INCOME TAX ACT, 1961

Section 148

Reassessment - Addition under section 56(2)(v) - Gifts received by assessee from HUF interpreted as the gift from the relatives -

AO reopened the assessment under section 147 by issue of notice under section 148 for escapement of income in respect of gifts received by assessee from HUF. AO called for explanation as to why the gifts received from HUF should not be brought to tax under section 56(2)(vi). Assessee objected for proposed addition stating that section 56 has no application to transaction for withdrawals made from HUF. Assessee being member in HUF, argued that assessee was permitted to withdraw amounts from HUF, the same should neither be treated as gift nor to be brought to tax under section 56(2)(vi). AO found that Karta of HUF is neither permitted to gift nor alienate the property as the HUF is treated as separate entity for the purpose of assessment. Therefore, gift received by the assessee from HUF was taxable under section 56(2)(vi). Held: There was no failure on the part of the assessee and no fresh information was received by AO for reopening the assessment. The information was already made available in the assessment, hence, reopening the assessment on the same issue which was already considered by AO and taken a view amounts to difference of opinion and on difference of opinion, reopening of assessment is not permissible. In the absence of production of reasons, no reasons were recorded by AO for reopening the assessment. Since reopening of assessment was not permissible on difference of opinion and the fact that the department failed to furnish the reasons recorded for reopening the assessment, issue of notice under section 148 was bad in law and the same was quashed.

Relied:Vineetkumar Raghavjibhai Bhalodia v. Income Tax Officer (2011) 140 TTJ 58 (Rjk-Trib) : 2011 TaxPub(DT) 1022 (Rjk-Trib)

REFERRED :

FAVOUR : In assessee's favour

A.Y. : 2009-10

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