Clarification for meaning , Income Tax

[DEV KUMAR KOTHARI]

For brain storming - Relative in context of S. 56: If A is related to B then B should be condsidered as related to A. In other words a relationship is based on reciprocity. However, in S. 56 such reciprocity is not clear regarding some relations. For example there is reciprocity between spouse, brother and sister, brother or sister of the spouse of the indiidual, lineal ascendents or discendent of individual or spouse. However, brother or sister of either of parent is related that is Chacha, Bhua, mama and masi are related but bhatija / bhatiji/ bhanja / bhanji may not be considered as relative becasue they are not lineal descendent. Reciprocity should be presumed. For example when Chacha ( brother of father) is realtive of Bhatija then it cannot be that Bhaitija is not related to Chacha. A clarity is desirable.

Posts / Replies

[Surender Gupta]

Your observations are correct. As per the scheme of IT, the relatives are considered with respect to assessee. As per the example in the query Chacha with respect to an Individual is different person than Bhatiza. An individual is likely to get gifts and support from Chacha. To clarify this, if we see the definition of relatives under section 56, except the lineal ascendant or descendant of the Individual / spouse (and with sister, brother and spouse) none of the relative is younger than such Individual. Thus, I feel that for the purpose of section 56 the legislature assumed that Chacha is likely to give gifts to Bhatija and therefore should be exempt. But bhatija is not likely to give gifts to Chacha and should not be exempt.

[DEV KUMAR KOTHARI]

A cannot be related to B unless B is related to A. Therefore, in relationships reciprocal relations are natural and presumed. A natural ralation cannot be ignored even under law. Therefore, it can be said that when uncle and aunt are relative of nephew and neice, then nephew and neice are also related to undcle and aunt. Therefore, nephew and neice can also make gift to uncle and aunt without attractng S.56. Let us take another aspect , if a younger person say son can gift to father, grand father, great grand father, why he cannot gift to brother or sister of father or mother as they are also relative in antural way and relationship with them cannot be one way. With reference to reply of Shri Surendra Gupta, I feel that during childhood, elders support and also make gift to youngers, and at old age youngers support to and gift to elders as respect and natural love and affection as well as some times to support. The capacity to gift is important and not the age of the donor. A clarification as to reciprocal aspect need to be incorporated in the definition of relative for s. 56. The provisions of S. 56 (2) (vi) and (vii) appears to be ultravirse the constitution. Just by amending definition of income any thing is not permissibele to be regarded as 'income'.