Gift to company

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Rahul kela (Querist)

10 June 2014 An individual gifted a building cost 500000 fmv 700000 to a company. what is the tax treatment in the hands of company? nd if in same case a company gifted building to another company then also wats d tax treatment..

Nikhil Kaushik

Nikhil Kaushik (Expert)

11 June 2014 section 122 of the Transfer of the Property Act, 1882 requires that transfer of property by way of gift must be accepted by the donee and inter alia such acceptance must be made during life time of the donor and before the donee dies. The provisions using the words like death of donee are logically in the context of an individual and not in the context of an artificial person. In such a view of the matter, it is not possible for a company to claim gift and therefore receipts of sums of money without consideration may not escape taxation in the hands of a company under other provisions of the Income Tax Act, 1961.

So I don't think company can claim it as a gift.

refer file at
https://www.google.co.in/url?sa=t&rct=j&q=&esrc=s&source=web&cd=7&cad=rja&uact=8&ved=0CEsQFjAG&url=http%3A%2F%2Fxa.yimg.com%2Fkq%2Fgroups%2F11488745%2F1278243071%2Fname%2F2.Budget10%2BGifts%2Cdeemed%2Bgifts%2Cdeemed%2Bundervaluations.doc&ei=pYiXU5TkFYrn8AXmsYGgBw&usg=AFQjCNHkX5A18Pfa-G-F05jAd5wBv4BucQ&bvm=bv.68693194,d.dGc

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