“section 56(2)(x)”
The decision most relied on for section 56(2)(x) is ACB India Ltd. v. ACIT (374 ITR 108), cited in 364 judgments on BharatTax.
Leading authorities on section 56(2)(x)
When computing disallowance under Section 14A of the Income-tax Act using Rule 8D of the Income-tax Rules, only investments that have actually yielded exempt income during the relevant previous year are to be considered for the calculation.
If the Assessing Officer has not conducted any investigation and thus has not discharged their burden of proof, any addition made by the AO is unsustainable and must be deleted.
Proceedings become fatal if principles of natural justice are violated, such as when seized material is not provided to the assessee or cross-examination of a person whose statement the Assessing Officer relies upon is denied.
The issue of shares and share premium is a capital account transaction, not an income-generating event, therefore Chapter X (Transfer Pricing) provisions are not attracted to deem notional or hypothetical income from such transactions.
Section 41(1) of the Income-tax Act cannot be invoked if the assessee has not been granted a deduction for the relevant liability in earlier years.
An adverse inference cannot be drawn against an assessee solely based on uncorroborated loose papers found during a search or on a statement made during the search that is later retracted, unless the Assessing Officer conducts independent enquiry to establish the facts.
To make an addition under Section 69B for undisclosed investment, the Revenue must first prove that an understatement of investment has occurred and that the assessee made the undisclosed investment. The burden of proof lies with the Revenue, and additions cannot be based merely on presumptions or assumptions without corroborative material.
The amendment introducing a tolerance band (safe harbour) under section 50C, allowing a difference of up to 10% between actual sale consideration and stamp duty valuation, applies retrospectively. If the difference falls within this limit, the actual sale consideration is adopted as the full value of consideration for computing capital gains.
