“Section 56(1)(viii)”
The decision most relied on for Section 56(1)(viii) is CIT v. Sunbeam Auto Ltd. (332 ITR 167), cited in 897 judgments on BharatTax.
Leading authorities on Section 56(1)(viii)
The Commissioner cannot revise an assessment under Section 263 merely because the assessment order does not explicitly reflect an inquiry, or because the Commissioner holds a different opinion. An inquiry, even if considered inadequate, or an assessment based on a plausible view by the Assessing Officer after due examination, does not automatically make the order erroneous or prejudicial to the interests of the revenue.
For exercising revisional jurisdiction under Section 263, the Commissioner must first find that the Assessing Officer's order is erroneous and unsustainable in law, as this is a condition precedent. An order is not erroneous merely because two views are possible, or if the Commissioner disagrees with the Assessing Officer's permissible view, or to simply remit the matter for further enquiries.
Interest received under Section 28 of the Land Acquisition Act, 1894, is considered part of the enhanced compensation on compulsory acquisition of land. It is taxable as 'capital gains' and not separately as 'interest income' under the head Income from Other Sources.
A mere audit objection, by itself, is insufficient to infer that an Assessing Officer's order is erroneous or prejudicial to the interest of the Revenue for the purpose of initiating revisional proceedings.
Interest received under Section 28 of the Land Acquisition Act, 1894, on enhanced compensation does not form part of the compensation itself but is taxable as 'income from other sources', analogous to interest under Section 34 of the Act.
A subsequent amendment cannot impose a new tax burden or liability for a period when such liability did not exist. Therefore, additional tax or penalty cannot be levied for non-disclosure of income made taxable retrospectively by an amendment not in force at the time of the original return.
Interest received under Section 28 of the Land Acquisition Act, 1894, forms an integral part of enhanced compensation and is not taxable as "Income from Other Sources" under Section 56(2)(viii) of the Income-tax Act, 1961. The Finance Act, 2009 amendments do not alter the compensatory nature of such interest.
Reassessment initiated under Section 148 is invalid if the reasons recorded for reopening incorrectly state that no return of income was filed by the assessee when a return had, in fact, been filed. Such a fundamental factual error vitiates the entire basis for the reassessment proceedings.
