ASST CIT CC 38, MUMBAI v. JANARDAN AGARWAL, MUMBAI

ITA 4826/MUM/2012 | 2009-2010
Pronouncement Date: 18-10-2013 | Result: Dismissed

Appeal Details

RSA Number 482619914 RSA 2012
Assessee PAN ADFPA8150R
Bench Mumbai
Appeal Number ITA 4826/MUM/2012
Duration Of Justice 1 year(s) 2 month(s) 25 day(s)
Appellant ASST CIT CC 38, MUMBAI
Respondent JANARDAN AGARWAL, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 18-10-2013
Appeal Filed By Department
Order Result Dismissed
Bench Allotted J
Tribunal Order Date 18-10-2013
Date Of Final Hearing 10-10-2013
Next Hearing Date 10-10-2013
Assessment Year 2009-2010
Appeal Filed On 23-07-2012
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL J JJ J BENCH BENCH BENCH BENCH MUMBAI MUMBAI MUMBAI MUMBAI . . . ! ! ! ! ' ' ' ' #$ #$ #$ #$ BEFORE BEFORE BEFORE BEFORE SHRI SHRI SHRI SHRI VIJAY PAL RAO JM VIJAY PAL RAO JM VIJAY PAL RAO JM VIJAY PAL RAO JM & & & & SHRI SHRI SHRI SHRI N. K. BILLAIYA N. K. BILLAIYA N. K. BILLAIYA N. K. BILLAIYA AM AM AM AM ./ I.T.A I.T.A I.T.A I.T.A. NO. . NO. . NO. . NO.4826/MUM/2012 4826/MUM/2012 4826/MUM/2012 4826/MUM/2012 ( % % % % & & & & / ASSESSMENT YEAR :2009-10) ACIT CC-38 R. NO. 32(1) GROUND FLOOR AAYAKAR BHAVAN M. K. ROAD MUMBAI-400020 / VS. SHRI JANARDAN AGARWAL 315/A MITTAL PARK J. M. ROAD JUHU MUMBAI-400049 $' ' ./ ( ./ PAN/GIR NO. : ADFPA8150R ( ') / APPELLANT APPELLANT APPELLANT APPELLANT) .. ( *+') / RESPONDENT RESPONDENT RESPONDENT RESPONDENT) ') ') ') ') / APPELLANT BY : SHRI S. D. SHRIVASTAVA *+') *+') *+') *+') - -- - /RESPONDENT BY : SHRI VIJAY MEHTA - -- - .' .' .' .' / DATE OF HEARING : 10 TH OCTOBER 2013 /0& /0& /0& /0& - -- -.' .' .' .' /DATE OF PRONOUNCEMENT: 18 TH OCTOBER 2013 #1 / O R D E R PER : . . / VIJAY PAL RAO JM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 16.5.2012 OF COMMISSIONER OF INCOME TAX(APPEALS) FO R THE ASSESSMENT YEAR 2009-10. 2. THE ONLY EFFECTIVE GROUND RAISED BY THE REVENUE IN THIS APPEAL IS AS UNDER: WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND IN LAW THE LD. CIT(A) IS JUSTIFIED IN HOLDING THAT AMOUNT OF ` 30 37 600/- RECEIVED BY THE ASSESSEE ON MATURITY OF KEYMAN INSURANCE POLICY IS NOT TAXABLE AND IS EXEMPT UNDE R SECTION 10(10D) OF THE INCOME TAX ACT IGNORING THE CIRCULAR NO. 762 DATED 18.2.1998 ISSUE BY CBDT WHEREIN IT WAS CLARIF IED THAT SUCH AMOUNT IS TAXABLE IN THE HANDS OF RECIPIENT. ITA NO.4826/M/2012 JANARDAN AGARWAL 2 3. DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE HAS RECEIVED ` 30 37 600/- ON ACCOUNT OF MATURITY OF KEYMAN INSUR ANCE POLICY. THE ASSESSEE HAS SHOWN THE SAME AS CREDITED IN HIS CAP ITAL ACCOUNT AND NOT OFFERED AS INCOME FOR THE PURPOSE OF CALCULATING TH E TAXABLE TOTAL INCOME. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AO ASKED THE ASSESSEE TO SUBMIT DETAILS OF POLICY PROOF OF PAYMENT OF PR EMIUM OF SUCH POLICY BY THE ASSESSEE AND ALSO SHOW CAUSE WHY THE AMOUNT REC EIVED BY HIM SHOULD NOT BE TREATED AS THE TAXABLE INCOME. IN RES PONSE THE ASSESSEE STATED THAT KEYMAN INSURANCE POLICY WAS TAKEN BY M/S BOMBAY RAYON FASHIONS LTD. IN WHICH HE IS A DIRECTOR. THE INSURA NCE PREMIUM ON THE SAID POLICY WAS PAID BY THE COMPANY. IT WAS FURTHER STAT ED THAT THE SAID POLICY WAS ASSIGNED TO HIM BY THE COMPANY IN THE ASSESSMEN T YEAR 2007-08 AND THE ASSIGNMENT VALUE ON THAT DATE WAS ` 16 61 640/- . THUS THE ASSESSEE CLAIMED THAT THE AMOUNT RECEIVED BY HIM ON MATURITY OF SUCH KEYMAN INSURANCE POLICY IS EXEMPT IN HIS HAND AS PER THE PROVISIONS OF SECTION 10(10D) OF THE ACT. THE ASSESSEE HAS CONTENDED THAT AFTER ASSIGNMENT OF SUCH POLICY HAS BECOME A NORMAL LIFE INSURANCE POLI CY. THE AO DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE AND HELD THAT THE KEYMAN INSURANCE POLICY TAKEN BY THE COMPANY AND SUBSEQUE NTLY THE ALLEGED ASSIGNMENT IS AN ATTEMPT TO AVOID TAX BY MISUSING O F SECTION 10(10D). ACCORDINGLY THE AO ADDED THE SAID AMOUNT OF ` 30 3 7 600/- TO THE TOTAL INCOME OF THE ASSESSEE. ON APPEAL THE CIT(A) HAS A LLOWED THE CLAIM OF THE ASSESSEE BY FOLLOWING THE DECISION OF HONBLE D ELHI HIGH COURT IN CASE OF CIT VS RAJAN NANDA 349 ITR 8. ITA NO.4826/M/2012 JANARDAN AGARWAL 3 4. BEFORE US THE LD. DR HAS STRONGLY RELIED UPON TH E ORDER OF THE ASSESSING OFFICER AND SUBMITTED THAT AS PER THE PRO VISIONS OF SECTION 2(24) AND SECTION 10(10D) OF INCOME TAX ACT AS EXIST AT T HE RELEVANT POINT OF TIME THE AMOUNT RECEIVED ON KEYMAN INSURANCE POLIC Y IS TAXABLE INCOME. ON THE OTHER HAND THE LD. AR OF THE ASSESS EE HAS RELIED UPON THE DECISION OF HONBLE DELHI HIGH COURT IN CASE OF CIT VS RAJAN NANDA (SUPRA) AS WELL AS DECISION OF CO-ORDINATE BENCH OF THIS TR IBUNAL DATED 6.9.2013 IN CASE OF ASSESSEES BROTHER SHRI PRASHANT AGRAWAL AN D SUBMITTED THAT THE ISSUE IS COVERED BY THE DECISION OF DELHI HIGH COUR T AS WELL AS CO-ORDINATE BENCH OF THIS TRIBUNAL. 5. HAVING CONSIDERED THE RIVAL SUBMISSIONS AND CARE FUL PERUSAL OF THE RELEVANT RECORD WE NOTE THAT AN IDENTICAL ISSUE HAS BEEN CONSIDERED BY THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN CASE OF A CIT VS PRASHANT AGRAWAL IN ITA NO. 4825/2012 IN PARA 7 AS UNDER: 7. WE HAVE HEARD RIVAL SUBMISSIONS AND CONSIDERED THEM CAREFULLY. AFTER CONSIDERING THE SUBMISSION AND PER USING THE MATERIAL ON RECORD WE FIND NO INFIRMITY IN THE FIN DINGS OF THE LEARNED CIT(A) WHO HAS ALLOWED THE ISSUE IN FAVOUR OF THE ASSESSEE FOLLOWING THE DECISION OF THE HONBLE DELH I HIGH COURT IN THE CASE OF RAJAN NANDA (SUPRA). IDENTICAL ISSUE WA S INVOLVED IN THE AFORESAID CASE AND THE HONBLE DELHI HIGH COURT AFTER CONSIDERING THE PROVISIONS OF SECTION 10(10D) AND T HE CBDT CIRCULAR AND ALSO PERUSING THE DECISIONS I.E. IN TH E CASE OF CIT VS B. N. EXPORTS REPORTED IN (2010) 323 ITR 178 (BOM) AND VARIOUS OTHERS HELD THAT THE AMOUNT RECEIVED ON KEYMAN INS URANCE POLICY IS EXEMPT BY THE SECTION 10(10D) OF THE ACT. THERE IS NO CONTRARY DECISION AVAILABLE TILL DATE. THEREFORE W E SEE NO REASON TO INTERFERE IN THE FINDINGS OF THE LEARNED CIT(A) WHO HAS DECIDED THE ISSUE FOLLOWING THE DECISION OF THE HONBLE DEL HI HIGH COURT IN THE CASE OF RAJAN NANDA (SUPRA). THE HONBLE DELHI HIGH COURT HAS ALSO TAKEN INTO CONSIDERATION THE CBDT CIRCULAR AND CAME TO THE CONCLUSION THAT THE AMOUNT RECEIVED ON ACCOUNT OF KEYMAN ITA NO.4826/M/2012 JANARDAN AGARWAL 4 INSURANCE POLICY IS EXEMPT BY THE SECTION 10(10D) O F THE ACT. ACCORDINGLY WE CONFIRM THE ORDER OF THE LEARNED CI T(A). 6. AS IT IS CLEAR FROM THE ORDER OF THIS TRIBUNAL I N ASSESSEES BROTHER CASE THAT THE TRIBUNAL HAS FOLLOWED THE DECISION OF HONBLE DELHI HIGH COURT IN CASE OF CIT VS RAJAN NANDA (SUPRA) AS WELL AS THE DECISION OF HONBLE JURISDICTION HIGH COURT IN CASE OF CIT VS B . N. EXPORTS 323 ITR 178. ACCORDINGLY FOLLOWING THE ORDER OF CO-ORDINATE BENC H OF THIS TRIBUNAL (SUPRA) WE DECIDE THIS ISSUE AGAINST THE REVENUE AN D IN FAVOUR OF THE ASSESSEE. THE ORDER OF CIT(A) QUA THIS ISSUE IS UPH ELD. 7. IN THE RESULT THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 18 TH DAY OF OCTOBER 2013 SD/- SD/- ( . . ! ) ' #$ (N. K. BILLAIYA) ACCOUNTANT MEMBER ( ) % #$ (VIJAY PAL RAO) JUDICIAL MEMBER PLACE: MUMBAI : DATED: 18 TH OCTOBER 2013 SUBODH COPY FORWARDED TO: 1 APPELLANT 2 RESPONDENT 3 CIT 4 CIT(A) 5 DR /TRUE COPY/ BY ORDER DY /AR ITAT MUMBAI