The accused - Sarabjit Singh - stayed with his uncle Rajinder Singh (49) in suburban Andheri of Mumbai.
Rajinder ran a food joint, while Sarabjit was unemployed, police said.
Sarabjit attacked Rajinder yesterday at around 8 PM, as he thought that the latter would usurp the food joint property without giving him any share.
"Sarabjit threw acid on the face of Rajinder and also assaulted him with an axe," a police officer said.
Rajinder was taken to Seven Hills hospital where he is undergoing treatment.
Sarabjit has been booked for attempt to murder.