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Informative

Section 56 (2)(vii) not Applicable to Non-Resident: ITAT deletes Income Tax Addition of Rs. 9.31 Cr

Update / Judgement Date

07 Jul 2024

Source

Taxscan

Author

Team — WCP Legal Desk

Reading Time

1 min read

Income TaxInternational Taxation

The Income Tax Appellate Tribunal (ITAT) ruled that Section 56(2)(vii) of the Income Tax Act, which deals with taxation of gifts, does not apply to non-residents receiving shares at a premium. ITAT reversed the addition of Rs. 9.31 crore to the income of a Singapore-based company, citing that the transaction was not taxable under Indian tax laws. The decision highlights the importance of understanding residency status and tax implications under Section 56(2)(vii) for non-residents.