Income Tax Act | ITAT Delhi Grants Relief In S.10(10D) Dispute; AO Directed To Reassess ULIP Maturity Proceeds Treated as Unexplained Investment

The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has remitted back the addition of capital gains deduction to the Assessing Officer (AO) for fresh adjudication in absence of a remand report despite repeated reminders.The Bench, comprising Mr. Mahavir Singh (Vice President) on the claim of assessee that income was an exempt income for being a sum received under life insurance policy noted AO's failure to furnish remand report. “It is noted that Ld. CIT(A) has admitted the additional evidences and remanded to the AO, by requisitioning the remand report, however, no report has been received by the CIT(A) from the AO, despite issuing 06 reminders, hence, he adjudicated the issues on merits in absence of any remand report.” Assessee claimed deduction under Section 54 of the Income Tax Act on Long-Term Capital Gains (LTCG) of Rs. 2.99 crore, which included ₹17.21 lakh from HDFC Mutual Fund. The Assessing Officer (AO) called-into-question genuineness of the claim on the ground that no corresponding investment was shown in the previous year's return (AY 2017–18). Resultantly, an order was passed whereby Rs. 17.21 lakh was added under Section 69 read with Section 115BBE as unexplained investment. On appeal, the Commissioner Income Tax (Appeals) has upheld the addition. Counsel for Assessee Advocate Kapil Dhyani put forth that the amount was exempt under Section 10(10D) of the Income Tax Act as it was received under a life insurance policy. It was claimed that the amount was maturity proceeds from Unit Linked Insurance Plans (ULIPs). It was stated that premiums were paid by her parents, hence not recorded in her books and claimed in the return. After hearing, the ITAT directed the AO to consider additional evidences during fresh adjudication, after giving adequate opportunity of being heard to the assessee. Accordingly, the ITAT allowed appeal in favour of assessee. Case Name: Anupama Agarwal vs. DCIT Case No. : ITA No. 5676/Del/2025 Date of Decision: 28.10.2025 Appearance: Kapil Dhyani & Associates for Assessee; Shri Manoj Kumar, Sr. DR for Respondent Click Here To Read/Download The Order

Income Tax Act | ITAT Delhi Grants Relief In S.10(10D) Dispute; AO Directed To Reassess ULIP Maturity Proceeds Treated as Unexplained Investment

Parul Bose

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