CA.(Dr.) Arun Ahuja

  Gift of Immovable Property which is not a Capital Asset, i.e., rural agricultural land As per the meaning of the term "property" given in Clause (d) of Explanation to section 56(2)(vii), immovable property means any land, or building, or both. In the aforesaid Explanation while defining the term "property" the word 'capital asset' has also been used. On this basis, it is being argued that, if any property is not in the nature of capital asset as defined in section 2(14), the same is not covered under the definition of property and therefore, provisions of section 56(2)(x) are not applicable. Example of such cases are agriculture land, stock-in-trade, assets of personal effects etc.   The issue had come up before ITAT Jaipur Bench in the case of ' ITO  v.  Trilok Chand Sain ' 14  in the context of agricultural land. It has been held by the Hon'ble Bench that definition of term capital asset in section 2(14) of the Act is not relevant for the pur...

Interest-free loans is Gift within meaning of section 56(2) or Not    Merely because the amount of the loan has been raised without involving payment of interest, it cannot be seen to have vested the impugned amount with characteristics of an income, within the meaning of section 56(2) of the Act. In the case of a loan, the promise to pay back the equivalent sum in the future shows the presence of consideration as defined in sec 2(d) of the Contract Act, 1872. This view has been supported by the Hon'ble Delhi High Court in CIT v. Mridu Hari Dalmia17. From the above, it can be interpreted that a loan has a two-way traffic and gift has only one traffic. This view is also supported in CIT v. Saran Pal Singh (HUF)18 as well.