By C. N. Vaze, Shailesh Kamdar, Chartered Accountants
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32 (2007) 18 SOT 362 (Delhi)
ITO v. Sunil Mittal
ITA No. 4350 (Delhi) of 2004
A.Y. 2001-02. Dated : 28-9-2007
S. 28(iv) of the Income-tax Act, 1961 — Gift received in
return for help rendered to a person on various occasions is not income within
the meaning of S. 28(iv).
During the year, the assessee received a gift of Rs.6 lacs
from a person whom he had helped on various occasions. The donor confirmed the
gift and the reason for giving the gift. The Assessing Officer, however, held
that gift was received during the course of the assessee’s business and,
accordingly, treated the same as income u/s.28(iv). The CIT(A) treated the gift
as genuine and deleted the addition made by the Assessing Officer.
The Tribunal held that the gift received by the assessee was
not income u/s.28(iv). The Tribunal observed as under :
(1) It was an accepted fact that the addition was not made
u/s.68 as unexplained cash credit. It was also accepted that the identity and
creditworthiness of the party were established and the transaction was
genuine.
(2) As per S. 28(iv), the value of any benefit or
perquisite, whether convertible into money or not, arising from the business
or the exercise of a profession, shall be treated as income chargeable to
income-tax under the head ‘Profits and gains of business or profession’.
(3) The amount was received by cheque and was not in any
intangible form in the nature of benefit or perquisite. The amount was not
received in kind. Thus, it could not be treated as benefit or perquisite.
(4) The assessee helped the donor on various occasions.
Thus, it was not in the course of carrying on the assessee’s business that any
benefit or perquisite was received.
Therefore, the gift amount was outside the scope of income in
terms of S. 28(iv).
