Rajinder Mohan Lal V. Deputy Commissioner of Income-Tax Circle-1(I), Chandigarh

ITA/224/2012

AI Insights

The case involves Rajinder Mohan Lal, the appellant, who challenged the order of the Income Tax Appellate Tribunal, Chandigarh, which dismissed his appeal regarding the taxability of gifts received on the occasion of his daughter's marriage. The primary legal question was whether the gifts received on his daughter's marriage should be exempted under Section 56(2)(vi) of the Income Tax Act, 1961, which exempts gifts received on the marriage of an 'individual'. The Tribunal and the High Court both interpreted 'individual' to mean the person getting married, not their children, leading to the dismissal of the appeal.

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 676516 (HC-CHANDIGARH)
• Appeal Type: Others
• Pronouncement Date: 01-08-2013
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: URVASHI DUGGA
• Assessee Lawyers: SANDEEP GOYAL
• Keywords: Assessment Year 2007-08; Gifts; Income from other sources; Income Tax; Marriage
• Section: 143(3); 56(2)(vi)

Judgement Text

"Income-Tax Appeal No. 224 of 2012 (O&M) 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. Income-Tax Appeal No. 224 of 2012 (O&M) Date of Decision: 01.08.2013 Rajinder Mohan Lal ..Appellant Versus Deputy Commissioner of Income-Tax Circle-1(I), Chandigarh ..Respondent CORAM: HON'BLE MR. JUSTICE RAJIVE BHALLA HON'BLE MR. JUSTICE DR. BHARAT BHUSHAN PARSOON Present: Mr. Sandeep Goyal, Advocate, for the appellant Mr. Urvashi Dugga, Advocate, for the respondent. CM No. 24587-CII of 2012 Prayer in this application is to condone the delay of 26 days in re-filing the appeal. Heard. For reasons stated in the application and arguments addressed, application is allowed and delay of 26 days in refiling the appeal is condoned. Income-Tax Appeal No. 224 of 2012 The appellant challenges order dated 04.1.2012 passed by the Income Tax Appellate Tribunal, Chandigarh Bench-B, Chandigarh, dismissing his appeal by raising the following substantial questions of law:- “ Whether on the facts and circumstances of the case, the Ld. Tribunal was justified in holding that the clause (b) Varinder Kumar 2013.08.24 14:51 I attest to the accuracy and integrity of this document High Court Chandigarh Income-Tax Appeal No. 224 of 2012 (O&M) 2 of proviso to sub-clause (vi) to sub-section (2) of section 56 would apply to the gifts received on occasion of the marriage of the assessee and not on the gifts received on account of marriage of his daughter?” The appellant, an individual assessee, filed a return, for the assessment year 2007-08, showing a gross total income of Rs.16,71,877/-. The appellant's case was taken up for scrutiny under Section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as the “Act”) by raising an objection with respect to Rs.21,07,513/- allegedly received as gifts from relatives and friends on the occasion of his daughter's marriage. In response, the assessee, produced evidence, confirming receipt of `shagun' and `gifts' from relatives and friends. The Assessing Officer, however, ordered an addition of Rs.21,07,513/- to the income of the assessee by holding that Section 56(2)(vi) of the Act, does not permit gifts received on account of an assessee's daughter wedding to be computed as “income from other sources”. Aggrieved by this order, the assessee filed an appeal, which was dismissed by the Commissioner of Income Tax (Appeals) on 19.1.2011. A further appeal filed before the Income Tax Appellate Tribunal (for short the “Tribunal”), was dismissed on 04.1.2012. Counsel for the appellant submits that clause (b) of the proviso to sub-clause (vi) to sub-section (2) of Section 56 of the Act, provides that gifts received in excess of Rs.50,000/- are to be treated as income, except where gifts are received on the marriage of an individual. The word “individual” has to be interpreted, to Varinder Kumar 2013.08.24 14:51 I attest to the accuracy and integrity of this document High Court Chandigarh Income-Tax Appeal No. 224 of 2012 (O&M) 3 include gifts received on the marriage of an assessee's children. It is further submitted that in Indian society, parents receive gifts from relatives and friends on the occasion of marriage of their children. The view taken by the Tribunal that gifts received at the time of marriage of the assessee's daughter do not fall within meaning of word “individual”, should be set aside and the word “individual” may be interpreted to include gifts received on the occasion of marriage of an assessee's child. Counsel for the respondent submits that the exemption clause operates only with respect to marriage of an individual and not to the marriage of an individual's children. While interpreting the word “individual”, the Tribunal has rightly held that gifts received at the marriage of the appellant's daughter, are not exempted. We have heard counsel for the parties, perused the impugned orders and have no hesitation in holding that there is no ambiguity in proviso (b) to Section 56(2)(vi) of the Act and as no question of law arises for adjudication, the appeal must fail. The proviso (b) to Section 56 (2)(vi) reads as follows:- “Provided that this clause shall not apply to any sum of money received— (a) from any relative; or (b) on the occasion of the marriage of the individual; or (c) under a will or by way of inheritance; or (d) in contemplation of death of the payer; or (e) from any local authority as defined in the Explanation to clause (20) of section 10; Varinder Kumar 2013.08.24 14:51 I attest to the accuracy and integrity of this document High Court Chandigarh Income-Tax Appeal No. 224 of 2012 (O&M) 4 The expression “individual” appearing in proviso (b) of Section 56(2)(vi) of the Act, is preceded by the words “marriage” and therefore, relates to the marriage of the individual concerned, i.e., the assessee and not to the marriage of any other person related to him in whatsoever degree, whether as his daughter or son. The expression “marriage of the individual” is unambiguous in its intent and does not admit to an interpretation, that it would include an amount received on the marriage of a daughter. If legislature had intended that gifts received on the occasion of marriage of the assessee's children should be exempted, nothing prevented Legislature from adding the words “or his children”, after the words “marriage of the individual”. In view of unambiguous legislative intent, appearing in the proviso, the addition made to the appellant's income on account of gifts received on the occasion of his daughter's marriage, is affirmed and the appeal, consequently, dismissed. ( RAJIVE BHALLA ) JUDGE 01.08.2013 ( DR. BHARAT BHUSHAN PARSOON ) VK JUDGE Varinder Kumar 2013.08.24 14:51 I attest to the accuracy and integrity of this document High Court Chandigarh "