Tuesday, May 10, 2016

Provisions relating to gift apply only to an Individual or HUF and not to an AOP

a)    Assessee was a beneficiary trust assessed in status of an AOP. It received a gift of Rs. 1.60 crore from one of its beneficiaries which was not included in total income in terms of section 56(2)(vi).
b)    Assessing Officer (AO) included said amount in income of the trust. The contention of the AO was that Section56(2)(vi) is an exemption provision which provides exemption in respect of gift subject to certain conditions, inter-alia, recipient of such gift should be an Individual or a HUF. However, in the instant case, assessee was assessed as an AOP and not as an Individual or a HUF. Therefore, it was not eligible for exemption under Section 56(2)(vi).

c)    The CIT(A) confirmed the order of the AO. Aggrieved by the order of the CIT(A), the assessee filed the instant appeal before the tribunal