AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2011 (5) TMI 584
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....assessee was the member. 2. The CIT (Appeals) further erred in law and on fact in not appreciating the alternative contention of the assessee that the receipt is otherwise exempt under section 10(2) of the I.T. Act, 1961. 3 The CIT (Appeals) further erred in upholding the charging of interest under section 234B and 234C of the I.T. Act, 1961." 3. The brief facts relating to grounds 1 & 2 are that during the course of assessment proceedings the assessing officer noticed that the assessee has accepted gift of Rs. 60 lakhs from Shri Raghavjibhai Bhanjibhai Patel (Bhalodia) HUF on 21-3-2005 and Shri Raghavjibhai Bhanjibhai (India) of Rs. 40 lakhs on 21-3-2005. The assessing officer was of the view that HUF is not covered in the definition of "relative". Therefore, the gift of Rs. 60 lakhs received from the HUF was held to be taxable. 4. The CIT(A) confirmed the view of the assessing officer that the term "relative" is defined in Explanation to Proviso to clause (v) of sub-section (2) of section 56 of the I.T. Act. The CIT(A) further observed that if the legislature wanted that money exceeding Rs. 25,000 is received by the member of ....
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....2) of the Act. The ld. AR submitted that the term "individual" would include a group of individuals, hence, an HUF would be covered by the term "individual". The ld. AR, in support of his contention relied upon the judgment of Karnataka High Court in the case of CWT v. C.P. Appanna [1993] 202 ITR 678/67 Taxman 181 the ld. AR has also relied upon the judgment of jurisdictional High Court in the case of CIT v. Gunvantlal Ratanchand [1994] 208 ITR 1028 (Guj.). The ld. AR has, further relied upon the judgment in the case of Jain Merchants' Co-operative Housing Society Ltd v. HUF of Manubhai Kalyanbhai Shah in Special Civil Application XXXVI(1) 19 and submitted that in the said judgment the term "individual" is held to include group of individuals as also joint families. 6. The alternative contention of the ld. AR that the amount received from his father's HUF of which the assessee is also a member. Therefore, the receipt is exempt under section 10(2) of the Act. The ld. AR submitted that section 10(2) uses the language "paid out of the income of the family". The assessing officer wants to read the language as "paid out of the income of the previous year of the family" which is not the....
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.... The ld. DR submitted that how a gift can be given to himself. The ld. DR in support of his contention relied upon the judgment of Karnataka High Court in the case of Patil Vijaykumar v. Union of India [1985] 151 ITR 48/20 Taxman 363. 10. We have heard the ld. representatives of the parties, record perused and gone through the decisions cited. The crux of the issues in the case under consideration, are - (1) Whether gift received from HUF by a member of HUF falls under the definition of "relative" as provided in the Explanation to clause (vi) of sub-section (2) of section 56 of the Act?; (2) Whether amount received by assessee from his HUF is covered by section 10(2) of the Act? 11. Clause (vi) of section 56(2) of the Act has been inserted with effect from 1-4-2007 by Taxation Laws (Amendment) Act, 2006 so as to provide that where any sum of money, the aggregate value of which exceeds rupees fifty thousand is received without consideration by an individual or an HUF in any previous year from any person or persons on or after 1st April, 2006 but before the 1st day of October, 2009, the whole of the aggregate value of such sum shall be included in the tota....
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.... that gift presented by the secretary of the staff club on behalf of the staff club be termed as a gift from the secretary of the staff club alone and not from all the members of the club, as such? In our opinion answer to this quoted example would be that the gift presented by the secretary of the club represents the gift given by him on behalf of the members of the staff club and it is the collective gift from all the members of the club and not the secretary in his individual capacity. And if it is held otherwise, it will lead to an absurdity of interpretation which is not acceptable in interpretation of statutes as has been held by the Hon'ble Apex Court in the case of K. Govindan & Sons (supra). 11.2 Further, from a plain reading of section 56(2)(vi) along with the Explanation to that section and on understanding the intention of the legislature from the section, we find that a gift received from "relative", irrespective of whether it is from an individual relative or from a group of relatives is exempt from tax under the provisions of section 56(2)(vi) of the Act as a group of relatives also falls within the Explanation to section 56(2)(vi) of the Act. It is not expressly de....
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....estate, whose such sum has been paid out of the income of the estate belonging to the family, subject however, to the provisions of section 64(2) of the Act. The object of the provision is that a Hindu Undivided Family, according to section 2(31) is a "person" and a unit of assessment. Income earned by a HUF is assessable in its own hands, so as to avoid double taxation of one and same income once in the hands of the HUF which earns it, and again in the hands of the member whom, it is paid. In respect of the family property qua its members it has been held by various authorities and courts that there is an antecedent title of some kind of a Member in the properties of HUF and a family arrangement which merely acknowledges and defines how that title is looked at and it is not an alienation of property at all. But even if it should be regarded as a transfer, the object of avoiding family litigation is consideration in money's worth. The real consideration in a family arrangement is based upon a recognition of a pre-existing right hence, there is no transfer of property at all. The Hon'ble Apex Court in CGT v. N.S. Getti Chettiar [1971] 82 ITR 599 based its observation on that ground ....
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....ransaction between a member of HUF and the HUF the Income-tax Act provides section 10(2) and section 64(2). Section 10(2) is not similar to section 64(2). It deals with the transaction differently which would mean that the legislature in their own wisdom was aware about the circumstances and accordingly provisions are enacted in the Act. Therefore, in our opinion, both the situation of amount received and amount given to HUF by a member is to be dealt with accordingly. 12.2 The CIT(A) while considering sections 10(2) and 10(2A) of the Act held that firstly the amount received on partial partition or on partition is only exempt and secondly to the extend of share of assessed income of HUF for the year would only be exempt. We are not in agreement with the view of the CIT(A). Firstly, there is no provision in the Act to contend that it is applicable only to the extend of income of the year. Secondly, the property or the income of HUF belongs to the members thereof who are either entitled to share in the property on partition or have a right to be maintained. For getting exemption under section 10(2) two conditions are to satisfy. Firstly, he is a member of HUF and secondly he receiv....