2011 (8) TMI 1224 - AT - Income Tax

Summary

Issues Involved:
The judgment involves the interpretation of provisions u/s 263 of the Income-tax Act regarding the taxation of a gift received in the form of IMD Bonds, worth US $ 50,000, by the assessee. The main issue is whether the gift of IMD Bonds should be taxed u/s 56(2)(v) as income from Other Sources.

Summary of Judgment:

Issue 1: Taxation of Gift of IMD Bonds u/s 56(2)(v)
The CIT directed the A.O. to tax the gift of IMD Bonds received by the assessee under section 56(2)(v) of the Act, as it exceeded the specified limit and was transferred to the assessee after the relevant date. The assessee contended that since IMD Bonds are securities and not a "sum of money," section 56(2)(v) should not apply. The Tribunal analyzed the provisions of section 56(2)(v), (vi), and (vii) and noted that only the receipt of "sum of money" during specific periods was taxable. As IMD Bonds are considered securities falling under "Shares and Securities," the Tribunal held that the provisions of section 56(2)(v) were not applicable to the gift of IMD Bonds received before 1.10.2009. Citing a similar judgment, the Tribunal set aside the CIT's direction to tax the IMD Bonds u/s 56(2)(v) and allowed the appeal of the assessee.

Conclusion:
The Tribunal ruled in favor of the assessee, holding that the gift of IMD Bonds should not be taxed u/s 56(2)(v) as it was received before the relevant date specified in the Act. The direction of the CIT to tax the gift was set aside, and the appeal of the assessee was allowed.