“Section 56(2)(viia)”

Section References (mined)Section 56Section 56(2)(viia)86 judgments

The decision most relied on for Section 56(2)(viia) is CIT v. Tin Box Company (260 ITR 637), cited in 80 judgments on BharatTax.

Leading authorities on Section 56(2)(viia)

CIT v. Tin Box Company

260 ITR 637 · 2003 · High Court

citing judgments

When an assessee possesses sufficient interest-free funds, it is presumed that any interest-free advances or investments made are from these funds, preventing disallowance of interest under Section 36(1)(iii). This principle applies if own capital and interest-free loans exceed the interest-free advances given.

CIT v. Green Infra Ltd.

78 Taxmann.com 340 · 2017 · High Court

citing judgments

The valuation of shares is not relevant for determining the genuineness of a transaction under Section 68 of the Income Tax Act. Interest income earned on the deposit of surplus funds is taxable as business income.

DSJ Communication v. DCIT

222 Taxmann 129 · 2014 · High Court

citing judgments

Reopening of assessment under Section 147 is invalid if mandatory sanction or approval under Section 151 is not obtained from the prescribed authority. The AO must apply their mind and not proceed in a mechanical manner.

Sudhir Menon HUF v. ACIT

45 Taxmann.com 176 · 2014 · ITAT

citing judgments

Section 56(2)(vii)(c) does not apply to additional shares allotted pro rata to existing shareholders, as there is no scope for any property being received in such a situation.

Vora Financial Services (P) Ltd. v. ACIT

96 Taxmann.com 88 · 2018 · ITAT

citing judgments

Shares bought back by a company are not considered the property of the assessee for the purpose of Section 56(2)(viia), as a company cannot hold its own shares as property.

Judgments citing Section 56(2)(viia)

Humuza Consultants, Mumbai vs. The Pr. CIT-19, Mumbai

In the result, appeal filed by the assessee is allowed and the stay application filed by the assessee is dismissed

ITA 726/MUM/2021[2015-16]Status: DisposedITAT Mumbai07 Jan 2022AY 2015-16

Bench: Shri Prashant Maharishi () & Shri Pavan Kumar Gadale () Humuza Consultants Vs The Principal Commissioner Of 6Th Floor, Wokhardt Towers Income-Tax-19, Mumbai Bandra Kurla Complex Room No. 228, 2Nd Floor, Bandra East Matru Mandir Mumbai-400 01 Tardeo Road, Pan : Aahfh9240E Mumbai-400 007 Appellant Respondent Appellant By Shri Jd Mistry & Hiten Chande Respondent By Shri K.K. Mishra (Cit,Dr) Date Of Hearing 07-12-2021 Date Of Pronouncement 07-01-2022 O R D E R Per Prashant Maharishi (Am):

Section 143Section 143(3)Section 263Section 56Section 68

amounting to Rs. 32,94,88,785/- as gift from three different companies. Assessee claims that it is not chargeable to tax under section 56(2) (viia) of the Income-tax Act, 1961. On these shares, assessee has disclosed dividend income of Rs. 131,79,55,140/-. He noted that ... revenue. It was also submitted that during assessment proceedings, assessee has contended that the share of Wokhardt Ltd were not taxable under section 56(2) (viia) of the Act as it is a share of a listed company i.e. company in which public are substantially interested. It was further submitted

Pushp Steel and Mining Private Limited, Delhi vs. PCIT, Delhi-7

In the result, appeal of the assessee is allowed

ITA 811/DEL/2021[2015-16]Status: DisposedITAT Delhi22 Dec 2021AY 2015-16

Bench: Sh. Anil Chaturvedi & Sh. K. Narasimha Chary

Section 143(2)Section 143(3)Section 263Section 263(1)Section 56(2)(viia)

year, assessee had made investment in unlisted equity shares of closely held companies and issue of fair market value of investment as per Section 56(2)(viia) of the Act was not examined by the AO for determination of the fair market value of share. He accordingly issued show-cause ... issue and had also examined the income derived from such investments but however PCIT found another reason, namely the application of provisions of Section 56(2)(viia), which was alien to the reason for selection of the case for scrutiny, for invoking the powers u/s 263 of the Act with

Pawansut Media Services Pvt Ltd, New Delhi vs. Pr. CIT - 7, New Delhi

In the result, appeal of the assessee is allowed

ITA 534/DEL/2021[2015-16]Status: DisposedITAT Delhi14 Oct 2021AY 2015-16

Bench: Shri R.K. Panda & Shri Amit Shukla

For Appellant: Shri Kapil Goel, Advocate &For Respondent: Smt. Sushma Singh, CIT-DR

Section 143(3)Section 263Section 56(2)(viia)

equity shares of the following 3 ITA.No.534/Del./2021 Pawansut Media Services Pvt. Ltd., Delhi. companies which is hit by the provisions of Section 56(2)(viia) of the Income Tax Act, 1961 : 2.3. However, the A.O. during the course of assessment proceedings has not examined the issue of applicability ... provisions of Section 56(2)(viia) of I.T. Act for basis of determination of Fair Market Value [“FMV"]. Similarly, the other reason for scrutiny was investment in unlisted equity shares during the year. However, although the A.O. has examined with regard to source of investment 4 ITA.No.534/Del./2021 Pawansut

DCIT, New Delhi vs. M/S. Jaypee Capital Services Ltd., New Delhi

In the result, ITA.No.3559/Del

ITA 3559/DEL/2016[2012-13]Status: DisposedITAT Delhi21 Sept 2021AY 2012-13

Bench: Shri R.K. Panda & Shri Sudhanshu Srivastava

For Appellant: And Shri Ashish Goel, C.AFor Respondent: Shri Bhuvnesh Kulshreshtha

Section 132Section 153A

also made addition of Rs.113,31,36,001/- on account of allotment of shares of NCDEX by invoking provisions of section 56(2)(viia). While dong so, the A.O. noted that NCDEX was promoted by various Financial Institutions. Over a period of time the 19 ITA.No.3558 & 3559/Del./2016 ... This is the direct benefit passed on by NCDEX to JCSL in lieu of achieving its objectives. The A.O. analyzed the provisions of Section 56(2)(viia) and noted that as per the agreement between the company and NCDEX, the equity shares of NCDEX were allotted to JCSL @ Rs.59

DCIT, New Delhi vs. M/S. Jaypee Capital Services Ltd., New Delhi

In the result, ITA.No.3559/Del

ITA 3558/DEL/2016[2011-12]Status: DisposedITAT Delhi21 Sept 2021AY 2011-12

Bench: Shri R.K. Panda & Shri Sudhanshu Srivastava

For Appellant: And Shri Ashish Goel, C.AFor Respondent: Shri Bhuvnesh Kulshreshtha

Section 132Section 153A

DCIT, New Delhi vs. M/S. Technico Industries Pvt. Ltd., New Delhi

In the result, the appeal filed by the Revenue is dismissed

ITA 5204/DEL/2015[2011-12]Status: DisposedITAT Delhi09 Mar 2021AY 2011-12

Bench: Shri R.K. Panda & Ms Suchitra Kambleassessment Year: 2011-12 Dcit, Vs Technico Industries Pvt. Ltd., Circle-25(1), 103, Pratap Bhawan, Cr Building, Ip Estate, Bahadur Shah Zafar Marg, New Delhi. Near Indian Express Building, New Delhi. Pan: Aaact4445P (Appellant) (Respondent) Assessee By : Shri Aditya Kumar, Ca & Shri Ashwani Kumar, Ca Revenue By : Mrs Aashna Paul, Cit-Dr Date Of Hearing : 17.12.2020 Date Of Pronouncement : 09.03.2020 Order Per R.K. Panda, Am: This Appeal Filed By The Revenue Is Directed Against Order Dated 31St March, 2015 Of The Cit(A)-9, New Delhi Relating To Assessment Year 2011-12. 2. Facts Of The Case, In Brief, Are That The Assessee Is A Company Engaged In The Business Of Manufacturing Of Sheet Metal Components & Tools & Dies. It Filed Its Return Of Income On 29Th September, 2011 Declaring ‘Nil’ Income. The Said Return Was Revised On 14Th September, 2012 Declaring A Loss Of Rs.3,61,68,075/-. During The Course Of Assessment Proceedings, The Ao, On Perusal Of The Balance Sheet Filed By The Assessee, Noted That The Assessee Company Has Issued 14,72,000 Equity Shares At A Premium Of Rs.115. From The Various Details Furnished By The Assessee, The Ao Noted That The Assessee Has Issued Shares To The Following Persons/Parties:-

For Appellant: Shri Aditya Kumar, CA &For Respondent: Mrs Aashna Paul, CIT-DR

Section 133(6)

required to prove the source, but, also the source of the source. Further, according to the AO, the amendment to the provisions of section 56(2)(viia) and (viib) are applicable to the facts of the present case. The AO further noted that introduction of proviso to section 68 w.e.f ... assessee has to not only prove the source, but, also the source of the source. The AO further noted that amendment to the section 56(2)(viia) and (viib) was made to prevent flow of unaccounted money into regular business channel by using dubious mechanism by routing funds through various