INCOME TAX ACT, 1961

Section 56(2)(vii)

Income from other sources - Applicability of section 56(2)(vii) - Addition on account of amount received by the assessee as a legacy through the Will -

Assessee had received a bequeathal through the Will of her God-Mother. It was a submission that assessee had received the amount by way of Will and AO in the course of assessment held that as per the provisions of section 56(2)(vii) read with the Proviso thereunder was to be interpreted that beneficiary has to be related within the meaning of explanation (e) to be a 'relative' and not otherwise. As God-mother, who had bequeathed the amount to the assessee, was not a relative, AO treated the said amount received by the assessee as income from other sources.Held: A perusal of provisions of section 56(2)(vii) showed that any amount received by an individual without consideration and the aggregate value exceeds 50,000, the whole of the aggregate value is liable to be treated as income under the head 'income from other sources'. The Fourth Proviso thereunder provides for the exemptions and a Will can be written by anybody. In a Will, anybody can be given a bequeathal. The fact that the Fourth Proviso refers to relative in sub-clause (a), and refers to a Will or inheritance in clause (c) clearly shows that the Will need not be a Will of a relative. Amount received by the assessee as a legacy through the Will of God-mother under no circumstances, can be brought to tax under the head 'income from other sources' as the same was exempted by clause (c) of the Fourth Proviso to section 56(2)(vii).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2014-15

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