Sarvesh Naidu Vs DDIT (Inv.)-1 (ITAT Delhi)
ITAT Delhi: Foreign Life Policy Acquired as NRI Not Undisclosed Asset or Taxable Under Black Money Act; Section 10(10D) Exemption Applies to Maturity Proceeds Despite Foreign Insurer
The ITAT Delhi allowed the assessee’s appeal concerning ₹40,03,212.78 treated as undisclosed foreign income under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015. The assessee had obtained a life insurance policy in Dubai while non-resident, paying initial premiums from income not chargeable to tax in India and subsequent premiums from taxable salary income in India. The Tribunal observed that the sources of the premium payments were explained and, referring to CBDT Circular No. 13 of 2015, Questions 18, 24 and 32, held that the policy and maturity proceeds could not be treated as undisclosed assets or income under the Black Money Act. The Tribunal further held that Section 10(10D) of the Income-tax Act refers to “any sum received under a life insurance policy” and does not restrict the exemption to policies issued by Indian insurers. It held that Section 2(28BB), defining “insurer”, could not be read into Section 10(10D). Accordingly, Grounds 9 and 10 were allowed and the appeal was allowed, while the other grounds were kept open.
