Home › Income-Tax Act › ITO v. Aam Family Private Trust ( Mum)( Trib) www.itatonlline .org

ITO v. Aam Family Private Trust ( Mum)( Trib) www.itatonlline .org

S. 56 : Income from other sources – Relative – Individual – Private discretionary trust – Gift of equity shares to trust – Trust crested for the benefit of self and relatives – Any sum received without consideration , aggregate value of which exceeds fifty thousand rupees – Pass through entity – Provision of section 56(2)(x) is not applicable [ S. 56(2)(x)) ] S. 56 : Income from other sources – Relative – Individual – Private discretionary trust – Gift of equity shares to trust – Trust crested for the benefit of self and relatives – Any sum received without consideration , aggregate value of which exceeds fifty thousand rupees – Pass through entity – Provision of section 56(2)(x) is not applicable [ S. 56(2)(x)) ]

The assessee is a private discretionary trust. Settlor Mrs Archana Miglani  settled moveable assets ( Value of equity shares)  in favour of  the trust . The beneficiaries of the Trust are, self, co- sister in law , Mother in law  , children of Mrs Archana & Children of  Mr Anuj Miglani  , Children of Mrs Priyanka & Mrs Ankit  Nephew & Nice of Miglani .  The  Assessing Officer treated the entire value of moveable assets   ( Value of equity shares)  settled by settlor of the Trust  , Smt Archana  Miglani in favour of trust by treating the same as income under section 56(2)(x) of the Act . On appeal the CIT(A) deleted the addition . On appeal by Revenue ,dismissing the appeal of the Revenue the Tribunal held that  , the  discretionary trust created by  Smt . Archana Miglani  for the benefit of her self , her co -sister in law , mother in law , own children , nephew and niece any sum of money received by the assessee trust  is not covered under section 52(2)(x) by virtue of the proviso, which reads as under :-

“ Provided that this clause shall not apply to any sum of money or any property received .-

  • to (ix )—————–

 

 (x) from an individual by a trust created or established solely for the benefit of relative of the individuals ;”

 

Tribunal also held that assessee in this case a pass through entity and it was the settlers money/ property which is given to the private discretionary trust for benefit of herself  and her relatives . Order of CIT(A) is affirmed .   ( ITA No. 2829/Mum/ 2022 dt 23 -2 -2023 )( AY. 2018 -19 )