DCIT, New Delhi V. Sh. Sajan Nanda, New Delhi

ITA 375/DEL/2009

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 1126 (ITAT-DELHI)
• Duration Of Justice: 9 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2009
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2005-2006
• Appeal Filed On: 30-01-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: H K LAL
• Assessee Lawyers: R M MEHTA
• Keywords: Business income; Additional evidence
• Section: 56(2); 37(1); 56; 10; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : F : NEW DELHI BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO. 375/DEL/2009 ASSESSMENT YEAR : 2005-06 DY. COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-3, E-2, ARA CENTRE, E-2, JHANDEWALAN EXTN., NEW DELHI. VS. SHRI RAJAN NANDA, 2, FRIENDS COLONY (WEST), NEW DELHI. PAN: AAEPN3548A (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI R.M. MEHTA, ADVOCATE REVENUE BY : SHRI H.K. LAL, DR O R D E R PER I.P. BANSAL, JUDICIAL MEMBER: THIS IS AN APPEAL FILED BY THE REVENUE. IT IS DIR ECTED AGAINST THE ORDER OF THE CIT (A) DATED 19 TH NOVEMBER, 2008 FOR ASSESSMENT YEAR 2005-06. GROUN DS OF APPEAL READ AS UNDER:- I. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LD. CIT (A) ERRED IN HOLDING THAT THE ASSESSEE IS NOT A N EMPLOYEE DIRECTOR OF THE ASSESSEE COMPANY. II. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE THE LD. CIT (A) ERRED IN DIRECTING THE A.O. TO TAX THE ENTI RE MATURITY VALUE OF KEYMAN POLICIES ALONG WITH OTHER INCENTIVE S AMOUNTING TO RS.8,55,00,000/- UNDER SECTION 56(2) R EAD WITH SECTION 2 (24) (XI) OF THE IT ACT, INSTEAD OF SECTI ON 17(3)(II) OF THE IT ACT. III. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT (A) ERRED IN DIRECTING THAT THE A.O. SHOULD ALL OW THE ITA NO.375/DEL/2009 2 PAYMENTS MADE BY THE ASSESSEE TO EHIRC TOWARDS ASSIGNMENT OF THE KEYMAN POLICY AND SUBSEQUENT PREM IUM PAID TO THE LIC TO CONTINUE TO THE SAID POLICIES. IV. WITHOUT PREJUDICE TO THE ABOVE, ON THE FACTS A ND CIRCUMSTANCES OF THE CASE, THE LD. CIT (A) ERRED IN DIRECTING THAT A.O. SHOULD ALLOW THE PAYMENTS MADE BY THE ASS ESSEE TO EHIRC TOWARDS ASSIGNMENT OF THE KEYMAN POLICIES AN D SUBSEQUENT PREMIUM PAID TO THE LIC TO CONTINUE TO T HE SAID POLICIES WITHOUT RESTRICTING SUCH DEDUCTIONS FOR TH E PERIOD RELEVANT TO THE PREVIOUS YEAR ONLY. 2. AT THE OUTSET, IT WAS POINTED OUT THAT A SUM OF RS.1,37,84,124/- WAS ADDED BY THE ASSESSING OFFICER TO THE RETURNED INCOME OF THE ASSESSEE ON ACCOUNT OF AMOUNT RECEIVED FROM LIC ON MATURITY OF KEYMAN INS URANCE POLICY. AGAINST THAT ADDITION THE ASSESSEE HAD COME IN APPEAL BEFORE THE CIT (A). THE CIT (A) ENHANCED THE ADDITION TO RS.8,55,00,000/- BEING F ULL VALUE OF MATURITY AMOUNT OF INSURANCE POLICIES AND DIRECTION WAS GIVEN TO ALLOW THE PAYMENTS MADE BY THE ASSESSEE TO EHIRC TOWARDS ASSIGNMENT OF THESE POLIC IES AND SUBSEQUENT PREMIUMS PAID TO LIC TO CONTINUE THESE TWO POLICIES . AGAINST THE SAID ORDER OF THE CIT (A) , THE DEPARTMENT AND THE ASSESSEE BOTH HAD FILED AN APPEAL. THE APPEAL FILED BY THE ASSESSEE FOR THE IMPUGNED YEAR WAS DECIDED BY THIS TRIBUNAL VIDE ITS ORDER DATED 31 ST MARCH, 2009. THE FOLLOWING GROUNDS WERE TAKEN BY THE ASSESSEE BEFORE THE TRIBUNAL:- 1) THE CIT(A) ERRED IN UPHOLDING THE ACTION OF THE A.O. IN SUBJECTING TO TAX THE ENTIRE MATURITY VALUE ON CERTAIN LIFE INSURANCE POLICIES WITHOUT FOLLOWING THE ORDERS OF THE HONBLE TRIBUNAL FOR ASSESSMENT Y EARS 2003-04 AND 2004-05 WHEREBY THE AMOUNT WHICH WAS DIRECTED TO BE TAXED WAS THE SURRENDER VALUE OF SUCH POLICIES AT THE TIME OF THE IR ASSIGNMENT BY THE COMPANIES TO THE APPELLANT. 2) THE CIT(A) IN FACT COMMITTED JUDICIAL IMPROPRIET Y BY NOT FOLLOWING EARLIER ORDERS OF THE HONBLE TRIBUNAL ON IDENTICAL FACTS S EEKING TO SUPPORT HIS VIEW ON THE GROUND THAT THERE WAS A CHANGE IN FACT WHEREAS THERE WAS NO SUCH CHANGE. 3) THE CIT(A) AT THE MOST COULD HAVE SUBJECTED TO T AX THE SURRENDER VALUE OF THE TWO POLICIES AT THE TIME OF THEIR ASSIGNMENT BY THE COMPANIES TO THE APPELLANT ALTHOUGH THIS IS WITHOUT PREJUDICE TO THE ARGUMENT THAT EVEN SUCH SURRENDER VALUE WAS NOT TAXABLE SINCE THE POLICIES AFTER ASSIGNMENT ITA NO.375/DEL/2009 3 BECAME ORDINARY INSURANCE POLICIES AND NO PART OF T HE MATURITY AMOUNT INCLUDING THE SURRENDER VALUE WAS TAXABLE. 4) WITHOUT PREJUDICE TO THE EARLIER GROUNDS, THE CIT(A ) ERRED IN LAW IN ENHANCING THE ADDITION MADE BY THE A.O. WITHOUT PUT TING THE APPELLANT ON NOTICE ABOUT SUCH ENHANCEMENT. 3. IT WAS SUBMITTED THAT THE ISSUE OF ENHANCEMENT B Y CIT (A) WAS ALSO UNDER CONSIDERATION OF THE TRIBUNAL AS IT CAN BE SEEN FR OM THE GROUNDS OF APPEAL TAKEN BY THE ASSESSEE BEFORE ITAT. IT WAS SUBMITTED THAT CONSIDERING THE SUBMISSIONS OF BOTH THE PARTIES THE FINDINGS OF THE TRIBUNAL AR E AS UNDER:- 6. IT IS CRYSTAL CLEAR FROM THE ORDER OF THE CIT ( A) THAT A CLARIFICATION WAS ASKED BY HIM THROUGH A.O. FROM TH E LIC WITH REGARD TO THE CHANGE IN TERMS & CONDITIONS OF KEYMA N POLICY AFTER ASSIGNMENT TO THE KEYMAN. VIDE LETTER DATED 6.8.20 08 CHIEF MANAGER OF LIC CERTIFIED THAT AT THE TIME OF ASSIGN MENT OF KEYMAN INSURANCE POLICY THERE IS NO CHANGE IN THE BASIC FE ATURES OF ORIGINAL TERMS AND CONDITIONS AS SUCH ASSIGNMENT DOES NOT HA VE ANY EFFECT ON ORIGINAL SUM ASSURED, MATURITY VALUE, BONUS, ETC . ONLY DIFFERENCE BETWEEN THE NORMAL POLICY AND KEYMAN POL ICY IS DUE TO RESTRICTION ON ASSIGNMENT OF KEYMAN POLICY TO KEYMA N OF THE COMPANY ONLY AND THERE IS NO OTHER DIFFERENCE. ALO NG WITH THIS LETTER LIC HAS ALSO PROVIDED TERMS & CONDITIONS REG ARDING KEYMAN INSURANCE. THE LD. AR WAS ASKED TO FILE THE COPY OF SUCH TERMS & CONDITIONS REGARDING KEYMAN INSURANCE AS SUPPLIED B Y THE LIC, SINCE THE SAME WERE NOT PLACED IN THE PAPER BOOK. VIDE LETTER DATED 9.3.2009, LD. AR FURNISHED COPY OF TERMS * CO NDITIONS OF KEYMAN INSURANCE POLICY. WE FOUND THAT IN THIS LET TER LIC HAD CERTIFIED THAT THERE IS NO CHANGE IN THE TERMS & CO NDITIONS AT THE TIME OF ASSIGNMENT OF KEYMAN INSURANCE POLICY, WE F OUND THAT PAGE 72 OF THE KEYMAN POLICY PROVIDED TERMS AND CONDITIO NS WITH REGARD TO TAXATION ASPECT OF THE KEYMAN INSURANCE POLICY, WHICH READS AS UNDER:- TAXATION ASPECTS: PROVISIONS APPLICABLE TO THE COMPANY: 1) CORPORATE ENTITIES CAN CLAIM THE PREMIUM PAID UN DER KEYMAN INSURANCE AS BONA FIDE BUSINESS DEDUCTION U NDER SECTION 37(1) OF THE INCOME TAX ACT. 2) AS PER THE FINANCE ACT 1996 THE AMOUNT RECEIVED UNDER A KEYMAN INSURANCE POLICY WILL NOT BE EXEMPTE D FROM TAX AS PER SECTION 10 (10D) OF THE INCOME TAX ACT. THE PROCEEDS OF THE POLICY WILL BE TREATED AS INCOME U/ S 28(VI) OF THE ACT. ITA NO.375/DEL/2009 4 PROVISIONS APPLICABLE TO THE KEYMAN: 1) IN THE EVENT OF THE POLICY BEING ASSIGNED TO THE KEYMAN THE PROCEEDS OF THE POLICY INCLUDING BONUS W ILL BE TREATED AS PROFITS IN LIEU OF SALARY UNDER SECTIO N 17 (CLAUSE 3) OF THE INCOME TAX ACT. 2) IN THE EVENT OF A DIRECTOR BEING THE ASSIGNEE UN DER THE KEYMAN POLICY. IT WILL BE TREATED AS INCOME FROM OTHER SOURCES AND TAXED ACCORDINGLY (SECTION 56(2IV) OF THE INCOME TAX ACT, 1961. THE UNDERLYING PRINCIPLE IS THAT THE PREMIUM PAID I S ALLOWED AS A BUSINESS DEDUCTION AND THE AMOUNT RECEIVED SHO ULD BE TAXED AS BUSINESS INCOME. (EMPHASIS SUPPLIED BY US) FROM THE ORDER OF THE TRIBUNAL AS PLACED ON RECORD BY THE LD. AR FOR THE ASSESSMENT YEAR 2003-04, WE FOUND THAT THE CONCLUSION ARRIVED AT BY THE TRIBUNAL WAS BASED ON A LETTER OB TAINED BY THE ASSESSEE FROM LIC DATED 21.3.06 WITH REGARD TO THE CHANGE OF STATUS OF KEYMAN POLICY TO THE ORDINARY POLICY ON A SSIGNMENT OF SUCH POLICY TO THE KEYMAN. WE HAD GONE THROUGH THI S LETTER DATED 21.3.2006, AS RELIED ON BY THE TRIBUNAL, WHICH PROV IDES THAT AFTER ASSIGNMENT THE POLICY TAKEN BY THE ESCORTS LTD. AS KEYMAN POLICY IN THE NAME OF RAJAN NANDA AND WHICH WAS ASSIGNED T O SHRI RAJAN NANDA ON 25.8.1998 WILL BE TREATED AS ORDINAR Y INDIVIDUAL POLICY. ON THE BASIS OF THIS LETTER, THE TRIBUNAL CAME TO THE CONCLUSION THAT IN SO FAR AS AFTER ASSIGNMENT THE K EYMAN POLICY IS BEING TREATED AS ORDINARY INDIVIDUAL POLICY, THE AM OUNT RECEIVED ON MATURITY WILL NOT BE LIABLE TO TAX IN VIEW OF EXEMP TION ALLOWED U/S 10(10D)) OF THE ACT AND ONLY THE AMOUNT OF SURRENDE RED VALUE OF THE POLICY PAID BY THE KEYMAN TO EMPLOYER WAS BROUG HT TO TAX. DURING THE COURSE OF HEARING BEFORE US, LD. A.R. FI LED ANOTHER LETTER OF LIC DATED 6TH AUGUST 2008 AND REQUESTED FOR ACCEPTING THE SAME AS ADDITIONAL EVIDENCE, IN S O FAR AS THE SAME WAS NOT FILED BEFORE THE LOWER AUTHORITIES . THE THREE DIFFERENT LETTERS ISSUED BY THE LIC READ AS UNDER: 1 ST LETTER DATED 21 .3.2006 DIRECTLY ISSUED TO THE ASSESSEE: 21 ST MARCH 2006 SHRI RAJAN NANDA, 2, FRIENDS COLONY (W,), NEW DELHI 110 065 ITA NO.375/DEL/2009 5 SIR. RE: POLICY NO. 112426811 THE ABOVE POLICY WAS TAKEN BY ESCORTS LIMITED AS A KEY MAN POLICY IN THE NAME OF SHRI RAJAN NANDA ON 1.4.1997. IT WAS ASSIGNED TO SHRI RAJAN NANDA ON 25.8.1998. AFTER ASSIGNMENT THE ABOVE POLICY WILL B E TREATED AS ORDINARY INDIVIDUAL POLICY. YOURS FAITHFULLY, SD/ SR. BRANCH MANAGER., LIC BRANCH OFFICE NO. 11S, 4-14, KAILASH COLONY, NEW DELHI. 2 ND LETTER DATED 20.1 1.2006 DIRECTLY ISSUED TO THE A SSESSEE DATED: 23.11.2006 SHRI RAJAN NANDA, 2, F RIENDS COLONY (W), NEW DELHII /0065 SIR, RE: POLICY NO.112434488 & 112680817 FVG SHRI RAJAN NANDA THE ABOVE POLICIES WERE TAKEN BY M/S. ESCORTS HEART INSTITUTE & RESEARCH CENTER LTD. AS KEY MAN POLICIES TAKEN ON A SSIGNED TO SHRI RAJAN NANDA. AFTER ASSIGNING, THE ABOVE POLICI ES WILL BE TREATED AS ORDINARY INDIVIDUAL POLICY. YOURS FAITHFULLY, SD/- SR. BRANCH MANAGER ITA NO.375/DEL/2009 6 LIC BRANCH 11S, A-14, KAILASH COLONY, NEW DELHI. COPY OF LETTER DATED 6.8.2008 DIRECTLY ISSUED TO T HE DEPARTMENT AUGUST 6, 2008 THE ASSTT.COMMISSIONER INCOME TAX DEPARTMENT, CENTRAL CIRCLE 3, ROOM NO. 355. ARA CENTRE, JHANDEWALAN, NEW DELHI -55. SIR, RE:KEYMEN INSURANCE POLICY IN CASE OF SHRI RAJAN NA NDA FOR ASSESSMENT YEAR 2005-06 POLICY NOS.112688642 AND 112682470 WITH REFERENCE TO YOUR LETTER DT. 28.07.2008 ON THE ABOVE SUBJECT. WE HAVE TO STATE AS UNDER: AT THE TIME OF ASSIGNMENT OF KEYMAN INSURANCE POLI CY, THERE IS NO CHANGE IN BASIC FEATURE OF ORIGINAL TERMS AND CO NDITIONS, AS SUCH, ASSIGNMENT DOES NOT HAVE ANY EFFECT ON ORIGIN ALLY SUM ASSURED, MATURITY VALUE, BONUS, INCENTIVES ETC. THE RE IS NO ACCOUNTING AT THE TIME OF ASSESSMENT. THE DIFFEREN CE BETWEEN NORMAL POLICIES AND KEYMAN POLICIES IS DUE TO RESTR ICTION ON ASSIGNMENT OF KEYMAN POLICIES TO KEYMAN OF THE CO. ONLY. NO OTHER DIFFERENCE IS THERE. HOWEVER, WE ARE PROVIDIN G OUR TERMS & CONDITIONS REGARDING KEYMAN INSURANCE FOR DOING THE NEEDFUL . YOURS FAITHFULLY, SD! CHIEF MANAGER (EMPHASIS SUPPLIED BY US) 7. THERE IS A CLEAR CONTRADICTION IN THESE LETTERS ISSUED BY LIC, WITH REGARD TO STATUS OF KEYMAN POLICY AFTER ASSIGN MENT. THE LETTER ISSUED TO THE DEPARTMENT CLEARLY SPEAKS FOR NO CHAN GE IN BASIC ITA NO.375/DEL/2009 7 FEATURES OF ORIGINAL TERMS & CONDITIONS, WHEREAS, T HE LETTER ISSUED TO THE ASSESSEE STATE THAT AFTER ASSIGNMENT, THE KE YMAN POLICY WILL BE TREATED AS ORDINARY INDIVIDUAL POLICY. THE CONCL USION OF THE TRIBUNAL IN EARLIER YEARS WAS BASED ON THE LETTER S TATING THAT AFTER ASSIGNMENT KEYMAN POLICY WILL BE TREATED AS ORDINAR Y INDIVIDUAL POLICY AND BY RELYING ON WHICH THE TRIBUNAL HAS COM E TO THE CONCLUSION THAT EXISTING PROVISIONS CONTAINED U/S 1 0(10D)) WILL BE APPLICABLE MEANING THEREBY THE MATURITY VALUE ALONG WITH BONUS ETC, IS NOT LIABLE TO TAX, ONLY THE AMOU NT PAID BY THE ASSESSEE AT THE TIME OF ASSIGNMENT WHICH IS EQUAL T O THE SURRENDER VALUE OF THE POLICY IS TO BE TREATED AS A MOUNT RECEIVED ON MATURITY. WHEREAS, THE LETTER ISSUED BY THE LIC DIRECTLY TO THE DEPARTMENT CLEARLY STATES REGARDING NO CHANGE IN BA SIC TERMS & CONDITIONS OF KEYMNAN POLICY WHICH INTER ALIA PROVI DES FOR TAXABILITY OF MATURITY VALUE ALONG WITH BONUS ETC. IN THE YEAR IN WHICH ASSESSEE RECEIVES THE AMOUNT AND THE SAME HAVE BEEN REPRODUCED AT PARA 6 HEREINABOVE. WE ALSO FOUND THA T DURING THE COURSE OF APPELLATE PROCEEDINGS, THE CIT(A) FOUND THAT MATURITY VALUE DECLARED BY THE ASSESSEE AT RS. 1 .37 CRORES IS FACTUALLY INCORRECT AMOUNT IN SO FAR AS THE ASSESSEE HAS TAKE N LOAN AGAINST THESE POLICIES AND WHILE MAKING PAYMENT ON MATURITY THE INSURANCE COMPANY HAS DEDUCTED THE AMOUNT OF LOAN A ND INTEREST, THEREON. ACCORDINGLY, THE AMOUNT RECEIVED BY THE AS SESSEE DOES NOT REPRESENT THE CORRECT MATURITY VALUE OF THE POL ICY, WHICH SHOULD BE CONSIDERED FOR TAX PURPOSE, BUT THE NET AMOUNT P AID BY THE LIC AFTER DEDUCTION OF LOAN AND INTEREST THEREON. AS PE R THE DETAILS FURNISHED BY THE ASSESSEE BEFORE THE CIT(A), THE AS SESSEE HAS RECEIVED AMOUNT OF RS 4.98 CRORES AND RS 3.56 CRORE S TOWARDS TWO POLICIES AS AGAINST THE SAME, THE ASSESSEE HAS DISCLOSED RS.81.85 LACS AND RS.55.98 LACS RESPECTIVELY ON THESE TWO POLICIES. KEEPING IN VIEW THE CORRECT MATURITY VALU E, THE CIT(A) HAS ALSO ENHANCED THE ASSESSMENT AND THE ASSESSEE H AS ALLEGED THAT NO OPPORTUNITY WAS GIVEN BEFORE ANY ACTION TAK EN BY THE CIT(A) FOR ENHANCING THE SAME. AS THE NEW FACTS HAV E COME TO THE NOTICE OF CIT(A) DURING APPELLATE PROCEEDINGS W ITH REGARD TO THE TERMS AND CONDITIONS OF KEYMAN INSURANCE POLICY ON ASSIGNMENT, HE BROUGHT TO TAX THE AMOUNT OF MATURIT Y VALUE AS REDUCED BY THE AMOUNT OF SURRENDER VALUE AND SUBSEQ UENT PREMIUM PAID BY THE KEYMAN. 8. THE CRUX OF THE ISSUE REVOLVES AROUND TREATMENT OF STATUS OF KEYMAN POLICY ON ASSIGNMENT TO KEYMAN. THE EARLIER LETTER OF LIC DATED 21.3.3006 AS FURNISHED BY THE ASSESSEE BEFORE THE TRIBUNAL IN CASE OF ASSESSMENT YEAR 2003-04 STIPULATES REGAR DING CHANGE IN BASIC FEATURES OF KEYMAN POLICY ON ASSIGNMENT WH EREAS THE SUBSEQUENT LETTER ISSUED BY THE LIC DIRECTLY TO THE A.O. DATED 6.3.2008 PROVIDES THAT THERE IS NO CHANGE IN THE BA SIC FEATURES OF ITA NO.375/DEL/2009 8 KEYMAN POLICY ON ASSIGNMENT. TAXABILITY OF AMOUNT R ECEIVED BY THE ASSESSEE ON MATURITY OF POLICY, WHICH AS PER TH E TERMS & CONDITIONS AS PROVIDED IN THE POLICY ITSELF, ON ASS IGNMENT TO KEY PERSON, IS LIABLE TO TAX INCLUDING BONUS EITHER AS PROFIT IN LIEU OF SALARY U/S 17 (CLAUSE 3) OR AS INCOME FORM OTHER SOURCES U/S 56(2IV) OF THE INCOME TAX ACT, 1961. IT IS FURTHER PROVIDED THAT IN THE EVENT OF DIRECTOR BEING THE ASSIGNEE UNDER THE KEYMAN POLICY, IT WILL BE TREATED AS INCOME FROM OTHER SOURCES A ND TAXED ACCORDINGLY U/S 56 OF THE INCOME TAX ACT, 1961. IN VIEW OF THE CLEAR CONTRADICTION IN THE TWO LETTERS ISSUED BY TH E LIC, ONE HAND WRITTEN DIRECTLY TO THE ASSESSEE AND ONE TO THE DEP ARTMENT, IN THE INTEREST OF JUSTICE AND FAIR PLAY WE RESTORE THE AP PEAL TO THE FILE OF THE A.O. FOR GETTING CLARIFICATION FROM THE HIGHER AUTHORITIES OF LIC WITH REGARD TO CORRECT STATUS OF KEYMAN POLICY ON T HE OCCASION OF ASSIGNMENT AND CONSEQUENTIAL TREATMENT OF TAXABILIT Y IN THE HANDS OF ASSESSEE, AND TO DECIDE THE ISSUE AFRESH AS PER THE TERMS & CONDITIONS APPLICABLE TO KEYMAN INSURANCE POLICY ON ASSIGNMENT TO THE KEYMAN. AFTER GETTING THE CLEAR POSITION IF THE A.O. FOUND THAT AS PER CERTIFICATION ISSUED BY LIC, THE KEYMAN POLICY IS CONVERTED INTO ORDINARY POLICY, THEN TO FOLLOW THE OBSERVATION OF COORDINATE BENCH AS DISCUSSED HEREINABOVE. BEFORE PARTING WITH THE MATTER, WE MAY CLARIFY THAT AMOUNT OF LOANS AND INTEREST THEREON AS AVAILED BY. THE ASSESSEE ON THESE POLICI ES WILL NOT EFFECT THE MATURITY VALUE OF THE POLICY, WHICH IS L IABLE TO BE CONSIDERED ALONG WITH AMOUNT OF BONUS THEREON, WHIC H THE ASSESSEE IS ENTITLED TO GET. ACCORDINGLY ACTION OF THE ASSESSEE IN OFFERING THE NET AMOUNT RECEIVED FORM LIC AFTER DED UCTION OF LOAN AND INTEREST THEREON AS AVAILED BY THE ASSESSEE ON THESE POLICIES ARE NOT CORRECT. 9. IN THE RESULT, THE APPEAL IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. 10. THIS DECISION WAS PRONOUNCED IN THE OPEN COURT ON 31 ST MARCH 2009. 4. REFERRING TO THESE FINDINGS OF ITAT, IT WAS POIN TED OUT BY THE LD. AR THAT THE ENTIRE ISSUE HAS ALREADY BEEN RESTORED BY THE TRIBUNAL TO THE FILE OF ASSESSING OFFICER. THEREFORE, THE DEPARTMENTAL APP EAL MAY ALSO BE RESTORED BACK TO THE FILE OF ASSESSING OFFICER. 5. ON THE OTHER HAND, LD. DR RELIED ON THE ORDER OF THE CIT (A). ITA NO.375/DEL/2009 9 6. AFTER HEARING BOTH THE PARTIES, WE FIND THAT THE ENTIRE ORDER OF THE CIT (A) WAS CONSIDERED BY THE TRIBUNAL VIDE THE AFOREMENTIO NED ORDER DATED 31 ST MARCH, 2009 IN ITA NO.3793/DEL/2008 I.E., THE APPEAL FILED BY THE ASSESSEE AGAINST THE IMPUGNED ORDER OF THE CIT (A). IT CAN BE SEEN THAT THE ISSUE OF ENHANCEMENT WAS ALSO CONSIDERED BY THE TRIBUNAL AND FINALLY THE MATTER WAS RESTORED TO THE FILE OF ASSESSING OFFICER WITH DIRECTIONS, WHICH HAVE B EEN REPRODUCED IN EARLIER PART OF THIS ORDER. IT WAS FURTHER BROUGHT TO OUR NOTIC E THAT THE AFOREMENTIONED ORDER OF THE TRIBUNAL WAS FURTHER RECTIFIED VIDE ORDER DATED 30 TH SEPTEMBER, 2009 IN MA NO.288/DEL/2009 (IN ITA NO.3793/DEL/2008) FOR THE I MPUGNED YEAR IN WHICH CERTAIN MISTAKES HAVE BEEN RECTIFIED. RESPECTFULLY FOLLOWING THE AFOREMENTIONED ORDER, WE RESTORE THE DEPARTMENTAL APPEAL TO THE FI LE OF ASSESSING OFFICER WITH SIMILAR DIRECTIONS AS CONTAINED IN AFOREMENTIONED O RDER AND IN THE ORDER PASSED IN THE AFOREMENTIONED MISCELLANEOUS APPLICATION. 7. IN THE RESULT, FOR STATISTICAL PURPOSES THE APPE AL FILED BY THE DEPARTMENT IS TREATED TO BE ALLOWED. . 8. THE ORDER PRONOUNCED IN THE OPEN COURT ON 30.10. 2009. [A.K. GARODIA] [I.P. BANSAL] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED, 30.10.2009. DK COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT, DELHI BENCHES