Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2019 (8) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (8) TMI 178 - AT - Income TaxAddition of foreign dividend income belonging to two trusts - irrevocable trust created for the benefit of children - AO took the view that the entire dividend income would belong to the assessee only - As per the trust deed, the income shall be accumulated and the minor children are entitled to receive it only after they attain majority. Accordingly, it was submitted that the foreign dividend income belonging to these two trusts are not liable to be included in the hands of the assessee and accordingly it was not offered to tax in India by the assessee. - AO took the view that the entire dividend income would belong to the assessee only. - AO further held that if the dividend income belonging to the trusts is paid to the trusts subsequently by the assessee, the same would amount application of income only HELD THAT:- Since the tax status of the assessee is “resident and ordinarily resident” in India, he is liable to declare his global income, i.e., all income accruing or arising to the Individual or his minor children (if it is liable to be clubbed in his hands) globally shall be included in the total income of the assessee. Hence, before proceeding to club the dividend income accruing or received by the trusts created for the benefit of minor children, it is mandatory to show that the said income accrued or was received by the minor children. The tax authorities have taken the view that the dividend income relating to shares held by the trusts created for the benefit of children actually belongs to the assessee only and even if it is said to belong to his children, then the same is liable to be clubbed u/s 64(1A). They were constrained to hold so for reasons that the entire dividend income was received in the bank account of the assessee, it has been declared in the tax returns of the assessee, the trusts have not filed returns of income, there is no bank account in the name of trusts at that point of time etc. All these flaws/points have been addressed by the assessee by furnishing explanations before us in the form of additional evidences furnished before us. A.R has clarified the reasons for receiving and declaring entire income by the assessee, copies of amended tax return and copies of tax returns filed by trusts, bank account details of trusts, copies of letter issued by the company, amended dividend certificate etc. The assessee has clarified all the flaws pointed out by the tax authorities. Since these documents are additional evidences and since there was no occasion for the AO to examine them, we are of the view that the issue urged before us require fresh examination at the end of the AO in the light of discussions made supra, by duly considering additional evidences furnished by the assessee. We set aside the order passed by CIT(A) and restore the impugned issue to the file of the AO for examining it afresh in the light of discussions made supra by duly considering the additional evidences furnished by the assessee. - Appeal of the assessee is treated as allowed for statistical purposes.
|