In this case, the trustees were the parents and the beneficiaries were their two daughters. Subsequently, the parents were added as additional beneficiaries, when the original beneficiaries relinquished their rights. The said trust was dissolved and the assets were equally distributed among the parents.
The AO made addition of amount received by parents to their total income. On appeal, CIT(A) held that the amount received by parents would be taxable as gift under Sec. 56(2)(v), on following grounds:
a) Neither there was specific transfer nor gift by both the daughters to their parents;
b) As the sum was received without consideration and the said trust did not fall within the ambit of the word "Relative".
On further appeal, the Tribunal held that undisputedly, the assessee had received the amount on dissolution of trust in the capacity of beneficiaries. Therefore, the amount received by the parents could not be termed as amount received by the beneficiaries "without consideration". Therefore, addition made by AO was deleted and assessee's claim has been allowed - ASHOK C. PRATAP v. ACIT[2012] 23 taxmann.com 347 (Mumbai - Trib.)
|
Thursday 26 July 2012
Amount received by trustee-cum-beneficiary on dissolution of trust is not 'gift' to be taxed under sec. 56
Subscribe to:
Post Comments (Atom)
Karnataka High Court ruling - International Worker provisions under the Provident Fund law held to be unconstitutional and arbitrary
On 25 April 2024, the Hon’ble High Court of Karnataka delivered a judgement (W.P. No.18486/2012 and others) striking down the special prov...
-
Particulars in Part 1 and Part 2 of Step-2 of registration form are required to be exactly the same as reported in the TDS statement. Plea...
-
1. Introduction: Every trust/charitable society/ NGO that wishes to claim the tax exemption benefits has to file Form 10A to seek fresh re...
-
LEASE-DEED (A brief Introduction) Lease defined. A lease of immovable property is a transfer of a right to enjoy such property, mad...
-
NECESSITY : Sometimes, in view of the expansion of the business, multiple increase in turnover and need for getting finances from the ...
-
Filing income tax returns (ITR) within the specified timelines under the Income-tax Act is not just a legal obligation but also crucial fo...
-
Earlier this year, the Mauritius Government approved the amendment to the India – Mauritius tax treaty, aligning it with the proposal of th...
-
This Tax Alert summarizes a recent instruction issued by the SEZ Division, Department of Commerce, clarifying various concerns relating t...
-
This Tax Alert summarizes a recent judgement of the Delhi High Court (HC) [1] dealing with the issue of denial of input tax credit (ITC) ...
-
Section 17(5)(c) and (d) of the Central Goods and Services Tax Act, 2017, blocks input tax credit for works contract services, goods or serv...
-
Introduction The law relating to companies is laid down in Companies Act, 2013 and the rules made thereunder and t...
No comments:
Post a Comment