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Facts
The assessee filed an appeal with a delay of 229 days, attributing the delay to a severe medical condition (Acoustic Schwannoma). Substantively, the appeal challenges the addition of ₹3,00,000/- to his income, representing gifts received from cousins, which the Assessing Officer treated as income from other sources under Section 56(2)(vii) as cousins are not defined as 'relatives' under the Act.
Held
The tribunal condoned the delay in filing the appeal, accepting the medical grounds presented by the assessee. However, on the substantive issue, it held that the definition of 'relative' in Section 56(2)(vii) is exhaustive and does not include cousins, thus confirming the addition of the gifts to the assessee's income from other sources.
Key Issues
1. Whether the delay in filing the appeal should be condoned due to the assessee's medical condition. 2. Whether gifts received from cousins are covered under the definition of 'relative' in Section 56(2)(vii) of the Income Tax Act.
Sections Cited
147, 263, 56, 56(2)(vii)
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आयकर अपील�य अ�धकरण, च�डीगढ़ �यायपीठ, च�डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH, ‘SMC’, CHANDIGARH BEFORE SHRI LALIET KUMAR, JUDICIAL MEMBER आयकर अपील सं./ �नधा�रण वष� / Assessment Year : 2010-11 Gurmeet Singh, ITO, बनाम 939, Type II, Ward 2(2), Nuhon Colony Ghanauli, Ropar Vs. Rupnagar 140113 �थायी लेखा सं./PAN NO: AGEPS7897P अपीलाथ�/Appellant ��यथ�/Respondent ( Virtual Hearing ) �नधा�रती क� ओर से/Assessee by : Shri. Parikshit Aggarwal, CA राज�व क� ओर से/ Revenue by : Smt. Surinder Kaur Waraich, Addl. CIT, Sr. DR सुनवाई क� तार�ख/Date of Hearing : 27-08-2025 उदघोषणा क� तार�ख/Date of Pronouncement : 27-08-2025 आदेश/Order
This appeal by the assessee is directed against the order of the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, dated 04.07.2024, for the assessment year 2010-11.
The Registry has pointed out that there was a delay of 245 days in filing of the appeal. During the proceedings before us, the ld. Counsel for the Assessee has submitted an application for condonation of delay along with an Affidavit, which is reproduced as under:-
I have considered the reasoning given in the affidavit and inclined to condone the delay.
The ld. DR did not have any objection for this condonation of delay.
The facts in brief are that the assessee filed his return of income declaring income of ₹3,36,320/-. The assessment was reopened under section 147 r.w.s. 263 of the Income Tax Act, 1961. It was found during assessment proceedings that the assessee had received gifts aggregating to ₹11,15,000/-, out of which ₹1,00,000/- each was received from three cousins namely, Shri Baldev Singh, Shri Jaswinder Singh and Shri Nirmal Singh. The Assessing Officer held that these persons do not fall within the definition of “relative” as given in section 56(2)(vii) of the Act. Consequently, the amount of ₹3,00,000/- was treated as income from other sources and added to the total income.
In appeal, the Ld. CIT(A) confirmed the said addition, holding that gifts received from cousins are not covered under the definition of “relative” prescribed in section 56 of the Act.
Before me, Shri Aggarwal, the Ld. Authorised Representative for the assessee, appeared and fairly submitted that the assessee is an agriculturist by occupation and was not aware about the scope and limits of the definition of “relative” provided under the Act. It was pleaded that under a bona fide though mistaken belief, the assessee had accepted financial help from his cousins in the nature of gifts/loans for the purpose of sending his son abroad for studies. It was further urged that the assessee had no intention to evade tax and acted under ignorance of the technical definition provided in section 56.
The Ld. Departmental Representative, on the other hand, strongly relied upon the orders of the lower authorities and submitted that the statute has provided an exhaustive definition of “relative” in section 56(2)(vii) and cousins are not included therein. Hence, the addition has rightly been made and sustained.
I have considered the rival submissions and perused the record. The statutory definition of “relative” as given in section 56(2)(vii) is exhaustive and restricts the scope of exemption to specified categories only. The legislature in its wisdom has not included cousins within the ambit of “relative”. Hence, the contention of the assessee, though arising from ignorance, cannot override the express provisions of law. The gifts received from cousins amounting to ₹3,00,000/- fall squarely within the mischief of section 56(2)(vii) and are rightly brought to tax as income from other sources.
In the light of the above discussion, I find no infirmity in the order of the Ld. CIT(A) confirming the addition. The appeal of the assessee therefore fails.
In the result, the appeal of the assessee is dismissed.
Order pronounced on 27.08.2025.