Assessee had purchased pension policies which were surrendered during relevant assessment year. Assessing Officer made addition of accretion on account of premature surrender of pension policies to assessee’s income under section 56. CIT(A) affirmed the order of the AO. Tribunal held that  section 80CCC(2) is applicable only when assessee is covered under sub-section (1) i.e. where a deduction had been claimed and allowed under sub-section (1).On facts  there had been no claim of deduction under section 80CCC(1) by assessee, hence section 80CCC(2) is not  applicable. However, in respect of accretion, reference was required to be made to provisions of section 10(10D) to determine whether this amount was exempt under section 10(10D). Matter is  restored to file of Assessing Officer to examine eligibility of proceeds from surrender of policy for exemption under section 10(10D). (AY. 2015-16)