Assessee received a sum of Rs. 12 lakhs towards premature surrender of life insurance policy and premium paid was Rs. 8 lakhs. Assessing Officer held  that receipt of insurance amount which was reflected in Form No. 26AS was not included in total income.  He  passed assessment order under section 143 and made addition with respect to said amount. Held that commencement of policy was on 30-08-2011 with amount of premium at Rs. 8.00 lakhs for a sum assured at Rs. 16.00 lakhs and premium exceeded 20 per cent of the sum assured. Since sum received falls in exception clause (c) of section 10(10D) and income would become chargeable to tax, however, as per Circular no. 07/2003, dated 5-9-2003 even though deduction of tax at source under section 194DA is contemplated on gross amount paid under a life insurance policy, but income would be such sum received as reduced by amount of premium paid. Section 143(1) provided for making adjustment by way of ‘addition of income appearing in Form No. 26AS’ and not sum so appearing in Form, amount of income which could be added by means of adjustment under section 143(1)(a)(vi) would be sum received as reduced by amount of premium.  (AY. 2017-18)