Rabin Arup Mukerjea Vs ITO (ITAT Mumbai)
Assessee received a property as a gift from his stepsister by way of registered gift deed. According to the AO, the donor & donee were not relatives as per the meaning contained in Section 56(2). AO held that he had reason to believe that receipt of property without consideration is chargeable to tax on the basis of the Hon’ble Family Court’s finding that the donor & donee were born out of different wedlocks & they cannot be treated as biological brother & sister. As per section 56(2), “relative” definition covers only brother & sister & nowhere in the section refers stepbrother & stepsister to form part of relative. The relationship between donor and asessee is as follows:
AO’s reason for reopening is that receipt of immovable property without consideration also contained expenditure incidental to such receipt of gift i.e, stamp duty & registration fees which is ought to have been paid by the assessee. Such incidental costs have also escaped assessment within the meaning of section 147. AO has referred to various acts to define various relatives & held that stepbrother & stepsister cannot be held as relatives. In sum & substance, assessee’s objection based on various proposition by law was that stepbrother & stepsister are related & are covered as per “relative” definition u/s 56.
