A division bench of Mumbai ITAT including Judicial Member C.N. Prasad and Accountant Member Rajesh Kumar, recently held that ‘ IMD Bonds ’ can be treated as Securities and therefore it does not fall within the meaning of any some of the money.
In the instant case, Assessee had received two Indian millennium deposit bonds as the gift and the same was confirmed by state bank of India through a letter. The same will matured and the value along interest will be kept as fixed deposit. After verifying the FDR assessing officer added the increase to the income of the assessee under section 69 of the act because of not furnishing of details and evidence during assessment proceedings.
The matter travelled to the ITAT and set-aside the same to the file of CIT (A) and the matter is again on the appeal. However, CIT (A) after considering the genuineness of the transaction by verifying the identification of donor, letter from SBI and the remittance of the bond deleted the addition of principal amount and interest.
Aggrieved, the revenue approached the ITAT again opposing the statement of the assessee and contended that identity of the person who gifted the money is not adequately established and moreover the assessee is not in blood relation of the donor.
Finally, the bench after hearing all the contentions held that bond gifted as IMD is not taxable in the hands of the assessee who received the same upon gift and under the terms and conditions as stipulated in the Indian Millennium Deposit Certificate.
The bench also added that such certificate can be gifted by NRI or bank at a time only to a person who is resident to India and the IMD bonds fall under the category of securities, it does not fall within the meaning of any some of the money.To Read the full text of the Order CLICK HERE