No Tax on Notional Keyman Policy Value – ITAT Deletes Addition on Unrealised Surrender Value

L. H. Sugar Factories Ltd. Vs DCIT (ITAT Lucknow) Assessee, a sugar manufacturing company, originally filed its return declaring income of ₹15.66 crores, which was assessed u/s 143(3) at ₹19.83 crores. Later,  AO reopened the assessment u/s 147 by issuing notice u/s 148 dated 29.03.2016, mainly alleging escapement of income on account of “surrender value” of Keyman Insurance Policies. In reassessment,  AO added ₹73,00,052/- being the revaluation / surrender value of Keyman Insurance Policies which had NOT matured during the year. Assessee argued that this was merely a notional figu...