Exempt gifts under section 56 of the i.t.act

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Querist : Anonymous

Querist : Anonymous (Querist)

15 August 2018 An HUF gifted house properties to some of its members in F.Y.2017-2018. Are these gifts exempt under Section 56 of the I.T.Act?

Nikhil Kaushik

Nikhil Kaushik (Expert)
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15 August 2018 refer https://www.taxscan.in/gift-received-member-huf-not-subject-income-tax-itat-mumbai-read-order/7795/

Querist : Anonymous

Querist : Anonymous (Querist)

15 August 2018 In view of the amendments to Section 56 of the I.T.Act, does the ruling of the ITAT Mumbai, in a case related to Assessment Year 2010-11 apply unambiguously to a transaction in F.Y.2017-18, applicable to Assessment Year 2018-19?

Nikhil Kaushik

Nikhil Kaushik (Expert)
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15 August 2018 which amendment are you referring to?

Querist : Anonymous

Querist : Anonymous (Querist)

16 August 2018 I am referring to Section 56(2)(x) which covers gifts received after 1st April, 2017

Nikhil Kaushik

Nikhil Kaushik (Expert)
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16 August 2018 and did the language of relative changed ? always read the full section. did you read the explanation to section 56(2)(x)?

Querist : Anonymous

Querist : Anonymous (Querist)

16 August 2018 There is a view held by some CAs that gift to HUF by a member is exempt under Section 56, but not vice versa. What could be the reason for holding this view?

Nikhil Kaushik

Nikhil Kaushik (Expert)
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16 August 2018 i prefer going by judicial precedents. search for relevant case laws. review and see what you find.

Querist : Anonymous

Querist : Anonymous (Querist)

17 August 2018 A strict interpretation of Section 56(2)(x) would seem to indicate that gift by HUF to a member/members is not covered under the exemption of the Section, but would have to be added to the income of the recepient member. Can the Assessing Officer take a stand that he does not agree with the ruling of the ITAT Mumbai, and proceed to assess accordingly? What is the remedy available to the assessee?

Nikhil Kaushik

Nikhil Kaushik (Expert)
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17 August 2018 then appeal the order. as simple as that.

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