Bonus Shares cannot be taxed under section 56(2)(vii)(c )

DCIT Vs Aruna Chandhok (ITAT Delhi) Introduction In a groundbreaking case between DCIT (Deputy Commissioner of Income Tax) and Aruna Chandhok, the ITAT (Income Tax Appellate Tribunal) in Delhi ruled that no income tax is payable on bonus shares under the head ‘Income from Other Sources.’ The judgment, delivered on September 5, 2023, provides a detailed exposition of the legal reasoning behind such an important decision. The Background Aruna Chandhok, the assessee, received bonus shares and bonus units from M/s Tech Mahindra Ltd and JM Arbitrage Advantage Fund-Bonus Options. The Ass...