Amount received on execution of a will of deceased relative cannot be considered as income

It is apparent that the assessee received the said sum of Rs. 1,05,00,000/- as inheritance from her father. This would become clear from the fact that late Sh. A P Bajaj had clearly indicated in his Will that in case the property is sold, 30% of the sale proceeds would be given to the assessee. The fact that the property was agreed to be sold during the lifetime of the father and some part consideration had been received during the lifetime would only imply that the condition upon which the assessee was to receive the said 30% of the sale consideration had already been satisfied during his lifetime. In other words, the assessee’s share out of the said consideration became payable to her directly under the will on the death of the father. Even if we look at the matter in this perspective the receipt in the hands of the assessee cannot be regarded as income. However, the Tribunal has taken a different approach by holding that even if it is regarded as income the assessee would be entitled to the benefit of income under Section 56(2)(v) of the Income Tax Act, 1961. Either way we look at the issue, the answer is the same. Therefore, insofar as this aspect of the matter is concerned no interference with the order of the Tribunal is called for.

 HIGH COURT OF DELHI

Judgment delivered on: 22.03.2013

ITA 162/2013

COMMISSIONER OF INCOME TAX

versus

NEERA BHANDARI

JUDGMENT