Gift received by an individual from Hindu undivided family (HUF) isn't exempt
Gyanchand M. Bardia v. The Income Tax Officer (Income Tax Appellate Tribunal )– Ahmedabad 21 February, 2018
IN THE INCOME TAX APPELLATE TRIBUNAL
AHMEDABAD "D" BENCH AHMEDABAD
BEFORE, SHRI S. S. GODARA, JUDICIAL MEMBER
AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER
ITA No. 1072/Ahd/2016 (Assessment Year: 2012-13)
Income From Other Sources :- The assessee claimed that gift of question amount received from his HUF was exempt from tax under section 56(2)(vii) of Income Tax Act. However, the Assessing Officer held that the term 'relative' in Explanation (e) to Section 56(2)(vii) does not include Hindu undivided family (HUF) as donor and, therefore, added the impugned amount to assessee's income under Section 68 of this act.
On further appeal, the Income Tax Tribunal held in favour of revenue that as per Explanation to Section 56(2)(vii) members of an Hindu undivided family HUF are its relatives. Therefore, if Hindu undivided family (HUF) receives any sum from any of its member, such sum shall not be chargeable to tax. However, in vice-versa cases when member receives any sum from the HUF, same would be chargeable to tax as the term ‘relatives’ defined under said Explanation does not include HUF as a relative of such individual. The legislative intent is very clear that an Hindu undivided family is not to be taken as a donor in case of an individual recipient. Thus, the assessee's plea of having received a valid gift from his HUF was rightly declined and impugned addition was to be upheld.
The amount in question is exempt u/s.10(2) of Income tax Act. We find no merit in the instant alternative plea as well since a gift sum which is not allowable under the relevant specific clause cannot be ITA No. 1072/Ahd/16 And This assessee's ITAI appeal is dismissed
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