9911796707
TMI Blog2012 (10) TMI 93X X X X Extracts X X X X X X X X Extracts X X X X ..... (v) of the Act and made an addition to the total income of the assessee. The AO made the additions on the ground that the status of IMDs with the facility of premature encashment available was on par with the legal status of a bank fixed deposit and held that treating the bank fixed deposits as not money would be an absurd interpretation and would defeat the very purpose of the enactment. In respect of the interest on the IMDs, the AO held that, that when a-gift is brought to tax under section 56(2)(v) of the Act, taxing the principal amount and exempting interest would be a travesty of law. He also made observations that the Donor and her family members had never in the past given any gift to any of the family members of the assessee and that giving of the gift at a time when the family of the assessee had earned huge unaccounted money from construction business cannot be purely co-incidental. The above facts have been summarized by ld CIT(A) at page 3 of the impugned order. 3. Ld CIT (A) has stated that assessee submitted before him that he furnished various documentary evidences to establish the genuineness of the aforesaid gift during the course of assessment proceedings. That ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in terms of free transferability and acceptability. The assessee also relied upon the decision of Hon'ble Supreme Court in the case of H.H. Sri Rama Verma v. CIT (187 ITR 308) (SC), wherein the meaning of the expression "any sum paid" in the context of deduction u/s. 80G of the Act came up for consideration. The Hon'ble Apex Court observed that Donations may be made by supplying goods of various kinds including building, vehicle or any other tangible property but such donations, though convertible in terms of money, do not fall within the scope of section 80G(2)(a) entitling an ássessee to deduction. Relying upon the ratio laid by Hon'ble Supreme Court, ld CIT(A) has stated that it was submitted before him that what has been gifted is IMD which is merely convertible into money and is not money by itself. Ld CIT(A) has further stated that assessee also referred the recent amendment made by Finance Act, 2009 by way of introduction of clause (vii) in subsection (2) of section 56 whereby gifts in kind have also been brought within the purview of section 56(2) of the Act. The said amendment has been introduced prospectively w.e.f. 01.10.2009 and therefore the same cannot be appli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itted by the appellant have been corroborated in the statement recorded by the AO. It is precisely for this reason that the AO has not invoked the provisions of section 68 of the Act. It is true that in the course of search proceedings as well, no evidence or material has been found to establish that the aforesaid gifts were not genuine. In this regard, it would be worthwhile to consider the provisions of s. 56(2)(v) of the Act which are reproduced hereunder: "56(2)(v) where any sum of money exceeding twenty-five thousand rupees is received without consideration by an individual or a Hindu undivided family from any person on or after the 1 day of September, 2004 but before the 1 day of April, 2006, the whole of such sum : Provided that this clause shall not apply to any sum of money received - ............." (emphasis supplied) The above section deals with only any 'sum of money'. The only issue in the present appeal is whether gift of IMDs can be equated with gift of money and thus brought within the purview of s. 56(2)(v) of the Act. The AO has equated the IMDs with bank fixed depo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of co-ordinate Bench in the case of ACIT vs. Anuj Agarwal, 130 TTJ 49(Mum) and also the decision of ITAT Vizag Bench in Sri Sarad Kumar Babulal Jain vs ITO (I.T.A. No.29/Viz/2011) order dated 11.8.2011 dismissed the appeal of department by confirming the order of ld CIT(A). We consider it prudent to state paras 15 to 17 of the said order which read as under: "15. The co-ordinate bench of the Tribunal in ACIT v/s Anuj Agarwal (supra), held as follows:- "Held: The gift in question was complete prior to 19th July, 2002. The gift deed dt. 19th July, 2002 records the fact that the gift was already completed prior to that date by delivery of IMD bonds by the donor to the donee. As rightly held by the CIT(A), gift would be complete in the financial year 2002-03 within the meaning of ss. 122 and 123 of the Transfer of Property Act, 1882, Provisions of s. 56(2)(v) applied only to gift in or after 1st Sept, 2004. The fact that maturity proceeds were received by the assessee during the previous year relevant to asst. yr. 2006-07 cannot be the basis to apply provisions of s. 56(2)(v). There is also force in the submissions of the counsel for the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X
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