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May 2025

S. 56–Gift received by step-brother from his step-sister is exempt under section 56(2) since the term “relative” includes brother and sister by way of affinity.

By Jagdish T Punjabi, Chartered Accountant
Devendra Jain & Aditya Bhatt, Advocates
Reading Time 4 mins

11. (2025) 172 taxmann.com 855(Mum Trib)

Rabin Arup Mukerjea vs. ITO

ITA No.: 5884 (Mum) of 202

A.Y.: 2016-17 Dated: 21st March, 2025

S. 56–Gift received by step-brother from his step-sister is exempt under section 56(2) since the term “relative” includes brother and sister by way of affinity.

FACTS

The assessee, Mr. “R”, is an individual and non-resident Indian. He received a property located at Worli, Mumbai in 2016 as gift from Ms. “V”, his step-sister, by way of a registered gift deed wherein Ms. “V” had been referred to as “donor” and “sister”, and Mr. “R” had been referred as “donee” and “brother”.

Subsequently, Mr. “R” decided to sell the property and applied for certificate under section 197for lower rate of TDS. On the basis of this information, the AO issued notice under section 148 for AY 2016-17 on the ground that step-brother and step-sister cannot be treated as “brother and sister of the individual” under clause (e) of Explanation to section 56(2)(vii). Accordingly, he added ₹7.50 crores (being stamp value of the prope

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