HEMAL D. SHAH, MUMBAI V. DCIT 25(3), MUMBAI

ITA 2627/MUM/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 8130 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-03-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: F
• Next Hearing Date: 30-01-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 07-05-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: POOJA SWARUP
• Keywords: Gift; Business income; Bad and doubtful debts
• Section: 143(3); 56(2); 37; 6; 56

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH F,MUM BAI BEFORE SHRI B.R. BASKARAN, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO.2627/MUM/2015 (ASSESSMENT YEAR- 2010-11) SHRI HEMAL D. SHAH 1101, SUNRISE TOWER, RAMGALLY, KANDIVALI (WEST), MUMBAI-400067 PAN: AOFPS0633E VS. DCIT -25(3), PRATYAKSHYAKAR BHAWAN, BANDRA KURLA COMPLEX, BANDRA (EAST), MUMBAI- 4000251 (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. RAJESH KOTHARI -AR REVENUE BY : MS. POOJA SWARUP (DR) DATE OF HEARING : 30.01.2017 DATE OF PRONOUNCEMENT : 08.03.2017 ORDER UNDER SECTION 254(1) OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER: 1. THIS APPEAL BY ASSESSEE U/S 253 OF THE INCOME-TAX A CT (THE ACT) IS DIRECTED AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME-TAX (APPEALS) [FOR SHORT THE CIT(A)] 35, MUMBAI DATED 13.01.2015 FOR ASSESSMENT YEAR (AY) 2010-11. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL ARE THAT: (I) THE LD. CIT(A) ERRED IN CONFIRMING THE DENIAL OF LO SS OF RS. 1,00,000 FROM BUSINESS INCOME. (II) LD. CIT(A) ERRED IN CONFIRMING THE ACTION OF AO FOR TAXING THE GIFT OF RS. 44,55,000/- RECEIVED FROM DINESH J. SHAH HUF U/S. 5 6 OF THE INCOME-TAX ACT, 1961. (III) THE LD. CIT(A) ERRED IN TAXING THE GIFT OF RS. 14,4 0,000/- RECEIVED FROM PANKAJ J. SHAH HUF U/S. 56 OF THE INCOME-TAX ACT, 1961 2. BRIEF FACTS OF THE CASE ARE RELATED WITH THE GROUND S OF APPEAL RAISED IN THIS APPEAL ARE THAT ASSESSEE IS INDIVIDUAL AND ENGAGED IN THE BUSINESS OF TRADING AND SPECULATIVE ACTIVITIES IN SHARE AND SECURITIES. THE ASSESSEE FILED RETURN OF INCOME FOR RELEVANT AY ON 24.09.2010 DECLARING TOTAL INCOM E OF RS. 21,48,080/-. THE ITA NO.2627/M/201 SHRI HEMAL D. SHAH 2 ASSESSMENT WAS COMPLETED U/S. 143(3) OF THE ACT ON 22.03.2013. THE ASSESSING OFFICER (AO) WHILE PASSING THE ASSESSMENT ORDER BES IDES THE OTHER ADDITION/DISALLOWANCE DISALLOWED THE CLAIM OF BAD D EBT OF RS. 1,00,000/- AND TREATED THE GIFT OF RS. 14,40,000/- RECEIVED FROM P ANKAJ J. SHAH HUF AND RS.44,55,000/- RECEIVED FROM DINESH J. SHAH HUF AS INCOME UNDER THE HEAD INCOME FROM OTHER SOURCES U/S 56(2)(VI) AND BROUG HT THE AMOUNT TO TAX. ON APPEAL BEFORE THE LD. CIT(A), THE DISALLOWANCE OF B AD DEBT AND TREATING THE GIFT AS INCOME U/S 56 WAS SUSTAINED. THUS FURTHER AGGRIEVED BY THE ORDER OF LD. CIT(A), THE ASSESSEE HAS FILED THE PRESENT APPEAL BEFORE US . 3. WE HAVE HEARD THE LD. DEPARTMENTAL REPRESENTATIVE ( DR) FOR THE REVENUE AND PERUSED THE MATERIAL AVAILABLE ON RECORD. GROUND NO .1 RELATES TO DISALLOWANCE OF LOSS OF RS. 1,00,000/- RELATED TO DEPOSIT GIVEN FOR THE PURPOSE OF BUSINESS IN EARLIER YEARS. THE LD AR FOR THE ASSESSEE ARGUED THAT THE L D CIT(A) NOT CONSIDERED THE ASSESSEES PLEA THAT LOSS WAS SUFFERED DUE TO THE B USINESS ACTIVITY OF THE ASSESSEE. THE LD. DR FOR THE REVENUE SUPPORTED THE ORDER OF A UTHORITIES BELOW. 4. WE HAVE CONSIDERED THE RIVAL CONTENTION OF THE PART IES. WE HAVE NOTICED THAT THE ASSESSEE IN THE STATEMENT OF FACT BEFORE LD CIT(A) PLEADED THAT ASSESSEE HAS GIVEN ADVANCES/DEPOSIT OF RS. 3,00,000/- IN FINANCIAL YEA R (FY) 2006-07 TO M/S MAN FINANCE. THE NAME OF MAN FINANCE IS CHANGED TO SIFY INDIA PVT. LTD. THE ASSESSEE RECEIVED BACK OF RS. 2,00,000 OUT OF RS. 3,00,000/- IN NOVEMBER 2009 AND THE BALANCE AMOUNT OF RS. 1,00,000/- IS CLAIMED BY ASSE SSEE AS BAD-DEBTS. THE AO DISALLOWED THE BAD DEBTS HOLDING THAT THE AMOUNT W AS NOT OFFERED IN EARLIER AS INCOME AND IT DOES NOT RELATED TO TRADE DEBTS AND T HAT THE ASSESSEE HAS JUST MADE THE GENERAL STATEMENT AND NOT BEEN ABLE TO PROVE TH AT THE DEBT OF RS. 1,00,000/- HAS NOW BECOME BAD OR WAS OFFERED AS INCOME IN EARL IER YEARS. THE LD. CIT(A) WHILE CONSIDERING THIS GROUND OF APPEAL OBSERVED TH AT THE ASSESSEE COULD RECOVER RS. 89,216/- IN FEBRUARY 2011 AND THE SAME IS OFFER ED IN INCOME OF AY 2011-12. THE LD. CIT(A) REFERRED THAT FOR CLAIMING THE DEDUC TION AS BAD DEBTS, THE ASSESSEE HAS SATISFIED TWO CONDITION; (I) AMOUNT CLAIMED AS BAD-DEBT WHICH HAS BEEN OFFERED IN INCOME IN CURRENT YEAR OR EARLIER YEAR ( II) THE AMOUNT IS ACTUALLY WRITTEN ITA NO.2627/M/201 SHRI HEMAL D. SHAH 3 OFF IN BOOKS. THE LD. CIT(A) FURTHER CONCLUDED THAT THE ASSESSEE HAS NOT FULFILLED THE CONDITION NO.1. THE ASSESSEE HAS NOT OFFERED IN THE INCOME IN ANY OF THE YEAR. THE ALTERNATIVE PLEA OF ASSESSEE WAS NOT EXAMINED B Y THE LD CIT(A) UNDER SECTION 37 OF THE ACT, HOLDING THAT SPECIFIC PROVISION WILL OVERRIDE THE GENERAL PROVISION. WE ARE UNABLE TO AGREE WITH HIS VIEW, SINCE SECTION 36(1)(III) AND SECTION 37 OPERATE IN DIFFERENT FIELD. THUS, WE ADMIT THE PLEA OF ASSESSEE TO CONSIDER THE ALLOWABILITY OF LOSS UNDER SECTION 37 OF THE ACT AN D RESTORE THE ISSUE TO THE FILE OF AO. THE AO SHALL EXAMINE THE ISSUE IN ACCORDANCE WI TH LAW AFTER GIVING THE OPPORTUNITY TO THE ASSESSEE. IN THE RESULT, THIS GR OUND OF APPEAL IS ALLOWED FOR STATISTICAL PURPOSE. 5. GROUND NO.2 RELATES TO TREATING THE GIFTS OF RS. 44 ,50,000/- FROM DINESH J SHAH HUF AS INCOME UNDER THE HEAD INCOME FROM OTHER SOU RCE UNDER SECTION 56(2) (VI). THE LD AR FOR THE ASSESSEE ARGUED THAT GROUND OF APPEAL WHICH RELATES TO GIFT FROM DINESH J SHAH HUF IS COVERED IN HIS FAVOU R BY THE DECISION OF RAJKOT TRIBUNAL IN VINNET KUMAR RAGHAVHIBHAI BHALODIA VS ITO (2011) 140 TTJ (RAJKOT). DINESH SHAH HUF CONSIST OF THE FATHER O F ASSESSEE (DINESH SHAH), MOTHER OF ASSESSEE(SMT JYOTSHNA D SHAH), BROTHER OF ASSESSEE (GAURAV D SHAH) AND ASSESSEE HIMSELF. AND AS PER THE DECISION IN V INNET KUMAR RAGHAVHIBHAI BHALODIA ( SUPRA) THE GIFT RECEIVED BY ASSESSEE, A MEMBER OF HUF, FROM HUF IS GIFT FROM RELATIVES AND THE SAME IS NOT TAXABLE. TH E LD AR FOR ASSESSEE FURTHER RELIED ON THE HYDRABAD TRIBUNAL IN ITO VS. DR. M. SHOBHA RAVHUVEERA ITA 47/HYD/13, HARSHADBHAI DAHYAL VAIDYA VS ITO (2013)T TJ (AHD) 71AND BIRAVELLI BASKER VS ITO ITA NO.398/HYD/2015. ON TH E OTHER HAND THE LD DR FOR THE REVENUE SUPPORTED THE ORDER OF THE AUTHORITIES BELOW. 6. WE HAVE CONSIDERED THE RIVAL CONTENTIONS OF THE PAR TIES AND HAVE GONE THROUGH THE ORDER OF THE AUTHORITIES BELOW. WE HAVE NOTICED THAT SIMILAR ISSUE WAS CONSIDERED BY THE DIFFERENT BENCHES OF TRIBUNAL. T HE HYDERABAD TRIBUNAL IN ITO VS. DR. M. SHOBHA RAVHUVEERA (SUPRA) WHILE CON SIDERING THE IDENTICAL GROUND AND RELYING ON THE DECISION OF AHMADABAD BEN CH IN HARSHABHAI DAHYALAL VAIDHYA (HUF) V/S. ITO (155 TTJ (AHD) 71) HOLD THAT HUF IS ITA NO.2627/M/201 SHRI HEMAL D. SHAH 4 NOTHING BUT THE GROUP OF RELATIVE. MERELY BECAUSE I T HAS GIVEN A LEGAL STATUS AS A HUF, THE INDIVIDUAL DO NOT LOSE THEIR IDENTITY AS R ELATIVE AND SUCH GROUP OF RELATIVE, WHO ARE MEMBER OF HUF CLEARLY FALLS WITHI N THE DEFINITION OF TERM RELATIVE AS PRESCRIBED IN THE EXPLANATION TO CLAU SE-5 OF SUB-SECTION 2 OF SECTION 56. THE CO-ORDINATE BENCH OF HYDERABAD TRIBUNAL REF ERRED THE RATIO OF HARSHABHAI DAHYALAL VAIDHYA (HUF) V/S. ITO (SUPRA) AS UNDER : 7.1 FOR THE YEAR UNDER CONSIDERATION, I.E. AY 2005 -06 THE DEFINITION OF 'RELATIVE' WAS IN RESPECT OF THE RELATIONSHIP BY AN INDIVIDUAL DONEE WITH CLOSE-RELATIVES AS DEFINED THEREIN. HOWEVER, IT IS VERY PERTINENT TO N OTE THAT THE OPERATIVE SECTION I.E. SECTION 56(2)(V) WAS IN RESPECT OF (I) INDIVIDUAL, AND (II) HINDU UNDIVIDED FAMILY (HUF). MEANING THEREBY THE LEGISLATURE HAS CLEAR IN TENTION TO INCLUDE BOTH THE STATUSES I.E. INDIVIDUAL AS WELL AS HUF WITHIN ITS SCOPE; AS WELL AS; WITHIN ITS OPERATION. THUS, THE SECTION IS APPLICABLE IN RESPE CT OF MONEY EXCEEDING RS.25,000/- RECEIVED WITHOUT CONSIDERATION EITHER BY AN 'INDIVI DUAL' OR BY A 'HUF'. NOW WE READ THE PROVISO ANNEXED TO SUB-SECTION (V) THAT TH E CHARGING CLAUSE SHALL NOT APPLY TO ANY SUM OF MONEY RECEIVED FROM ANY RELATIVE. MEA NING THEREBY THE PROVISO IS APPLICABLE TO BOTH OF THEM I.E. 'INDIVIDUAL' AS WEL L AS 'HUF'. THE DONORRELATIVE CAN BE EITHER RELATIVE OF 'INDIVIDUAL' OR 'HUF'; AS THE CASE MAY BE. IN OTHER WORDS, IF AN AMOUNT EXCEEDING RS.25,000/- IS RECEIVED AS A GIFT EITHER BY 'INDIVIDUAL' OR BY 'HUF', THEN SUCH AN AMOUNT IS CHARGEABLE TO INCOME UNDER THE HEAD 'INCOME FROM OTHER SOURCES' BUT AN EXCEPTION IS PROVIDED IN THE FIRST PROVISO THAT THE SAID CLAUSE OF CHARGING THE AMOUNT TO TAX SHOULD NOT APPLY TO AN A MOUNT RECEIVED FROM ANY RELATIVE. WE HEREBY THUS INTERPRET THAT THE PROVISO PRESCRIBE S THAT THE CHARGING OF THE GIFTED AMOUNT SHALL NOT APPLY TO ANY SUM OF MONEY RECEIVED AS A GIFT FROM A 'RELATIVE' EITHER BY AN 'INDIVIDUAL' OR BY 'HUF'. NATURALLY, THE PROV ISO ANNEXED TO CLAUSE (V) OF SECTION 56(2) DO NOT RESTRICT TO AN 'INDIVIDUAL' BU T IT GOVERNS 'INDIVIDUAL' AS WELL AS A 'HUF'. WITH THIS ITA NO.47/HYD/2013 DR. M.SHOBHA RA VHUVEERA, HYDERABAD 5 UNDERSTANDING/INTERPRETATION OF THE MAIN PROVISIONS , WE HAVE TO EXAMINE THE DEFINITION OF 'RELATIVE' GIVEN IN EXPLANATION ANNEX ED TO THIS SECTION. THE POSITION SHALL BE ABSOLUTELY CLEAR THAT EVEN IN CASE OF HUF IF A SUM OF MONEY IS RECEIVED FROM ANY RELATIVE AND THAT RELATIVE IS AS DEFINED IN EXP LANATION, THEN ALSO FALL WITHIN THE EXCEPTION AS PRESCRIBED IN THIS SECTION. 7.2. ON OUR STUDY, WE HAVE PONDERED UPON THE COMMEN TARY OF SAMPATH IYENGAR 'LAW OF INCOME TAX' 10TH EDITION PAGE 4611 AND THE COM MENTS ARE REPRODUCED BELOW:- 'EXPLANATION TO CLAUSE (V) THE EXPLANATION TO CLAUS E (V), WHICH DEFINES A RELATIVE, IS WIDE ENOUGH TO INCLUDE SPOUSE, BROTHER OR SISTER, T HEIR SPOUSES, BROTHER OR SISTER OF EITHER PARENTS OF THE INDIVIDUAL AND LINEAL ASCENDA NT OR DESCENDANT OF BOTH THE INDIVIDUAL AND HIS/HER SPOUSE AND THE SPOUSE OF ANY OF THE PERSONS MENTIONED HEREIN BEFORE. HENCE, THE DEFINITION COVERS ONLY RELATIVES OF THE INDIVIDUALS, SO THAT THE EXPLANATION SEEMS TO HAVE OVERLOOKED THE PROVISION IN THE MAIN SECTION SPARING LIABILITY FOR HINDU UNDIVIDED FAMILY (HUF) IN RESPE CT OF GIFTS FROM RELATIVES. EVEN THE OTHER EXEMPTION AS FOR OCCASION ON THE MARRIAGE OF INDIVIDUALS OR INHERITANCE COULD HAVE NOT APPLICATION TO THE HUF. IN THE CASE OF HUF, SINCE THE JOINT FAMILY ITA NO.2627/M/201 SHRI HEMAL D. SHAH 5 REFERS TO A GROUP OF PERSONS, IT EITHER MEANS THAT THE EXEMPTION IS AVAILABLE FOR GIFTS RECEIVED BY THE HUF FROM ANY PERSON RELATED TO THE KARTA OR ANY OTHER FAMILY MEMBER OR IT MAY MEAN THAT SINCE HUF CANNOT HAVE RE LATIVES, ALL THE GIFTS RECEIVED BY THE HUF WILL BE TAXABLE. THIS INFERENCE DOES NOT OBVIOUSLY FALL IN LINE WITH THE INTENT, BECAUSE THE PROVISION DOES CONTEMPLATE EXEM PTION OF THE GIFTS RECEIVED BY HUF, BUT HAS NOT INDICATED THE RELATIONSHIP THAT IS NECESSARY FOR THE PURPOSES OF HUF, BECAUSE THE DEFINITION OF RELATIVE IN THE EX PLANATION REFERS TO THE RELATIVES OF THE INDIVIDUAL AND NOT HUF, WITH THE RESULT THAT TH E EXEMPTION OF GIFT FROM RELATIVES IS ALIVE ONLY TO THE EXTENT OF POSSIBLE EXEMPTION FOR GIFTS BY WILL OR IN CONTEMPLATION OF DEATH.' 7.3. OUR ABOVE VIEW GETS SUPPORT FROM AN ORDER OF R ESPECTED RAJKOT BENCH PRONOUNCED IN THE CASE OF VINEETKUMAR RAGHAVJIBHAI BHALODIA VS. ITO REPORTED AT (2011) 140 TTJ (RAJKOT) 58. IN THAT CITED DECISION, AN INDIVIDUAL HAS RECEIVED A GIFT FROM HUF. THE AO WAS OF THE VIEW THAT THE HUF BEING NOT COVERED WITHIN THE DEFINITION OF 'RELATIVE', THEREFORE THE GIFT RECEIV ED BY THE INDIVIDUAL FROM THE HUF WAS TAXABLE. THE RESPECTED BENCH HAS COMMENTED THAT AS PER THE DEFINITION OF 'PERSON' DEFINED IN SECTION 2(31) INCLUDES 'HUF'. T HEREFORE A HUF IS DISTINCTLY ASSESSABLE TO TAX AS A PERSON UNDER THE IT ACT. THE BENCH HAS OBSERVED THAT, QUOTE 'THEREFORE, THE EXPRESSION 'HUF' MUST BE CONSTRUED IN THE SENSE IN WHICH IT IS UNDERSTOOD UNDER THE HINDU LAW AS HAS BEEN IN THE C ASE OF SURJIT LAL CHHABDA VS. CIT 1976 CTR (SC) 140: (1975) 101 ITR 776 (SC). ACT UALLY AN 'HUF' CONSTITUTES ALL PERSONS LINEALLY DESCENDED FROM A COMMON ANCESTOR A ND INCLUDES THEIR MOTHERS, WIVES OR WIDOWS AND UNMARRIED DAUGHTERS. ALL THESE PERSONS FALL IN THE DEFINITION OF 'RELATIVE' AS PROVIDED IN EXPLANATION TO CL.(VI) OF S. 56(2) OF THE ACT. THE OBSERVATION OF THE CIT(A) THAT HUF IS AS GOOD AS A BOI AND CA NNOT BE TERMED AS 'RELATIVE' IS NOT ACCEPTABLE. RATHER, AN HUF IS A GROUP OF RELAT IVES. NOW HAVING FOUND THAT AN HUF IS A GROUP OF RELATIVES, THE QUESTION NOW ARI SES AS TO WHETHER WOULD ONLY THE GIFT GIVEN BY THE INDIVIDUAL RELATIVE FROM THE HUF BE EXEMPT FROM TAXATION AND WOULD, IF A GIFT COLLECTIVELY GIVEN BY THE ITA NO.4 7/HYD/2013 DR. M.SHOBHA RAVHUVEERA, HYDERABAD 6 GROUP OF RELATIVES FROM T HE HUF NOT EXEMPT FROM TAXATION.' 7.4. THE RESPECTED CO-ORDINATE BENCH HAS ALSO EXAMI NED THE INTENTION OF THE LEGISLATURE AND THEREUPON MADE AN OBSERVATION THAT, QUOTE '11.2. FURTHER, FROM A PLAIN READING OF S. 56(2)(VI) ALONG WITH THE EXPLAN ATION TO THAT SECTION AND ON UNDERSTANDING THE INTENTION OF THE LEGISLATURE FROM THE SECTION, WE FIND THAT A GIFT RECEIVED FROM 'RELATIVE', IRRESPECTIVE OF WHETHER I T IS FROM AN INDIVIDUAL RELATIVE OR FROM A GROUP OF RELATIVES IS EXEMPT FROM TAX UNDER THE PROVISIONS OF S.56(2) (VI) OF THE ACT AS A GROUP OF RELATIVES ALSO FALLS WITHIN THE E XPLANATION TO S.56(2)(VI) OF THE ACT. IT IS NOT EXPRESSLY DEFINED IN THE EXPLANATION THAT THE WORD 'RELATIVE' REPRESENTS A SINGLE PERSON. AND IT IS NOT ALWAYS NECESSARY THAT SINGULAR REMAINS SINGULAR. SOMETIMES A SINGULAR CAN MEAN MORE THAN ONE, AS IN THE CASE BEFORE US. IN THE CASE BEFORE US THE ASSESSEE RECEIVED GIFT FROM HIS HUF. THE WORD 'HUF', THOUGH SOUNDS SINGULAR UNIT IN ITS FORM AND ASSESSED AS SUCH FOR INCOMETAX PURPOSES, FINALLY AT THE END A 'HUF' IS MADE UP OF 'A GROUP OF RELATIVES'. U NQUOTE. THE ABOVE OBSERVATION HAS BUTTRESSED OUR VIEW, HOWEVER, IN ADDITION TO TH E ABOVE OBSERVATION OF A COORDINATE BENCH, WE HAVE ALSO NOTED THAT AT SOME L ATER STAGE, THE LEGISLATURE BECAME CONSCIOUS OF THE PROBLEM, THEREFORE WHILE DR AFTING THE ANALOGOUS PROVISIONS ITA NO.2627/M/201 SHRI HEMAL D. SHAH 6 OF SECTION 56(2)(VII), IT WAS ADDED IN THE DEFINITI ON OF 'RELATIVE' (II) IN CASE OF A HINDU UNDIVIDED FAMILY, ANY MEMBER THEREOF. THIS SECTION IS INSERTED BY FINANCE (NO.2) ACT OF 2009 W.E.F. 1/10/2009 WHICH PRESCRIBES THAT WHERE AN INDIVIDUAL OR HUF RECEIVES IN ANY PREVIOUS YEAR ON OR AFTER 1ST DAY O F OCTOBER- 2009 ANY SUM OF MONEY WITHOUT CONSIDERATION EXCEEDING RS.50,000/- THE WHO LE OF THE AGGREGATE VALUE OF SUCH SUM SHALL BE CHARGEABLE TO INCOME-TAX. PROVIDED THA T THE CHARGING CLAUSE SHALL NOT TO APPLY TO ANY SUM OF MONEY RECEIVED FROM ANY RELATIV E. AS PER THIS NEWLY INSERTED CLAUSES, (A) 'RELATIVE' MEANS IN CASE OF HUF ANY 'M EMBER THEREOF'. ALTHOUGH THIS SUBSEQUENT CHANGE IN THE ACT DO NOT APPLY FOR THE Y EAR UNDER CONSIDERATION BEING INCORPORATED BY FINANCE ACT, 2009 BUT IT APPEARS TH AT BY INSERTION OF THESE WORDS HONBLE LEGISLATURES HAVE VISUALIZED THE DIFFICULTY , HENCE STREAMLINED THE PROVISIONS BY REMOVING THE DOUBT. WE THEREFORE HOLD THAT SINCE THE ASSESSEE-HUF HAS UNDISPUTEDLY RECEIVED A GIFT OF RS.7 LACS FROM A RE LATIVE WHO IS AN UNCLE OF THE KARTA OF THIS HUF, I.E.; AS PER EXPLANATION TO SUB-CLAUSE (IV); 'BROTHER OR SISTER OF EITHER OF THE PARENTS OF THE INDIVIDUAL', HENCE FALL WITHIN T HE CATEGORY OF THE 'RELATIVE' PRESCRIBED IN THE ACT, THEREFORE NOT CHARGEABLE TO TAX IN THE HANDS OF THE ASSESSEE. THUS THE GROUNDS RAISED ARE HEREBY ALLOWED. CONSIDERING THE DECISION OF COORDINATE BENCH OF TRI BUNAL AS REFERRED ABOVE, AND RESPECTFULLY FOLLOWING THE DECISION THE GROUND OF A PPEAL RAISED BY ASSESSEE IS ALLOWED. 7. GROUND NO.3 RELATES TO TREATMENT OF GIFT OF RS. 1 4,40,000/- FROM PANKAJ J SHAH HUF AS INCOME UNDER THE HEAD INCOME FROM OTHER SOU RCE UNDER SECTION 56(2)(VI). THE LD AR FOR THE ASSESSEE EXPLAINED TH AT PANKAK J SHAH HUF CONSIST OF PANKAJ J SHAH ( BROTHER OF ASSESSEES FATHER), M RS BHARTI P SHAH ( WIFE OF PANKAJ J SHAH) AND AMISH P SHAH ( SON OF PANKAJ J S HAH) AND MRS. BHARTI SHAH/ COUSIN OF ASSESSEE. HOWEVER, ON OUR INTERVENTION TH AT IF THERE IS ANY DECISION IN HIS FAVOUR ON THIS ISSUE, SINCE THE ASSESSEE IS NOT A MEMBER OF PANKAJ J SHAH HUF. THE LD AR FOR THE ASSESSEE FAIRLY CONCEDED THAT THI S GIFT RECEIVED FROM PANKAJ J SHAH HUF IN WHEREIN THE ASSESSEE IS NOT A MEMBER. AND SOME OF THE MEMBERS ARE NOT COVERED BY THE DEFINITION OF RELATIVES A S PRESCRIBED UNDER SECTION 56(2)(VI) OF THE ACT. CONSIDERING THE CONTENTION AN D FAIRNESS OF THE LD AR FOR THE ASSESSEE, WE DO NOT FIND MERIT IN THE GROUNDS OF AP PEAL RAISED BY THE ASSESSEE AND THE SAME IS DISMISSED. 8. IN THE RESULT THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ITA NO.2627/M/201 SHRI HEMAL D. SHAH 7 ORDER PRONOUNCED IN THE OPEN COURT ON THIS 8 TH DAY OF MARCH, 2017. SD/- SD/- (B.R. BASKARAN) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED 08/03/2017 S.K.PS COPY OF THE ORDER FORWARDED TO : BY ORDER, (ASSTT.REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY/