Kirankumar Jayantilal Mala Vs DCIT (ITAT Ahmedabad)
Premature Surrender of Pension Policy Not Taxable as ‘Income from Other Sources’: ITAT Deletes Addition
The Ahmedabad ITAT deleted the addition made under Section 56 in respect of amount received on premature surrender of a pension policy, holding that the Assessing Officer failed to properly appreciate the provisions of Section 80CCC(2) and the true nature of the receipt.
The assessee had received ₹10.40 lakh on surrender of a pension policy, which the Assessing Officer taxed as “Income from Other Sources” in reassessment proceedings under Sections 147/144B. The Tribunal observed that the assessee had made contributions to the pension fund in earlier years and the receipt arising on surrender of the policy could not be taxed in the manner adopted by the department without correctly examining the statutory framework and factual background. The Tribunal further noted that the reassessment as well as the addition were completed without due consideration of the assessee’s submissions and documentary evidences. Accordingly, the addition was deleted in full and the assessee’s appeal was allowed.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
The captioned appeal has been filed by the assessee against the order passed by the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (in short “NFAC”), Delhi order dated 20.11.2025 relevant to Assessment Year 2015-16.
