Assessee is a private discretionary trust and was established under the provisions of Indian Trust Act, 1882 vide settlement deed dated January 23, 2018 executed between Mr. Anand Nadathur, being the Settlor and Vervain Management Private Limited, being the Trustee. The settlor settled investments amounting to INR 669,.27 crores , to the trust out of natural love and affection . The assessment was completed u\/s 143(3) of the Act . Commissioner revised the order on the ground that the AO has failed to conduct any enquiries due to which the order of the AO is erroneous and prejudicial to the interest of revenue. \u00a0On appeal the issue of jurisdiction u\/s 263 was not argued . Tribunal held that revision is justified on law and facts . Affirming the Revision order the Tribunal \u00a0held that \u00a0the benefit of the amount received was not restricted to the family members and hence the view of the AO is not plausible view therefore the PCIT is correct in law in holding the order as prejudicial to the interest of revenue. \u00a0Tribunal also held that the term shares and securities has been used it is abundantly clear that \u201cand\u201d should be read as \u201cor\u201d. Further literal interpretation in the present case is also giving an absurd meaning therefore the expression \u201cand\u201d used here should be read as \u201cor\u201d .Therefore \u00a0interest in partnership firm falls in the category of \u201cshares\u201d as used in explanation (d) of section 56(2)(vii). What is \u201cinterest in partnership firm\u201d has been decided by so many judicial pronouncements wherein this expression has been interpreted of expression. Accordingly \u00a0the term shares as used in explanation-2 of section 56(2)(vii) is not restricted to the shares of companies only, rather it is wide enough to mean a part or portion of something. For instance, “sharing” refers to dividing or giving out portions of something among several people. Merely because some expression is missing Tribunal \u00a0cannot restrict the meaning of a word. Tribunal held that it is settled position of law that that words should not be overly restricted; their meaning can be shaped by the context in which they are used. Legal texts, contracts, or laws often define words, but if a specific definition is not provided, courts or authorities may interpret the word according to its common usage or the broader context. Therefore the Tribunal has taken\u00a0 \u00a0the common meaning of word \u201cshare\u201d. As the \u00a0interest in partnership firm is nothing rather shares of partnership firm .Accordingly the Revision is affirmed on law and merit .(ITA No.1051 \/Bang\/2024 dt.30 -12 -2024 )( AY.2018 -19 )<\/p>\n","protected":false},"excerpt":{"rendered":"
S. 56 : Income from other sources -Discretionary trust -Property -Interest from partnership firm and shares from unlisted company -Trust for the benefit of relatives of settler -Power with the trustees to add any persons or class of persons or charity as beneficiaries – Revision order on the ground that the Trust is not wholly benefit of beneficiaries – Amount of Rs 669 crores received by the Trust is assessable under Section 56(2)(x) of the Act \u2013 Tribunal held that the interest in firm falls in category of shares -Benefit is not restricted to the benefit of relatives of the settler -Amount received is chargeable to tax under section 56(2)(x) \u2013 Revision order is affirmed on law and merit. [ S. 56(2) (viid) , 56(2)(x) ,263 Indian Trust Act , 1882 ] <\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21],"tags":[],"class_list":["post-49526","post","type-post","status-publish","format-standard","hentry","category-income-tax-act"],"acf":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p9S2Rw-cSO","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/49526","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/comments?post=49526"}],"version-history":[{"count":2,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/49526\/revisions"}],"predecessor-version":[{"id":49681,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/49526\/revisions\/49681"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/media?parent=49526"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/categories?post=49526"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/tags?post=49526"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}