Dismissing the appeal of the assesse the Tribunal held that; Proviso to section 56 (2) (vii) provides definition of “relatives‟ in case of individual and HUF separately. It provides that above clause for taxability shall not apply to any sum of money or property received from any “relative‟. The “relative‟ have been mentioned separately with respect to an individual, and with respect to a Hindu undivided family. Therefore, in case of Hindu undivided family, if the gift is not received from member of such HUF then such sum is chargeable to tax. The “relatives‟ mentioned with respect to an individual cannot be considered when the recipient of the property is an HUF. Further, it substitutes the earlier definition of the “relative‟ when there was no reference about what constitutes “relatives‟ with respect to the HUF. It only talks about “relatives‟ with respect to an individual. Therefore, earlier the issue was that if the gift is received by an HUF from its members, probably it was taxable. To remove that lacuna and to give benefit to the HUF, the above amendment was made. The amendment also speaks through “notes on clauses‟ that now the definition of „relative‟ shall also include any sum or property received by an Hindu undivided family from its members apart from the persons referred to in the explanation with respect to an individual. It does not provide that if gift is made to an HUF by any of the „relatives‟ of those individuals comprising the HUF, who is not the member of the HUF, then such gift is not chargeable to tax. If such a view were accepted, then gift to HUF would never be chargeable to tax if it were received from the “relatives” of the members of such HUF. We are afraid that is not the language as well as the intention of the legislature. Even otherwise, When the language of the law is clear, support of the “notes on clauses‟ to the amendment does not help the assessee. Revision was held to be justified, however the assessee was directed to produce valuation report as per rule 11UA .( ITA No 3571/Del/2017, dt. 05.01.2018)(AY. 2013-14)
Subodh Gupta (HUF) v. PCIT ( 2018) 169 ITD 60 /166 DTR 153 / 193 TTJ 442(Delhi)(Trib) www.itatonline.org
S. 56: Income from other sources –Relative – Hindu Undivided Family (HUF)- Gift by the mother of the Karta of the HUF, to the HUF is liable to be taxed as the mother can not be considered as member of HUF – Revision was held to be justified – Assessee was directed to produce valuation report as per rule 11UA . [ S. 2(31 ), 56(2)(vii) ,263 ]