BIJAY KUMAR AGARWAL,KOLKATA vs. ITO, WARD 44(2), KOLKATA

That Ld. Assessing Officer has erred in treating the proceeds received from LIC under the income head "Income from Salary" and "Income from Other Sources". Same Income has been taxed twice. The same needs to be corrected and due relief be granted.

The interest u/s 234A, B and C should also be deleted which are in nature consequential effect of the wrong addition made on account of maturity proceeds of the insurance policies.

The Appellant craves leave to add, alter and submit further explanations and documents at the time of hearing of Appeal Petition."

Brief facts of the case are that the assessee had filed the return of income for AY 2017-18 originally on 04.12.2017 and revised the return of income on 07.07.2018 declaring total income at ₹50,07,740/-. The Centralized Processing Centre processed the return u/s 143(1) of the Act and computed the total income at ₹1,68,83,670/- after making an addition of ₹1,18,75,930/- towards LIC maturity proceeds of “Keyman Insurance Scheme” under the head of income from other sources, despite the assessee claiming that the proceeds had already been offered to tax under the head of income from salary. The Assessing Officer (hereinafter referred to as Ld. 'AO') subsequently passed a rectification order u/s 154 of the Act dated 30.01.2020, but made no changes to the aforementioned addition. Aggrieved with the rectification order, the assessee filed an appeal before the Ld. Addl/JCIT(A), who observed that the assessee did not furnish corroborative evidences along with the copy of Form No. 26AS to substantiate the claim, and noted that no regular income from salary had been shown. Accordingly, the Ld. Addl/JCIT(A) confirmed the action of the Ld. AO and dismissed the appeal of the assessee.

Aggrieved with the order of the Ld. Addl/JCIT(A), the assessee has filed the appeal before the Tribunal.

Rival contentions were heard and the submissions made have been examined. The Ld. AR requested that the issue may be remanded to the Ld. AO. for examination as the assessee had already included the maturity proceeds Keyman insurance policy under the head “Income from salary”

The Ld. DR relied upon the order of the Ld. Addl/JCIT(A) and requested that the same may be upheld.

We have considered the submissions made, gone through the facts of the case and perused the record and the order of the Ld. CIT(A). In the Statement of Facts filed with Form No. 36, the assessee has mentioned as under: “Assessee is the Director of Two company Esquire Finvest and Trading Private Limited and Shree Jhalaria Dealers Private Limited. Return of Income for the Assessment Year 2017-18 originally submitted on 04-12-2017. Due to mismatch notice, Return of Income revised on 07.07.2018 declaring an income of Rs. 50,07,740/-. During the relevant Assessment Year, the appellant received LIC maturity of two policies Rs. 39,17,322/- and 79,62,500/- totaling to Rs 11879822 on which TDS of Rs 118798 was deducted. The appellant had received this policy under Key man policy from Companies namely Esquire Finvest and Trading Private Limited and Shree Jhalaria Dealers Private Limited. The proceeds received have been shown under Income from Salary and due tax has been computed and paid. Ld. Assessing Officer has considered our computation of taxable income and taken the maturity amount under the income head “Income from other sources”. AO has also imposed surcharge as applicable due to addition exceeded one crore limit of income. In this process the maturity amount has been taxed twice. Hence, Assessee aggrieved and appeal.”

Before the Ld. CIT(A), the assessee had submitted that the two companies had taken two Key Man policies in his name in December 2011, the assessee paid the surrender value and transferred the same in his name. The maturity amount had been received and the difference between the maturity amount and the cost of acquisition was shown under the head of Salary but the CPC, Bengaluru added the same against the Income from Other Sources on the basis of Form No. 26AS. It was submitted that the rectification application filed was also not allowed. It was requested to remand the mater before the Ld. AO so that proper explanation could be ITA No(s). 1896/KOL/2025 Assessment Year(s) 2017-18 filed. The Ld. DR relied upon the order of the Ld. CIT(A) but did not oppose the request of the assessee.

We have considered the submissions made, gone through the facts of the case and perused the record and the order of the Ld. CIT(A). In the interest of justice and fair play it was considered by the Bench that the request of the assessee to set aside order of the Ld. CIT(A) and remand the matter before the Ld. AO may be allowed so that a proper opportunity of being heard may be provided. Hence, both the orders of the Ld. Addl/JCIT(A) as well as the Ld. AO are set aside and the issue is remanded before the Ld. AO for making computation of the income de novo after considering the explanation/evidence of the assessee relating to the same income being added twice and consequently, recompute the interest levied. Needless to say, the assessee shall be given a reasonable opportunity of being heard to make any further submission he wants to make in support of his grounds of appeal and shall not seek unnecessary adjournments. Accordingly, the grounds taken by the assessee in the appeal are partly allowed for statistical purposes.

In the result, the appeal filed by the assessee is partly allowed for statistical purposes. Order pronounced in the open Court on 8th September, 2026. [George Mathan] [Rakesh Mishra] Judicial Member Accountant Member Dated: 08.09.2026 Bidhan (Sr. P.S.)