Court Rules Gift from Uncle Non-Taxable; Sets Aside Tax Assessment Under Income Tax Act Section 56(2)(vii.

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....The case pertains to the reopening of assessment and addition u/s 56(2)(vii) of the Act regarding the receipt of immovable property as a gift by the petitioner from the brother of the petitioner's father. The assessing officer considered that a nephew is not a relative within the meaning of explanation (e) to the proviso to Section 56(2)(vii), rendering the gift taxable. The High Court held that the plain language of explanation (e) covers a brother or sister of either of the parents as a relative. Since the donor is the brother of the petitioner's father, he is covered under the said clause. The mere non-mention of the word 'nephew' cannot exclude uncles or nephews from the definition of relatives under explanation (e). Consequently, the impugned order and notice were set aside.....