“Section 56(1)(vii)(b)”

The amendment to section 50C(1) of the Income Tax Act, 1961, by inserting the third proviso through the Finance Act, 2018, is curative and applies retrospectively. This means the tolerance band for the difference between sale consideration and stamp duty value, introduced by this amendment, is applicable to earlier assessment years.

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.

An order passed under Section 263 is set aside if the Principal Commissioner of Income Tax (PCIT) erroneously passes it without proper justification. The PCIT must have a valid reason to believe the assessment order was both erroneous and prejudicial to the revenue's interests.

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

Penalty cannot be imposed when the addition to income is solely on account of the valuation officer's estimation of fair market value.