My step-sister gifted me a flat. Can the department tax it because we are not blood relations?
No. Step-siblings fall within 'relative' for the gift exclusion. Because 'brother and sister of the individual' is not defined in the Act, the common-law meaning applies, and relationships by affinity - including the step-sibling relationship arising from a parent's marriage - come within those words. The registered gift was outside s.56(2)(vii) and the addition of Rs. 7,50,68,525 was deleted. Two limits: the holding is about an individual recipient, and says nothing about the separate definition that applies where the recipient is a Hindu undivided family, and the order relies on no precedent at all.
Decided by the ITAT (ITAT Mumbai Bench 'I' - Amit Shukla (Judicial Member) and Amarjit Singh (Accountant Member); order delivered by Amit Shukla, JM; ITA No. 5884/Mum/2024; AY 2016-17) on 2025-03-21, reported as [2025] 172 taxmann.com 855 (Mum.)(Trib.); (2026) 134 ITR (Trib.) 413 (Mum.)(Trib.); the (2025) 234 TTJ 820 reference is not on the reporter's citation line and remains unconfirmed. It bears on section 56(2)(vii), section 56(2)(vii)(b), section 2(15B), section 148 (raised but expressly left undecided as academic) of the Income Tax Act 1961, in Gifts, Shares & Angel Tax and Reassessment & Reopening matters.
It answers the specific line that only a biological or adoptive connection counts. The Tribunal got there on the dictionary meanings of 'relative' and 'affinity', and on an inference from statutes that do define step-relations - s.2(15B) of the Act, s.45S of the Reserve Bank of India Act and s.2(77) of the Companies Act - and it dealt with the contrary indication from the Indian Succession Act by confining it to rights of inheritance. The amounts in these cases are usually the whole value of the property, so the point is worth taking properly. Two things temper it. The published criticism runs the same statutes the other way: because Parliament defined step-relations expressly elsewhere and not here, the omission may be deliberate. The Tribunal cited those very statutes and drew the opposite inference from them, without addressing that argument. And the order relies on no decision of any court, so it stands on its own reasoning alone. The addition here was made in an assessment reopened under s.148, but the challenge to the reopening was left undecided.
Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere.
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The assessee received a flat at Worli under a registered gift deed dated 21 January 2016 from Vidhie Mukerjea, and the assessment for AY 2016-17 was reopened under s.147 read with s.144C. Three figures appear on the record: the ground of appeal is against an addition of Rs. 7,50,81,605 (para 2); the stamp value of the property, and the addition actually made, are Rs. 7,50,68,525 (paras 5 and 9); and the reasons recorded aggregate Rs. 7,88,99,345, being that stamp value plus Rs. 38,30,820 of stamp duty and registration fees which the Assessing Officer also sought to bring in. The relationship, as found: Vidhie Mukerjea is the daughter of Indrani Mukerjea by her earlier husband, and the assessee is the son of Peter Mukerjea by his earlier wife; on the marriage of Indrani and Peter the two became step-sister and step-brother. There is no common parent, biological or adoptive, and no adoption was claimed. The flat had passed by gift from Peter to Indrani as to a half share in 2003, from both of them to Vidhie in 2011, and then from Vidhie to the assessee. The Assessing Officer held that donor and donee were not relatives within s.56(2)(vii) because there was no biological or adoptive connection, and taxed the value as income from other sources.
A gift by a step-sister to a step-brother falls within 'relative'. Because 'brother and sister of the individual' is not defined in the Act, the meaning defined in common law has to be adopted, and in the absence of any negative covenant in the Act, brother and sister include a step-brother and step-sister who have become such by the marriage of their parents (para 16). The property received was therefore outside s.56(2)(vii), the addition of Rs. 7,50,68,525 was deleted and the appeal was allowed on merits; nothing was restored to the Assessing Officer. Two limits are on the face of the order. The holding is about an individual recipient and the entry in the Explanation for a brother or sister of the individual; it says nothing about the separate definition that applies where the recipient is a Hindu undivided family. And the challenge to the reopening was expressly treated as academic and left undecided (para 17), so the decision says nothing about s.148.
The Tribunal identified five kinds of brother-and-sister relation - uterine, consanguine, germane or biological, step, and adopted - and noted that whole blood and half blood fall within the first three (paras 10 and 11). It then ran two strands. The first, at para 12, is an inference from other statutes: s.2(15B) of the Act defines 'child' to include a step child and an adopted child, so a step child is already treated as a child for the Act's purposes, and s.45S of the Reserve Bank of India Act 1934 and s.2(77) of the Companies Act 2013 both include step-brother and step-sister in their lists of relatives. The second and decisive strand is the dictionary meaning: 'relative' is a person connected with another by blood or affinity, generically including ties of affinity as well as consanguinity and expressly covering an individual in a step or adoptive relationship within the third degree (para 13); affinity is the relation arising from marriage between one spouse and the blood relations of the other (para 15). The Tribunal confronted the contrary indication and rejected it: under the Indian Succession Act 1925 step-siblings, unless duly adopted, are not legal heirs and cannot inherit from a step-parent, and whole blood is preferred to half blood, but that bears on rights of inheritance and does not lead to the inference that step-siblings related by affinity through the marriage of their parents cannot be brother and sister within 'relative' (para 14). No precedent was relied on: the order cites no decision of any court at all, its only authorities being two dictionaries and four statutes.
If the term 'brother and sister of the individual' has not been defined under the Income Tax Act, then, the meaning defined in common law has to be adopted and in absence of any other negative covenant under the Act, in our view, brother and sister should also include step brother and step sister who by virtue of marriage of their parents have become brother and sister.
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Handle my notice → Ask a CA on WhatsAppNo. Step-siblings fall within 'relative' for the gift exclusion. Because 'brother and sister of the individual' is not defined in the Act, the common-law meaning applies, and relationships by affinity - including the step-sibling relationship arising from a parent's marriage - come within those words. The registered gift was outside s.56(2)(vii) and the addition of Rs. 7,50,68,525 was deleted. Two limits: the holding is about an individual recipient, and says nothing about the separate definition that applies where the recipient is a Hindu undivided family, and the order relies on no precedent at all. This was decided by the ITAT (ITAT Mumbai Bench 'I' - Amit Shukla (Judicial Member) and Amarjit Singh (Accountant Member); order delivered by Amit Shukla, JM; ITA No. 5884/Mum/2024; AY 2016-17) and bears on section 56(2)(vii), section 56(2)(vii)(b), section 2(15B), section 148 (raised but expressly left undecided as academic) of the Income Tax Act 1961. It is reported as [2025] 172 taxmann.com 855 (Mum.)(Trib.); (2026) 134 ITR (Trib.) 413 (Mum.)(Trib.); the (2025) 234 TTJ 820 reference is not on the reporter's citation line and remains unconfirmed. It answers the specific line that only a biological or adoptive connection counts. The Tribunal got there on the dictionary meanings of 'relative' and 'affinity', and on an inference from statutes that do define step-relations - s.2(15B) of the Act, s.45S of the Reserve Bank of India Act and s.2(77) of the Companies Act - and it dealt with the contrary indication from the Indian Succession Act by confining it to rights of inheritance. The amounts in these cases are usually the whole value of the property, so the point is worth taking properly. Two things temper it. The published criticism runs the same statutes the other way: because Parliament defined step-relations expressly elsewhere and not here, the omission may be deliberate. The Tribunal cited those very statutes and drew the opposite inference from them, without addressing that argument. And the order relies on no decision of any court, so it stands on its own reasoning alone. The addition here was made in an assessment reopened under s.148, but the challenge to the reopening was left undecided. If it applies to you, the first step is this: File the registered gift deed and set out the relationship chain showing that the step-sibling link arises from the marriage of the parents.
The assessee received a flat at Worli under a registered gift deed dated 21 January 2016 from Vidhie Mukerjea, and the assessment for AY 2016-17 was reopened under s.147 read with s.144C. Three figures appear on the record: the ground of appeal is against an addition of Rs. 7,50,81,605 (para 2); the stamp value of the property, and the addition actually made, are Rs. 7,50,68,525 (paras 5 and 9); and the reasons recorded aggregate Rs. 7,88,99,345, being that stamp value plus Rs. 38,30,820 of stamp duty and registration fees which the Assessing Officer also sought to bring in. The relationship, as found: Vidhie Mukerjea is the daughter of Indrani Mukerjea by her earlier husband, and the assessee is the son of Peter Mukerjea by his earlier wife; on the marriage of Indrani and Peter the two became step-sister and step-brother. There is no common parent, biological or adoptive, and no adoption was claimed. The flat had passed by gift from Peter to Indrani as to a half share in 2003, from both of them to Vidhie in 2011, and then from Vidhie to the assessee. The Assessing Officer held that donor and donee were not relatives within s.56(2)(vii) because there was no biological or adoptive connection, and taxed the value as income from other sources. The matter was decided on 2025-03-21 by the ITAT (ITAT Mumbai Bench 'I' - Amit Shukla (Judicial Member) and Amarjit Singh (Accountant Member); order delivered by Amit Shukla, JM; ITA No. 5884/Mum/2024; AY 2016-17). On those facts the ITAT held as follows. A gift by a step-sister to a step-brother falls within 'relative'. Because 'brother and sister of the individual' is not defined in the Act, the meaning defined in common law has to be adopted, and in the absence of any negative covenant in the Act, brother and sister include a step-brother and step-sister who have become such by the marriage of their parents (para 16). The property received was therefore outside s.56(2)(vii), the addition of Rs. 7,50,68,525 was deleted and the appeal was allowed on merits; nothing was restored to the Assessing Officer. Two limits are on the face of the order. The holding is about an individual recipient and the entry in the Explanation for a brother or sister of the individual; it says nothing about the separate definition that applies where the recipient is a Hindu undivided family. And the challenge to the reopening was expressly treated as academic and left undecided (para 17), so the decision says nothing about s.148.
The Tribunal identified five kinds of brother-and-sister relation - uterine, consanguine, germane or biological, step, and adopted - and noted that whole blood and half blood fall within the first three (paras 10 and 11). It then ran two strands. The first, at para 12, is an inference from other statutes: s.2(15B) of the Act defines 'child' to include a step child and an adopted child, so a step child is already treated as a child for the Act's purposes, and s.45S of the Reserve Bank of India Act 1934 and s.2(77) of the Companies Act 2013 both include step-brother and step-sister in their lists of relatives. The second and decisive strand is the dictionary meaning: 'relative' is a person connected with another by blood or affinity, generically including ties of affinity as well as consanguinity and expressly covering an individual in a step or adoptive relationship within the third degree (para 13); affinity is the relation arising from marriage between one spouse and the blood relations of the other (para 15). The Tribunal confronted the contrary indication and rejected it: under the Indian Succession Act 1925 step-siblings, unless duly adopted, are not legal heirs and cannot inherit from a step-parent, and whole blood is preferred to half blood, but that bears on rights of inheritance and does not lead to the inference that step-siblings related by affinity through the marriage of their parents cannot be brother and sister within 'relative' (para 14). No precedent was relied on: the order cites no decision of any court at all, its only authorities being two dictionaries and four statutes. In the words reproduced by the source cited on this page: "If the term 'brother and sister of the individual' has not been defined under the Income Tax Act, then, the meaning defined in common law has to be adopted and in absence of any other negative covenant under the Act, in our view, brother and sister should also include step brother and step sister who by virtue of marriage of their parents have become brother and sister."
It was decided by the ITAT on 2025-03-21 and is reported as [2025] 172 taxmann.com 855 (Mum.)(Trib.); (2026) 134 ITR (Trib.) 413 (Mum.)(Trib.); the (2025) 234 TTJ 820 reference is not on the reporter's citation line and remains unconfirmed. Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere. A Tribunal decision binds the assessing officer and the Commissioner (Appeals) within that Tribunal's jurisdiction, and is persuasive before other benches. It is not binding on a High Court, and a contrary co-ordinate bench decision will be argued against you, so check whether the point has been taken the other way before you build a reply around it. On section 56(2)(vii), section 56(2)(vii)(b), section 2(15B), section 148 (raised but expressly left undecided as academic), the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It helps the taxpayer. A gift by a step-sister to a step-brother falls within 'relative'. Because 'brother and sister of the individual' is not defined in the Act, the meaning defined in common law has to be adopted, and in the absence of any negative covenant in the Act, brother and sister include a step-brother and step-sister who have become such by the marriage of their parents (para 16). The property received was therefore outside s.56(2)(vii), the addition of Rs. 7,50,68,525 was deleted and the appeal was allowed on merits; nothing was restored to the Assessing Officer. Two limits are on the face of the order. The holding is about an individual recipient and the entry in the Explanation for a brother or sister of the individual; it says nothing about the separate definition that applies where the recipient is a Hindu undivided family. And the challenge to the reopening was expressly treated as academic and left undecided (para 17), so the decision says nothing about s.148. It arises in Gifts, Shares & Angel Tax and Reassessment & Reopening matters, on section 56(2)(vii), section 56(2)(vii)(b), section 2(15B), section 148 (raised but expressly left undecided as academic) of the Income Tax Act 1961, and was decided by ITAT Mumbai Bench 'I' - Amit Shukla (Judicial Member) and Amarjit Singh (Accountant Member); order delivered by Amit Shukla, JM; ITA No. 5884/Mum/2024; AY 2016-17. Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. Answer the 'no biological or adoptive connection' objection directly, on the ground that relationships by affinity are within the words 'brother' and 'sister' and that the term is not defined in the Act. Expect the argument that Parliament defined step-relations expressly in other statutes and deliberately omitted them here, and be ready to meet it - the Tribunal drew the opposite inference from those statutes but never addressed that argument. Do not rely on this where the recipient is a Hindu undivided family; the definition of relative for a family is a separate one and this decision does not touch it. Where the addition comes in a reopened assessment, argue the merits fully - this appeal succeeded on merits and the reopening challenge was left undecided. Keep the valuation adopted by the officer and its basis on record in case the relationship point does not carry.
Validity check could not be completed. Unverified. The order has been read in full. Nothing on its record shows any later judicial treatment: there is no citator entry, no case review block, and the only other records returned alongside it are commentary articles, which are not treatment. The requirement for good law is not met and the status stays where it is. Two things now established from the order strengthen the existing caution rather than the entry. The decision rests on no precedent at all - its authorities are two dictionaries and four statutes, and it cites no decision of any court. And the challenge to the reopening was expressly treated as academic and left undecided at para 17. The published criticism can also be put more precisely than before: a commentary sets out the argument that reading in a term Parliament left undefined would be to amend rather than construe the statute, and that other statutes, the Companies Act and the Reserve Bank of India Act among them, define step-relations expressly so the omission here may be deliberate. The Tribunal cited those two statutes at para 12 and drew the opposite inference from them, and it did not address the deliberate-omission argument. A reader should also know the ground is narrow: the holding is about an individual recipient and the entry in the Explanation for a brother or sister of the individual, and it says nothing about the separate definition that applies where the recipient is a Hindu undivided family. That finding was checked against a published source, which is linked on this page, on 2026-08-24. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
The order has been read in full. It is Mumbai Bench 'I'. The citation the earlier note rejected as impossible is real: the reports are [2025] 172 taxmann.com 855 and [2026] 134 ITR (Trib.) 413, the ITR (Tribunal) series being separate from ITR, so a 2026 volume reporting a March 2025 Tribunal order is perfectly ordinary; the missing '(T)' on the listing is what caused the rejection. The TTJ reference carried here is not on the reporter's citation line - it is not contradicted, but it is unconfirmed. The phrase previously quoted, 'ordinary legal and social understanding', appears nowhere in the order; it is the reporting site's own wording and has been replaced with the ratio at para 16. Three things a reader must know before citing the decision. It relies on no precedent at all, its authorities being two dictionaries and four statutes. The challenge to the reopening was expressly left undecided as academic at para 17, so s.148 is listed here only as a provision that was in issue and not decided. And the addition figure is not clean: the ground of appeal gives Rs. 7,50,81,605, the stamp value and the addition made are Rs. 7,50,68,525, and the reasons recorded aggregate Rs. 7,88,99,345, the Tribunal having deleted the addition without resolving which is right. The step-relationship facts, the registered gift deed of 21 January 2016, the appeal number, the members, the date and the assessment year all match the order. Nobody has confirmed the order still stands. The order cites no decision of any court, so there is nothing supporting it and nothing to follow from it. It decides the position of an individual recipient under the entry for a brother or sister of the individual and says nothing about a receipt by a Hindu undivided family, which is governed by a separate definition. The reopening challenge was left undecided. Three different figures for the addition appear on the face of the order and the Tribunal deleted the addition without resolving which was right. It also does not address the deliberate-omission argument that the published criticism turns on, although it cited the statutes on which that argument rests. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
A gift by a step-sister to a step-brother falls within 'relative'. Because 'brother and sister of the individual' is not defined in the Act, the meaning defined in common law has to be adopted, and in the absence of any negative covenant in the Act, brother and sister include a step-brother and step-sister who have become such by the marriage of their parents (para 16). The property received was therefore outside s.56(2)(vii), the addition of Rs. 7,50,68,525 was deleted and the appeal was allowed on merits; nothing was restored to the Assessing Officer. Two limits are on the face of the order. The holding is about an individual recipient and the entry in the Explanation for a brother or sister of the individual; it says nothing about the separate definition that applies where the recipient is a Hindu undivided family. And the challenge to the reopening was expressly treated as academic and left undecided (para 17), so the decision says nothing about s.148.
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