Section 56(2)(x) not attracted to trust created for benefit of members/relative of settler identified as beneficiaries

ITO Vs Aam Family Private Trust (ITAT Mumbai)

ITAT Mumbai held that provisions contained in section 56(2)(x) of the Income Tax Act are not attracted in case of the trust created for the benefit of the members / relatives of the settler who have been identified as beneficiaries.

Facts- The assessee is a private discretionary trust created by registered trust deed dated 22/12/2017 has filed its return of income which was subjected to scrutiny. The Assessing Officer framed the assessment under section 143(3) read with sections 143(3A) & 143(3B) of the Act at the total income of Rs.9,04,96,847/- by treating the entire value of movable assets (value of equity shares) settled by the settler of the trust, namely, Smt. Archana Miglani in favour of the trust, i.e. trust fund and being income under section 56(2)(x) of the Act.

Assessee carried the matter before Ld.CIT(A) by way of filing appeal, who has partly allowed the same. Feeling aggrieved with the impugned order passed by Ld.CIT(A), the Revenue has come up before the Tribunal by way of filing the present appeal.

Conclusion- Held that provisions contained in section 56(2)(x) of the Act are not attracted in case of the trust created for the benefit of the members / relatives of the settler who have been identified as beneficiaries.

Please become a Premium member. If you are already a Premium member, login here to access the full content.