No denial of exemption on maturity of life insurance policy just because policy was taken from foreign insurer

Facts:

a) The assessee received a certain amount on account of maturity of life insurance policy taken by her husband from American Insurance Company in Abu Dubai. She claimed tax exemption on such amount under section 10(10D).

b) The Assessing Officer disallowed the claim of the assessee on the ground that the insurance policy was not taken from Indian insurance company and, therefore, provisions of section 10(10D) were not applicable.

c) The Commissioner (Appeals) upheld the order of the Assessing Officer. The aggrieved assessee filed the instant appeal before the ITAT.

The ITAT held in favour of assessee as under:

1) Section 10(10D) provides that any sum received under life insurance policy is eligible for exemption, except in case of exceptions as culled out under clauses (a), (b) and (c). It was not the case of the revenue that the assessee falls under any of the exemption as enumerated in clauses (a), (b) and (c) of section 10(10D).

2) The lower authorities have given much stress on the definition of term 'Insurer' as provided under section 2(28BB). It is pertinent to note that the term 'insurer' has not been used in section 10(10D).

3) As per provisions of section 10(10D) any sum received under life insurance policy including the benefit on such policy is eligible for the deduction. Therefore, it is apparent that there was no intention of the legislature to restrict the benefit of exemption under section 10(10D) only on the insurance policy taken from Indian insurance company.

4) Thus, the assessee was entitled for exemption under section 10(10D) on the sum received under the life insurance policy taken from American Life Insurance Company. - [2016] 73 TAXMANN.COM 67 (MUMBAI - TRIB.)