACT, THE ASSESSEE HAD FOR ALL PRACTICA L PURPOSES COMPLIED WITH ALL THE CONDITIONS REQUIRED UNDER THE SCHEME. ADMITTEDLY, AN EXEMPT INCOME OF THE ASSESSEE HAS BECOME TAXABLE ONLY ON ACCOUNT OF THE CANCELLATION OF THE SCHEME BY IRDA. ON CANCELLATION OF THE SCHEME AND ON THE SURRENDER OF THE SA ID POLICY, ADMITTEDLY, THE INCOME ARIS ING OUT OF THE SAID SCHEME IS TO BE TAXED. IT IS ALSO AN ADMITTED FACT THAT THE ASSESSEE HAD NOT CLAIMED DEDUCTION IN RESPECT OF THE AMOUNT OF RS.35.00 LAKHS WHICH HAS BEEN PAID BY THE ASSESSEE FOR THE PURPOSE OF ENTE RING INTO THE SCHEME. CONSEQUENTLY, IT IS ONLY THE PROFITS THAT HAS BEEN GENERATED ON THE SURRENDER OF THE SCHEME WHICH WOULD BE TAXABLE. IN THE CIRCUMSTANCES, THE ASSESSMENT ORDER IS SET ASIDE AND THE ASSESSING OFFICER IS DIRECTED TO VERIFY THE ACTU AL QUANTUM OF INVESTMENT AND TO GRANT THE ASSESSEE THE BENEFIT OF THE DEDUCTION OF THE ACTUAL QUANTUM OF INVESTMENT REPRESENTING THE AMOUNT INITIALLY DEPOSITED BY THE ASSESSEE IN THE SAID SCHEME WHICH HAS BEE N ITA NO. 2795 / C HNY / 201 9 : - 5 - : SURRENDERED BY THE ASSESSEE AND ONLY THE BALAN CE IS TO BE BROUGHT TO TAX. 7 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 24 TH FEBRUARY , 20 20 IN CHENNAI. SD/ - ( ) (INTURI RAMA RAO) / ACCOUNTANT MEMBER / CHENNAI, / DATED: 24 TH FEBRUARY , 2 020 IA, SR. PS SD/ - ( ) (GEORGE M ATHAN) /JUDICIAL MEMBER / COPY TO: 1. / APPELLANT 2. / RESPONDENT 3. ( ) / CIT(A) 4. / CIT 5. / DR 6. / GF