Yes, Anil — here are some relevant case law references and interpretations that help clarify the non-taxability of gifts from relatives, especially in the context of monthly support from a son to his parents:
🧾 Key Case Law References on Gifts from Relatives
1. Income Tax Officer vs. Smt. Kusumben D. Mahadevia (1980) 122 ITR 38 (SC)
- Held: A gift from a relative is not taxable under the Income Tax Act.
- Relevance: Reinforces that gifts from relatives are outside the scope of income under “Income from Other Sources.”
2. ACIT vs. Rajesh J. Shah (ITAT Mumbai) [2012]
- Held: Gifts received from a son are exempt under Section 56(2)(v) [now 56(2)(x)].
- Relevance: Monthly or lump-sum transfers from a son to parents are not taxable, as the son qualifies as a “relative.”
3. DCIT vs. Smt. Rekha Rani (ITAT Delhi) [2012]
- Held: Gifts received from relatives are not income and hence not taxable.
- Relevance: Clarifies that even substantial gifts from relatives are exempt, provided the relationship falls within the definition under the Act.
4. ITO vs. Smt. Taraben K. Patel (ITAT Ahmedabad) [2011]
- Held: Gifts from son-in-law were taxable as he was not covered under the definition of “relative.”
- Relevance: Highlights the importance of precise relationship definitions under Section 56(2)(x).
📌 Practical Implication for Monthly Transfers
- Son → Parents: Fully exempt, regardless of amount or frequency.
- Documentation: Not mandatory, but advisable to maintain bank records for audit clarity.
- No clubbing provisions apply unless the gifted amount earns income (e.g., interest), which then becomes taxable in the hands of the parents.
Would you like a visual slide or checklist summarizing these rulings for peer training or audit reference? I can also include a table mapping relationships vs. taxability under Section 56(2)(x).
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