ITAT held assessee was an AOP and s 56(2)(vi) was inapplicable
ITAT held assessee was an AOP and s 56(2)(vi) was inapplicable
Assessee beneficiary trust received a gift of Rs.1.60 crores which was not included in its total income. AO noted that donor was related to beneficiaries, and rejected claim of exemption u/s 56(2)(vi) (of Income Tax Act, 1961), and made addition. AO disallowed LTCG loss on share transactions, holding loss to be bogus. CIT(A) confirmed AO’s order. ITAT held assessee was an AOP and that s 56(2)(vi) was inapplicable, and allowed claim. It allowed carry forward of loss.-501653
1. Assessee was a beneficiary trust which was constituted on 28.5.1999.
2. It filed its return showing income from house property, short-term capital gain and long-term capital gain.
3. The assessee declared to have received a gift of Rs.1.60 which was not included in total income.
4. The AO noted that the donor was related to the beneficiaries.
5. AO rejected the claim of exemption by the assessee u/s 56(2)(vi) (of Income Tax Act, 1961), and made an addition for the sum of Rs.1.60 crore.
6. The assessee suffered a long-term capital loss of Rs.1.86 crore on share transactions, which amount was carried forward for future set off.
7. AO disallowed such loss by holding it as bogus.
8. CIT(A) confirmed the addition and disallowance.
On appeal, the ITAT held as under:
9. The AO has rightly admitted the status of the assessee as an AOP and not an individual or HUF.
10. It is axiomatic from a plain reading of the provision that any sum exceeding Rs.50,000/- can fall within the ambit of section 56(2)(vi) (of Income Tax Act, 1961) only if it is received by an individual or HUF.
11. Since the assessee in question is an AOP and not any individual or HUF, who received a sum of Rs.1.60 crore without consideration, such a receipt in our considered opinion cannot be included in its total income within the framework of section 56(2)(vi) (of Income Tax Act, 1961).
12. We therefore, set aside the impugned order on this score and order for the deletion of this addition.
13. We hold that the loss suffered on such transactions is a genuine loss which cannot be disallowed as it does not fall within the ambit of section 10(38) (of Income Tax Act, 1961) because of non-payment of STT.
14. We direct the allowing of carry forward of loss amounting to Rs.1.86 crore.
Case Reference - Mridu Hari Dalmia Parivar Trust Vs. Assessing Officer.
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : E : NEW DELHI
BEFORE SHRI R.S. SYAL, AM & MS BEENA A. PILLAI, JM
ITA No.1880/Del/2014
(Assessment Year : 2010-11)
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