“Section 56(2)(x)(b)”

An amendment to a section is declaratory and clarifies the existing legal position, rather than introducing a new rule.

Section 43CA of the Income Tax Act, 1961, taxes the difference between consideration and stamp duty value as deemed income when an asset other than land or building is transferred for less than the stamp duty value. A proviso to Section 43CA allows for a tolerance band of 10% difference.

Section 56(2)(vii)(b) of the Income-tax Act, 1961, which deals with income from acquisition of property for inadequate consideration, does not apply to agricultural land purchased by an assessee, as it is not considered a capital asset under Section 2(14) of the Act.

For the purpose of determining income under Section 56(2)(vii)(b) or 56(2)(x)(b), the stamp duty value or fair market value of immovable property is to be considered as on the date of payment made by the assessee towards booking of the property, where an agreement for purchase and payment of consideration has been made prior to the date of registration.

The proviso to Section 113 of the Income Tax Act is retrospective in nature and should be read into the block assessment scheme. The Supreme Court viewed that no statute should be construed to have a retrospective operation unless clearly indicated or by necessary implication, noting that assessments create vested rights.

A family arrangement or settlement does not give rise to any income. This is because it represents the working out of existing rights among family members rather than a transfer of property.

Section 56(2)(x) cannot be applied retrospectively to transactions entered into before its incorporation in the statute.