CIT-I CHANDIGARH vs. SARANPAL SINGH

ITA/294/2010HC Punjab & HaryanaPHHC01093212201006 October 2010Author: MR. JUSTICE ADARSH KUMAR GOEL,MR. JUSTICE AJAY KUMAR MITTAL4 pages
AI SummaryDismissed

What were the facts?

The assessee is Saranapal Singh, HUF, and the revenue is the Commissioner of Income Tax-I, Chandigarh. The assessment year in question is 2006-07. The appeal is filed by the revenue against an order dated 9.9.2009 of the Income Tax Appellate Tribunal (ITAT), Chandigarh Bench, which upheld the order of the CIT(A), Chandigarh. The Assessing Officer had made an addition to the returned income on account of an amount received as a loan, treating it as a receipt within the meaning of Section 56(2)(v) of the Income Tax Act, 1961. The CIT(A) set aside this addition, and the Tribunal affirmed the CIT(A)'s decision.

What did the High Court hold?

The High Court held that the submission of the revenue is not acceptable. The amount contemplated under Section 56(2)(v) of the Act cannot include a loan that has been shown to have been repaid. In the present case, there is a concurrent finding of fact that the amount received was a short-term loan which was duly repaid. Therefore, this amount cannot be treated as income of the assessee under Section 56(2)(v) of the Act. Consequently, no substantial question of law arises. The appeal is dismissed.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the ITAT erred in affirming the order of the CIT(A) by holding that the intention of Section 56(2)(v) is to tax cases of bogus gifts, when the section does not use the word 'gift'? (Question of law turning on Section 56(2)(v)). Assessee's contentions: Not recorded in the judgment. Revenue's contentions: The scope of Section 56(2)(v) is very wide and includes any amount received by the assessee unless covered by the proviso.

Which sections of the Income-tax Act were involved?

Section 56(2)(v),Section 260A

AI-generated summary — verify with the full judgment below

Income-tax Appeal No. 294

of 2010

-1- *** IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Income-tax Appeal No.294

of 2010

Date of decision: 6.10.2010 The Commissioner of Income Tax-I, Chandigarh ...Appellant Versus Saranapal Singh, HUF ...Respondent CORAM: HON'BLE MR.JUSTICE ADARSH KUMAR GOEL HON'BLE MR.JUSTICE AJAY KUMAR MITTAL Present: Ms. Urvashi Dhugga, Advocate for the appellant. Mr. Ravi Shanker, Advocate for the respondent. **** ADARSH KUMAR GOEL, J (

Oral)

.

1.

This appeal has been preferred under Section 260A of Income Tax Act, 1961 (hereinafter referred to as 'the Act”) proposing following substantial question of law arising out of order dated 9.9.2009 of the Income Tax Appellate Tribunal, Chandigarh Bench 'B', Chandigarh (hereinafter referred to as “the Tribunal”) passed in ITA No.892/Chandi/2009 in respect of assessment year 2006-07:- “Whether, on the facts and in the circumstances of the case, the Hon'ble ITAT has erred in affirming the order of the CIT (A) Chandigarh in view of the decision of Hon'ble ITAT, Mumbai Bench in the case of Chander Kant H. Shah, 19 DTR 241 (Mum) by holding that the intention o

The order continues below.

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