Case Law Details
DCIT Vs Smt Aruna Chandhok (ITAT Delhi)
Introduction: The Income Tax Appellate Tribunal (ITAT) Delhi recently delivered a significant verdict in the case of DCIT vs. Smt Aruna Chandhok concerning the taxation of bonus shares under Section 56(2)(vii)(c) of the Income Tax Act, 1961. The central question was whether the issuance of bonus shares amounts to a transfer of property attracting taxation.
Detailed Analysis:
1. Background of the Case: The case pertains to the assessment year 2015-16 and originates from the order of the Commissioner of Income Tax (Appeals) [CIT(A)] in response to an assessment order under Section 143(3) of the Income Tax Act, 1961. The core issue revolved around the taxability of bonus shares received by the assessee.
2. Grounds of Appeal Raised by the Revenue: The revenue presented two primary grounds of appeal challenging the CIT(A)’s decision. These grounds questioned whether the CIT(A) was justified in deleting the addition made under Section 56(2)(vii)(c) of the Act for bonus shares received and whether the provisions of Section 56(2)(vii) of the Act applied to bonus shares.
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