SIDH FARMS,DELHI vs. INCOME TAX OFFICER, WARD 55(5), DELHI, DELHI

2 The aggrieved assessee has approached the ITAT with grounds challenging this action. 2. Before us, the Ld. AR argued that section 56(2)(vii)(b)(ii) of the Act pertains to only an individual “or a Hindu undivided family”, whereas this case pertains to a partnership firm. It was argued that the assessee cannot be subjected to any enhancement of income under this provision since there is no provision whatsoever for taxing a partnership firm u/s 56(2)(vii)(b)(ii) of the Act. The Ld. AR also placed before us the case of Smt. Chandrasekaran Valarmathi vs. ITO (in ITA No.652/Chny/2022) order dated 29.11.2023 in which the following has been recorded in para 5 as under: - “Therefore, applying purposive construction to the facts of the present case, the property is deemed to have been acquired by the firm only and not by individual partners. This being so, the provisions of Sec. 56(2)(vii)(b)(ii) could not be pressed into service since these provisions do not apply to partnership firm at the relevant point of time. Therefore, in our considered opinion, the impugned addition is not sustainable. By deleting the same, we allow both the appeals.” 3. We have carefully considered the rival submissions and have gone through the record before us. We find from a perusal of the language of section 56(2)(vii)(b)(ii) of the Act that it is specifically applicable to individuals and HUFs. It is thus clear that since the assessee is a partnership firm hence, there can be no addition made under this particular section. In this regard, the coordinate bench decision in the 3