On the basis of information was received that a property was gifted to the assessee by his uncle, namely, Harish Kumar who was brother of father of the assessee. According to the Assessing Officer, a nephew was not a relative within a meaning of explanation (e) to proviso to section 56(2)(vii), the said gift would be taxable in the hands of the assessee done. On the basis of same, a reopening notice was issued upon the assessee. On writ the Court held that from the plain language of Explanation (e) to proviso to section 56(2)(vii) that a relative would also include a brother or sister of either of the parents of the individual. In this case, the donor is the brother of the petitioner”s father and therefore, is covered under the said clause. The fact that the word ”nephew” has not been mentioned cannot be a reason for proceeding on the basis that uncle or nephew are not relatives within the meaning of Explanation (e) to proviso to section 56(2)(vii). Notice and order is set aside. (AY. 2018-19)
Sumeet Kawatra v. ITO (2024) 301 Taxman 488/341 CTR 697 / 243 DTR 257 (Delhi)(HC)
S. 148A : Reassessment-Conducting inquiry, providing opportunity before issue of notice-Income from other sources-Gift of property from uncle-Nephew-Relative-Explanation (e) to proviso to section 56(2)(vii) provides that a relative would also include a brother or sister of either of parents of individual-Word ‘nephew’ has not been mentioned cannot be a reason for proceeding on basis that uncle or nephew are not relatives within meaning of Explanation (e) to proviso to section 56(2)(vii)-Reassessment notice is quashed. [S. 56(2)(vii), 148, 148A(b) 148Ad),149(1)(b), Art. 226]