The Tribunal held that the stand of the Dept that in the case of an individual, a “HUF” is not a “relative” and that while a gift by the individual to the HUF is exempt, a gift from the HUF to its member is taxable u/s 56(2)(vii) is not correct. S. 56 (2) (vii) provides that the members of the ‘HUF’ are to be taken as “relatives”. The converse is not provided because on first principles, amounts received by a member from the ‘HUF’ cannot be said to be income of the member exigible to taxation. Terming by the PCIT of decisions of the Tribunal as “incorrect” tantamounts to judicial indiscipline and will lead to chaos. Order u/s 263 is quashed. ( ITA No. 773/C HD /2018, dt. 17.07.2019)(AY. 2011-12)
Pankil Garg v. PCIT ( 2019) 181 DTR 305 (Chand)(Trib),www.itatonline.org
S. 56 : Income from other sources –HUF –Relative – Amounts received by a member from the ‘HUF’ cannot be said to be income of the member exigible to taxation- Revision is held to be not valid [ S.56(2) (vii), 263 ].