Case Law Details
Samta Kamal Drolia Vs ITO (ITAT Ahmedabad)
Assessee has received Rs. 2.20 Lakh from His Step Father and contended that he received the amounts in gift. The ld.AR has rejected the explanation of the assessee on the ground that the assessee is step-son of Donor, therefore, their relationship does not fall within the ambit of relationship explained in Explanation appended to Section 56(2). Appeal to the CIT(A) did not bring any relief to the assessee.
Assessee submitted that the expression “relative” has been explained in the Explanation appended to Section 56(2) of the Income Tax Act. As per the meaning given at serial no.(v), (vi) and (vii), it emerges out that any lineal ascendant or descendant of the individual will be entitled to receive gift. He pointed out that the assessee is an individual. His step-father is the spouse of his mother, and therefore, their relationship shall be within the meaning of “relative” given at serial no.(v), (vi) and (vii) and therefore, entitled for the exemption applicable in the present case.
On the other hand, the ld.DR relied on the order of the ld.CIT(A) and contended that this aspect has been considered by the ld.CIT(A) and it has been rightly stated that step-son does not fall within the ambit of relative.
ITAT held that a bare perusal of section 56(2) and the Explanation appended thereto would indicate that the expression “relatives” would recognize the relationship between the step-father and step-son for the purpose of exemption available under section 56(2) of the Income Tax Act. Therefore, the gift received by the assessee cannot be treated as income from other sources, and the same is deleted and the appeal of the assessee is allowed.
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