Section 56(2)(viia) prevents laundering of unaccounted income under the garb of gifts

Vora Financial Services P. Ltd Vs. ACIT (ITAT Mumbai) The provisions of section 56(2) (vii) were introduced as a counter evasion mechanism to prevent laundering of unaccounted income under the garb of gifts‘ particularly after abolition of the Gift Tax Act. The provisions were intended to extend the tax net to such transactions in kind. The intent is not to tax the transactions entered into in the normal course of business or trade‘ the profits of which are taxable under specific head of income. It is‘ therefore, proposed to amend the definition of property so as to provi...