On December 31, 2018, the Indian Central Board of Direct Taxes
("CBDT") had issued a circular ("Circular 1")
providing interpretation of the term 'receives' in section
56(2)(viia) of the Income Tax Act, 1961 ("ITA").
Subsequently, on January 4, 2019 the CBDT through another circular
rescinded Circular 1 ("Circular 2") on the ground that
the term 'receives' is subjudice in higher juridical
forums. Following this, on January 21, 2019, the CBDT issued
another circular ("Circular 3") stating that the Circular
1 shall not be taken into account by any income-tax authority in
any proceeding under the ITA. Considering the above developments,
it becomes important to analyse what has transpired for issuance of
these three circulars in such dramatic fashion.
