KIRANKUMAR JAYANTILAL MALA,AHMEDABAD vs. THE DY.CIT, CIRCLE-2(1)(1), AHMEDABAD

The Ld. CIT(A) has erred, both in law and on facts, in not appreciating that AO was not at all justified in reopening the assessment u/s 147 of the Act.

The Ld. CIT(A) has erred, both in law and on facts, in confirming addition of Rs. 10,40,593/-made u/s 56 of the Act in respect of amount received on account of premature surrender of pension policy by treating the same as income from other sources.

The Ld. CIT(A) has erred, both in law and on facts, in not appreciating that section 80CCC(2) of the Act cannot be pressed into service in the facts of the present case.

Both, AO & CIT(A), have erred in passing the impugned orders without properly appreciating facts of the case, submissions of the assessee and documentary evidences available on record in the correct perspective. Such an act is in gross violation of the principles of natural justice and hence, the impugned order deserves to be quashed.

The facts of case are that assessee is an Individual. He has filed his Income Tax Return for A.Y. 2015-16 on 12.05.2016 declaring total income of Rs.38,61,260/-. Therefore, notice u/s 148 of the I.T. Act, 1961 was issued on 31.03.2021. In response to notice u/s 148 of the I.T. Act, 1961, the assessee filed return of income declaring same total income Rs.38,61,310/-. Thereafter, assessment was completed u/s 147 r.w.s 144B of the I.T. Act, 1961 vide order dated 21.03.2022 determining total assessed income of Rs.49,01,900/- after making addition of Rs. 10,40,593/-

Heard the argument of both the parties and perused the material available on record

After considering the facts of the case, the material placed on record, and the submissions made by the assessee, we find merit in the contentions raised by the assessee. The amount of Rs.10,40,593 was - 3– received by the assessee on premature surrender of a pension policy. The Assessing Officer treated the said amount as income chargeable under Section 56 of the Income-tax Act, 1961, and accordingly made the addition. However, having regard to the provisions of Section 80CCC(2) and the nature of the receipt, we are of the considered view that the addition made by the Assessing Officer and sustained by the learned CIT(A) is not in accordance with law. The assessee had made contributions to the pension fund in earlier years and the receipt on surrender of the policy cannot be brought to tax in the manner adopted by the Assessing Officer under the head “Income from Other Sources” without properly appreciating the statutory provisions and the factual matrix of the case. We further find that the reassessment proceedings as well as the addition were completed without due consideration of the submissions and documentary evidences furnished by the assessee. The authorities below failed to examine the issue in the correct legal perspective. Accordingly, the addition of Rs.10,40,593 is directed to be deleted.

In the result, the appeal filed by the assessee is allowed.

""थ" / The Respondent. 3. संबंिधत आयकर आयु" / Concerned CIT 4. आयकर आयु"(अपील) / The CIT(A)- 5. िवभागीय "ितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड" फाईल / Guard file.