2018 (5) TMI 938

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....,00,000/- qua gift received from HUF, in proceedings u/s. 143(3) of the Income Tax Act, 1961; in short "the Act". Heard both the parties. Case file perused. 2. We advert to the relevant facts qua assessee's sole substantive grievance qua the gift in question amounting to Rs. 1,02,00,000/- received from HUF added by both the lower authorities u/s.68 of the Act. There is no dispute about the fact that the eponymous HUF in question consists of assessee-karta, his wife Rajkumari and son Rakesh. The assessee has received the sum of Rs. 1,02,00,000/- by way of banking channel only. He claimed the said amount to be a gift without consideration covered u/s. 56(2)(vii) of the Act as inserted by the Finance Act, 2009 w.e.f. 01.10.2009. Ca....

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....havjibhai Bhalodia V/s ITO in ITA No.583 (RJT) 2007 dated 17-05-2011 delivered by the Hon'ble ITAT Bench, Rajkot. 7.2 The reason for making additions and the submissions made by the appellant alongwith case law cited have been carefully gone through. As per provisions of the Act relevant to the year under consideration, gift from HUF to any member of the HUF is not exempt from taxable income. It is other way that the gift from member to the HUF is exempt from tax. The appellant contended that it is implied when gift from member to HUF is exempt from tax, same way gift from HUF to Member is also tax free. But the appellant forgets the difference that the Karta of the HUF manages the affairs of the HUF as trustee of the HUF and o....

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....ll as on facts in rejecting assessee's gift claim being received from the HUF in question comprising of the three family members only. He quotes hon'ble apex court's judgment (supra) that the Income Tax Act does not postulate a separate definition of an HUF as the same has to be applied as in Hindu law. Mr. Shah seeks to emphasize that the other two HUF members i.e. assessee/karta's wife and son (supra) are already covered in "relative" definition clauses 'A' and 'E' of the Explanation (e) (supra). He states Assessing Officer and the CIT(A) have committed both illegality as well as irregularity in assessing the sum in question u/s.68 of the Act. He files a paper book comprising of assessee's submissions dated 17.08.2015 filed before the CIT....

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....hrough banking channel. Both the lower authorities are of the view that an HUF does not come under the specified category of a relative in Section 56(2)(vii) as applicable w.e.f. 01.10.2009. The assessee's main reliance is on this tribunal's Rajkot bench decision in Vineetkumar Raghavjibhai Bhalodia vs. ITO (supra) accepting a similar gift claim of individual assessee from HUF. The Revenue has preferred Tax Appeal No. 1326/2011 against the same before the hon'ble jurisdictional high court. The same stood admitted on 23.10.2012 for final adjudication. The fact however remains that much water has flown down the stream since the above co-ordinate bench decision. The assessment year therein is 2005-06. Relevant statutory provision at that point....

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.... clause. Coupled with this, the legislature itself has accepted an HUF to be a donee in clause (ii) of the "relatives" definition. We apply necessary implication principle to conclude in these facts that the legislative intent is very clear that an HUF is not to be taken as a donor in case of an individual recipient. Learned counsel's reliance on Surjit Lal Chhabda (supra) is therefore not acceptable in this peculiar legislative backdrop of facts and circumstances. Learned co-ordinate bench (supra) seem to have followed "Bholadia" case law which is no more applicable in view of subsequent legislative developments vide Finance Act, 2012 w.e.f. 01.10.2009 (supra). We thus do not treat the same as finding precedents as per (1993) 202 ITR 222 (....