ITO Vs Shri Ashwin M. Savani (ITAT Mumbai)
Issue of gift of Indian Millennium Deposit certificate is not taxable in the hands of the assessee who received the same upon gift and also under the terms and conditions as stipulated in the Indian Millennium Deposit Certificate. It was provided that the said certificates can be gifted by NIR/banks only once to any person resident in India but the IMD bonds will be passed on to the donee including the gift for premature encashment. However, non resident only will be entitled to transfer the said IMD certificates. In the case of Shri Sarad Kumar Babulal Jain vs. Income Tax Officer the Coordinate Bench has held as under: –
“7. In the instant case, the assessee has received “IMD Bonds”. There cannot be any doubt that “IMD bonds” falls in the category of “Securities”. Hence the receipt of securities without adequate consideration, i.e. Gifts in kind, is subjected to tax, only if it is received only on or after 1.10.2009. In the instant case, the impugned IMD amount has been received by the assessee prior to 1.10.2009. Hence, the provisions of section 56(2)(v), which was invoked by Ld. CIT is not applicable to the impugned transaction. We notice that similar view has been expressed by Mumbai Bench of ITAT in the case of Anuj Agarwal, supra. Hence, the directions issued by Ld. CIT to tax the receipt of IMD Bonds u/s 56(2)(v) of the Act in the instant case do not have legal sanctity and accordingly the said direction is liable to be set aside. Accordingly, we set aside the impugned order of the Ld. CIT on this issue.”
Further we also perused various decisions relied upon by the assessee and find that the IMD bonds falls under the category of securities and therefore it does not fall within the meaning of any some of money.
