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| The Tax Publishers2020 TaxPub(DT) 3673 (Mum-Trib) INCOME TAX ACT, 1961
Section 10(10D)
Where assessee received amount on maturity of Keyman Insurance Policy after coming into effect of amended Explanation -- 1 to section 10(10D), he was not eligible to claim exemption under section 10(10D) because sum received under assigned Keyman Insurance Policy prior to assessment year 2014 -- 15, would be eligible for exemption under section 10(10D), as amendment in Explanation -- 1 would apply only from 1st April, 2014.
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Exemption under section 10(10D) - Applicability of provision - Sum received under assigned Keyman Insurance Policy after assessment year 2014 -- 15 -
Assessee was a partner in a firm (since dissolved). Firm took Keyman Insurance Policy on assessee. On maturity of same, assessee received amount towards maturity value of policy. In return of income filed for relevant assessment year, he offered long term capital gain on maturity value received from policy after availing indexation benefit on premium paid by treating it as cost of acquisition. AO held that amount received on maturity of Keyman Insurance Policy was taxable as income from other sources as provided under section 56(2)(iv) read with section 2(24)(xi). Assessee contended that amount received on maturity of insurance policy was not taxable as per section 10(10D). Held: As decided in Prashant J. Agarwal, any sum received under assigned Keyman Insurance Policy prior to assessment year 2014 -- 15, would be eligible for exemption under section 10(10D), as amendment in Explanation -- 1 would apply only from 1st April 2014. Aforesaid observations of High Court rather supported case of revenue as in instant case, Keyman Insurance Policy matured in November 2014. Assessee received amount on maturity of Keyman Insurance Policy after coming into effect of amended Explanation -- 1 to section 10(10D). Assessee was not eligible to claim exemption under section 10(10D) on maturity value of the Keyman Insurance Policy. Sum received on maturity of Keyman Insurance Policy cannot be assessed either under the head salary or income from business and profession. Thus, the only other head under which it could be assessed was 'Income from other sources' as per section 56(2)(iv).
Distinguished:CIT (Central) v. Vatika Township Pvt. Ltd. [2014] 49 taxmann.com 249 (SC) : 2014 TaxPub(DT) 3934 (SC) Followed:CIT v. Prashant J. Agarwal (2016) 243 taxman 119 : 2016 TaxPub(DT) 4771 (Bom-HC)
REFERRED : Brahm Datt v. ACIT & Ors. [W.P(C) No. 1109/2016, dated 6-12-2018 (Del. HC)] : 2018 TaxPub(DT) 7840 (Del-HC) DCIT v. Rajan Nanda [2013] 37 taxman.com 335 (Del.) (Trib.) : 2014 TaxPub(DT) 1270 (Del-Trib)
FAVOUR : Against the assessee
A.Y. : 2015-16
IN THE ITAT, MUMBAI BENCH
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