“Section 56(2)(viib)”

Section References (mined)Section 56Section 56(2)(viib)483 judgments

The decision most relied on for Section 56(2)(viib) is Vodafone India Services (P.) Ltd. v. Union of India (368 ITR 1), cited in 172 judgments on BharatTax.

Leading authorities on Section 56(2)(viib)

Vodafone India Services (P.) Ltd. v. Union of India

368 ITR 1 · 2014 · High Court

172

citing judgments

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.

National Insurance Co. Ltd. v. Pranay Sethi

16 SCC 680 · 2017 · Reported

152

citing judgments

The Supreme Court in Pranay Sethi laid down the principles for determining 'future prospects' to be added to the income of a deceased person for calculating compensation under the Motor Vehicles Act. It also clarified principles of judicial discipline, including the binding nature of coordinate bench decisions and how to resolve conflicting Supreme Court judgments.

SA Builders, 288 ITR 1 (SC) and CIT v. Panipat Woollen and General Mills Company Ltd.

103 ITR 66 · 1976 · Supreme Court

105

citing judgments

The Income Tax Department cannot sit in the armchair of a businessman or question their commercial wisdom and business decisions. Expenses incurred for business expediency, determined from the businessman's point of view, are allowable business expenses.

PCIT v. Chain House International (P) Ltd.

98 Taxmann.com 47 · 2018 · High Court

104

citing judgments

The Assessing Officer cannot arbitrarily reject a share valuation report prepared by an expert using recognized methods like NAV or DCF for the purpose of Section 56(2)(viib) without providing valid reasons to demonstrate its perversity or unreasonableness.

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.

Vodafone M-Pesa Ltd. v. PCIT

164 DTR 257 · 2018 · High Court

citing judgments

An assessee has the option to choose either the Discounted Cash Flow (DCF) method or the Net Asset Value (NAV) method for share valuation under Section 56(2)(viib) read with Rule 11UA. The Assessing Officer cannot substitute the chosen method or value without identifying a specific error in the assessee's valuation.

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.

PCIT v. Cinestaan Entertainment Pvt Ltd.

433 ITR 82 · 2021 · High Court

citing judgments

The Assessing Officer cannot reject the share valuation method adopted by an assessee under Section 56(2)(viib) if it adheres to prescribed methodologies and commercial prudence. The valuation cannot be challenged based on future performance or by substituting another method.

Judgments citing Section 56(2)(viib)

Balaka Vinimay Pvt. Ltd., Kolkata vs. ITO, Ward-2(1), Kolkata

In the result, appeals of the assessee in ITA No

ITA 161/KOL/2024[2008-09]Status: DisposedITAT Kolkata21 Jun 2024AY 2008-09

Bench: Shri Sanjay Garg, Hon’Ble & Dr. Manish Borad, Hon’Blei.T.A. No. 160 & 161/Kol/2024 Assessment Year: 2008-09 Balaka Vinimay Pvt. Ltd. Income Tax Officer, Ward – 2(1), 9/12, Lal Bazar Street Vs Kolkata Kolkata - 700001 [Pan : Aadcb2610B] अपीलाथ"/ (Appellant) "" यथ"/ (Respondent) Assessee By : Shri A.K. Tibrewal, A/R & Saurav Gupta, A/R Revenue By : Shri Abhijit Kundu, Cit, Sr. D/R सुनवाई क" तारीख/Date Of Hearing : 09/04/2024 घोषणा क" तारीख /Date Of Pronouncement: 21/06/2024 आदेश/O R D E R Per Dr. Manish Borad: The Instant Appeals Are Directed At The Instance Of The Assessee Against The Separate Orders Of The National Faceless Appeal Centre, Delhi, (Hereinafter The “Ld. Cit(A)”). Ita No. 160/Kol/2024 Is Against The Order Of The Ld. Cit(A) Dt. 29/11/2023, Passed U/S 250 Of The Income Tax Act, 1961 (Hereinafter ‘The Act’) Arising Out Of The Penalty Order Passed By The Ld. Assessing Officer U/S 271(1)(C) Of The Act & Ita No. 161/Kol/2023, Is Against The Order Of The Ld. Cit(A) Dt. 28/11/2023, Arising Out Of The Order Of The Ld. Assessing Officer Passed U/S 143(3) R.W.S. 254 Of The Act, For Assessment Year 2008-09. 2. Though The Assessee Has Raised Various Grounds In Both These Appeals, But The Effective Issue Raised In Ita No. 161/Kol/2024 Is Against The Addition Made U/S 68 Of The Act For Unexplained Share Capital Confirmed By The Ld. Cit(A) & In Ita No. 160/Kol/2024 Is Against The Levy Of Penalty U/S 271(1)(C) Of The Act On The Addition Made

For Appellant: Shri A.K. Tibrewal, A/R and Saurav Gupta, A/RFor Respondent: Shri Abhijit Kundu, CIT, Sr. D/R

Section 142(1)Section 143(3)Section 147Section 148Section 250Section 263Section 271(1)(c)Section 68

| आयकर अपीलीय अिधकरण "यायपीठ, कोलकाता | IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, KOLKATA BEFORE SHRI SANJAY GARG, HON’BLE

Balaka Vinimay Pvt. Ltd., Kolkata vs. ITO, Ward-2(1), Kolkata

In the result, appeals of the assessee in ITA No

ITA 160/KOL/2024[2008-09]Status: DisposedITAT Kolkata21 Jun 2024AY 2008-09

For Appellant: Shri A.K. Tibrewal, A/R and Saurav Gupta, A/RFor Respondent: Shri Abhijit Kundu, CIT, Sr. D/R

Section 142(1)Section 143(3)Section 147Section 148Section 250Section 263Section 271(1)(c)Section 68

| आयकर अपीलीय अिधकरण "यायपीठ, कोलकाता | IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, KOLKATA BEFORE SHRI SANJAY GARG, HON’BLE

Ecotech Builders Private Limited, Noida vs. Pr, CIT, Noida

The appeal is allowed

ITA 1601/DEL/2023[2018-19]Status: DisposedITAT Delhi13 Jun 2024AY 2018-19

Bench: Shri G.S. Pannu & Shri Anubhav Sharma[Assessment Yr: 2018-19

Section 142(1)Section 143(3)Section 263Section 56(2)(b)

submitted that there was inadvertent error in the valuation report, where Section 56(2)(viia) of the Act was mentioned instead of Section 56(2)(viib). It was pointed out that in proceedings before the PCIT, even the valuer issued a report correcting the inadvertent mistake along with undertaking

Assistant Commissioner of Income Tax Central Circle-1(3), Nagpur vs. M/S Vedsidha Products Privat Limited, Nagpur

In the result, appeal filed by the Revenue is allowed

ITA 25/NAG/2020[2014-15]Status: DisposedITAT Nagpur12 Jun 2024AY 2014-15

Bench: Shri V. Durga Rao & Shri K.M. Roy, Accountant, Member

For Appellant: Shri Mahavir AtalFor Respondent: Shri Abhay Y. Marathe

Section 44ASection 56(2)(viib)

circumstances of the case and in law, the Ld. CIT(A) has failed to appreciate that in clause (ii) of Explanation (a) to section 56(2)(viib) provides for the Assessing Officer to adopt the FMV as may be determined under Rule 11UA or as may substantiated by the company ... no.25/Nag./2020 remaining 35,000 shares of ` 100, each were issued at premium of ` 450. The Assessing Officer invoked provisions of section 56(2)(viib) of the Income Tax Act, 1961 (“the Act”). As required by Explanation to section 56(2)(viib), the mode of computing fair market value

ITO Ward - 24(1), New Delhi vs. Solitaire Btn Solar Pvt Limited, New Delhi

In the result, the appeal of the Revenue is dismissed

ITA 1416/DEL/2020[2016-17]Status: DisposedITAT Delhi12 Jun 2024AY 2016-17

Bench: Shri Kul Bharat & Shri Pradip Kumar Kedia

For Appellant: Shri Gaurav Jain, AdvocateFor Respondent: Shri Gurpreet Singh, Sr.DR

Section 143(3)Section 250Section 56(2)(viib)

thus quantified as excessive premium collected over FMV which was held to be susceptible to tax on the touchstone of section 56(2)(viib) of the Act. 4. Aggrieved, the assessee preferred appeal before the CIT(A). It was emphasized by the Assessee that the subscriber company, M/s. Hindustan Clean ... premium charged is in symmetry with the underlying value of the assessee company. It was also pointed out that the deeming provisions of Section 56(2)(viib) is not applicable since the OCPS have been allotted to none other than the holding company. The Rules applied for valuation of shares

Chemitech Engineers Pvt Ltd, New Delhi vs. ACIT Circle-6(1), New Delhi

In the result, the appeal of the assessee is allowed

ITA 9074/DEL/2019[2015-16]Status: DisposedITAT Delhi12 Jun 2024AY 2015-16

Bench: Shri Kul Bharat & Shri Pradip Kumar Kedia

For Appellant: Sh. Sanjay Kumar, Chartered AccountantFor Respondent: Ms. Sarita Kumar, CIT-DR

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

assessee. The AO has simply accepted the valuation report without applying its mind to all perspective with reference to object of Section 56(2)(viib) of the Act. 3. The relevant facts in brief are that the assessee filed return of income declaring total income at Rs.80 ... have been made to ascertain the FMV of equity shares issued at premium for the purposes of deemed income taxability with reference to Section 56(2)(viib) of the Act. 4. The show cause notice issued in this regard is reproduced hereunder: “The assessment of M/s. Chemi Tech Engineers

DCIT, CC-20, Delhi vs. Weldon Polymers Pvt. Ltd., Delhi

The appeal of the Revenue is dismissed

ITA 1868/DEL/2021[2017-18]Status: DisposedITAT Delhi10 Jun 2024AY 2017-18

Bench: Shri Gs Pannu & Shri Anubhav Sharma

For Appellant: Shri Salil Kapoor, Adv. and Shri Utkarsh Kumar Gupta, AdvFor Respondent: Shri Amit Katoch, Sr. Dr

Section 143(3)Section 56(2)(viib)Section 68A

added back to the income of the assessee under the head other source according to section 56(2)(viib) of the Income Tax Act, 1961. 3. In appeal, the same was deleted for which, the Revenue is in appeal, and raising the following grounds;- “1. That

Hatch Tact Innovations Private Limited, Gurgaon vs. Pr. CIT, Faridabad

The appeal of the assessee is allowed

ITA 1261/DEL/2021[2016-17]Status: DisposedITAT Delhi04 Jun 2024AY 2016-17

Bench: Shri G.S. Pannu, Hon’Ble & Shri Anubhav Sharmaassessment Year: 2016-17 Hatch Tact Innovations Private Vs Pr. Cit, Limited, Faridabad. C2/215, Jal Vayu Towers, Sector 56, Gurgaon (Haryana) – 122 002. Pan: Aadch5527R (Appellant) (Respondent) Assessee By : Shri P.K. Jain, Ca Revenue By : Ms Sapna Bhatia, Cit-Dr & Shri Amit Katoch, Sr. Dr Date Of Hearing : 05.04.2024 Date Of Pronouncement : 04.06.2024 Order Per Anubhav Sharma, Jm:

For Appellant: Shri P.K. Jain, CAFor Respondent: Ms Sapna Bhatia, CIT-DR &

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

their consent. Keeping in view of these facts the amount of share premium of Rs. 29,64,320/- should have been taxed under section 56(2)(viib) of the Act.” 4. The assessee submitted that due information was provided to the ld. AO who was satisfied, with the computation ... fair market value. Keeping in view of these facts the amount of share premium of Rs.29,64,320/- should have been taxed under section 56(2)(viib) of the Act. Assessee has stated before the AO that it was a startup company but no Certificate issued from the Inter- Ministerial

Assistant Commissioner of Income Tax, Circle-1(1), New Delhi, C.R. Building vs. Asr Market Ventures Private Limited, Delhi

In the result, the appeal of the Revenue is dismissed

ITA 3161/DEL/2023[2016-17]Status: DisposedITAT Delhi31 May 2024AY 2016-17

Bench: Shri Challa Nagendra Prasad & Shri Brajesh Kumar Singh[Assessment Year: 2016-17]

Section 143(3)Section 56(2)Section 56(2)(viib)

reads as under:- “1. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in holding that section 56(2)(viib) of the Act is not applicable to the assessee's case in view of para no. 4 of the Notification ... Notification GSR 127(B) dated 19.02.2019 as the assessment order making an addition of Rs. 1,84,86,525/- under section 56(2)(viib) was passed on 28.12.2018, whereas the date of issue of Notification is 19.02,2019, Hence, para no. 4 of the Notification based on which

Cks Medicare Private Limited, Jaipur vs. ACIT, Circle-4, Jaipur

Appeal is hereby allowed for statistical purposes

ITA 262/JPR/2024[2017-18]Status: DisposedITAT Jaipur30 May 2024AY 2017-18

Bench: Learned Cit(A) When The Assessee Challenged Order Dated 11.12.2019, Which Was Passed By Learned

For Appellant: Shri Deepak Sharma (Adv.) (V.C.)For Respondent: Shri Anil Dhaka (CIT)

Section 143(3)Section 250Section 56(2)(viib)

आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”B-Bench” JAIPUR Jh jkBkSM+ deys

DCIT CC-2(3), Mumbai vs. Avinash Nivrutti Bhosale, Pune

ITA 541/MUM/2024[2009]Status: DisposedITAT Mumbai27 May 2024

Bench: Shri Narendra Kumar Billaiya, Hon'Ble & Shri Sandeep Singh Karhail, Hon'Bledcit – Central Circle – 2(3) V. Avinash Bhosale Infrastructure Pvt. Ltd., 2, Abil House, Ganesh Khind Road 8Th Floor, Room No. 803 Pune City, Pune – 411007 Old Cgo Bldg, Pratishtha Bhavan M.K. Road, Mumbai - 400020 Pan: Aabca5452C (Appellant) (Respondent)

Section 143(3)Section 271(1)(c)Section 56(2)(viib)

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “A”, MUMBAI BEFORE SHRI NARENDRA KUMAR BILLAIYA, HON'BLE ACCOUNTANT MEMBER AND

DCIT CC -2(3), Mumbai vs. Avinash Nivrutti Bhosale, Pune

ITA 540/MUM/2024[2011]Status: DisposedITAT Mumbai27 May 2024

Section 143(3)Section 271(1)(c)Section 56(2)(viib)

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “A”, MUMBAI BEFORE SHRI NARENDRA KUMAR BILLAIYA, HON'BLE ACCOUNTANT MEMBER AND

DCIT CC -2(3), Mumbai vs. Avinash Nivrutti Bhosale, Pune

ITA 539/MUM/2024[2015]Status: DisposedITAT Mumbai27 May 2024

Section 143(3)Section 271(1)(c)Section 56(2)(viib)

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “A”, MUMBAI BEFORE SHRI NARENDRA KUMAR BILLAIYA, HON'BLE ACCOUNTANT MEMBER AND

DCIT CC -2(3) Mumbai, Mumbai vs. Avinash Bhosale Infrastructure Pvt. Ltd., Pune

ITA 538/MUM/2024[2014]Status: DisposedITAT Mumbai27 May 2024

Section 143(3)Section 271(1)(c)Section 56(2)(viib)

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “A”, MUMBAI BEFORE SHRI NARENDRA KUMAR BILLAIYA, HON'BLE ACCOUNTANT MEMBER AND

Kuna Impex Pvt.Ltd., Ahmedabad vs. The Dy.CIT., Circle-2(1)(2), Ahmedabad

ITA 1053/AHD/2023[2011-12]Status: DisposedITAT Ahmedabad22 May 2024AY 2011-12

Bench: Smt. Annapurna Gupta & Shri Siddhartha Nautiyal

For Appellant: Shri Dhinal Shah, A.RFor Respondent: Shri Ravindra, Sr. DR

Section 133(6)Section 143(1)Section 148Section 56(2)(viib)Section 68

order stating that the premium received on the issuance of shares by the Appellant is a capital receipt. 1.2 The provisions of section 56(2)(viib), which pertains to the taxation of excessive share premium, was introduced starting from the Assessment Year (‘AY’) 2013-14. Consequently, it is our position

Kulbirsingh Kirpalsingh Maker, Vashi vs. Asst. Commissioner of Income Tax Circle 14 (3)(2), Mumbai

In the result, appeal of the assessee is partly allowed

ITA 287/MUM/2024[2016-17]Status: DisposedITAT Mumbai22 May 2024AY 2016-17

Bench: Us Reads As Under:-

Section 143(3)Section 50CSection 56(2)(vii)Section 56(2)(viib)

application form, but in fact, it is an agreed value as per the agreement. Once that is so, then the proviso to Section 56(2)(viib) squarely applicable which reads as under:- (vii) where an individual or a Hindu undivided family receives, in any previous year, from any person

DCIT, Circle- 3(1), New Delhi vs. Apollo Fiege Integrated Logistics Pvt. Ltd., Gurgaon

In the result, both the appeals filed by the Revenue are dismissed

ITA 7834/DEL/2019[2016-17]Status: DisposedITAT Delhi21 May 2024AY 2016-17

Bench: Shri G.S. Pannu, Hon’Ble & Shri Anubhav Sharmaassessment Year: 2015-16 Assessment Year 2016-17 Acit, Vs Apollo Fiege Integrated Circle-3(1), Logistics Pvt. Ltd., New Delhi. Plot No.20, Sector-44, Gurgaon, Haryana – 122 002. Pan: Aalca0748D (Appellant) (Respondent) Assessee By : Shri Pradeep Dinodia, Shri R.K. Kapoor & Shri Harish Dhamija, Ca’S Revenue By : Shri Zafarul Haque Tanweer, Cit- Dr Date Of Hearing : 22.02.2024 Date Of Pronouncement : 21.05.2024 Order Per Anubhav Sharma, Jm: This Appeal Is Preferred By The Revenue Against The Order Dated 31.07.2017 Of The Commissioner Of Income Tax (Appeals)-I, New Delhi, (Hereinafter Referred As Ld. First Appellate Authority Or In Short Ld. ‘Faa’) In Appeal No.722/16-17 Arising Out Of The Appeal Before It Against The Order Dated

For Appellant: Shri Pradeep DinodiaFor Respondent: Shri Zafarul Haque Tanweer, CIT- DR

Section 143(3)Section 14ASection 56(2)(viib)Section 68

shares to M/s Fiege International Beteiligungs Gmbh which owns 40% of the shareholding, the ld.CIT(A) has taken into consideration the fact that section 56(2)(viib) r.w.r. 11UA is not applicable to the shares issued to foreign companies on premium and the ld. DR could not dispute this fact

ACIT, Circle- 3(1), New Delhi vs. Apollo Fiege Integrated Logistics (P) Ltd., Gurgaon

In the result, both the appeals filed by the Revenue are dismissed

ITA 6151/DEL/2017[2015-16]Status: DisposedITAT Delhi21 May 2024AY 2015-16

For Appellant: Shri Pradeep DinodiaFor Respondent: Shri Zafarul Haque Tanweer, CIT- DR

Section 143(3)Section 14ASection 56(2)(viib)Section 68

Arafaath Exports Pvt. Ltd., Meerut vs. ITO, Ward- 1(1), Meerut

ITA 4076/DEL/2017[2013-14]Status: DisposedITAT Delhi16 May 2024AY 2013-14

Bench: Shri G.S. Pannu, Hon’Ble & Shri Anubhav Sharmaassessment Year: 2013-14 Arafaath Exports Pvt. Ltd., Vs Ito, C/O Vinod Kumar Goel, Ward-1(1), 282, Boundry Road, Meerut. Civil Lines, Meerut. Pan: Aaica3838R (Appellant) (Respondent) Assessee By : Shri Vinod Kumar Goel, Advocate Revenue By : Shri Kanav Bali, Sr. Dr Date Of Hearing : 29.02.2024 Date Of Pronouncement : .05.2024

For Appellant: Shri Vinod Kumar Goel, AdvocateFor Respondent: Shri Kanav Bali, Sr. DR

Section 143(3)Section 56Section 56(2)(viib)Section 68

book value of equity shares of the assessee was calculated at Rs.8 per share as on 31.03.2012 and, thus, AO invoked section 56(2)(viib), inserted by the Finance Act, 2012 w.e.f. 01.04.2013. The assessee claimed that provisions of section 56(2)(viib) of the Act is not applicable ... investment by existing share holder or director an addition u/s 56(2)(viib), is not justified. The objective behind the provisions of section 56(2)(viib) of the Act is to prevent unlawful gain by issuing company in the garb of capital receipts. However, in the transaction between holding

Apl Logistics Vascor Automotive Private Limited, Gurgaon vs. DCIT Circle 3(1), Delhi

ITA 2070/DEL/2023[2016-17]Status: DisposedITAT Delhi14 May 2024AY 2016-17

Bench: Shri G.S Pannu, Hon’Ble & Shri Anubhav Sharmaassessment Year: 2016-17 Apl Logistics Vascor Automotive Vs Ao, Private Limited, Cpc, 4Th Floor, Sewa Tower, Plot No.19, Bengaluru. Anath Road, Udyog Vihar Iv, Sector-18, Gurgaon, Haryana – 122 015. Pan: Aakca3524C (Appellant) (Respondent) Assessee By : Shri Akshay Ringasia, Ca Revenue By : Shri Kanav Bali, Sr. Dr Date Of Hearing : 20.02.2024 Date Of Pronouncement : 14.05.2024 Order Per Anubhav Sharma, Jm: This Appeal Is Preferred By The Assessee Against The Order Dated 01.07.2022 Of The National Faceless Appeal Centre, Delhi (Hereinafter Referred As Ld. First Appellate Authority Or In Short Ld. ‘Faa’) In Appeal No.Nfac/2018-19/10026768 Arising Out Of The Appeal Before It Against The Order Dated 08.10.2020 Passed U/S 154 Of The Income Tax Act, 1961 (Hereinafter Referred As ‘The Act’) By The Cpc Bengaluru (Hereinafter Referred To As The Ld. Ao).

For Appellant: Shri Akshay Ringasia, CAFor Respondent: Shri Kanav Bali, Sr. DR

Section 139(1)Section 143(2)Section 154Section 40Section 56(2)Section 69

premium to the tune of INR 9,31,50,000 which was in excess of valuation under Rule 11UA and was subject to section 56(2) (viib). 2.1 Against such doubts raised by the AO, the assessee submitted a point- wise reply as under:- i) With respect to non-deduction ... However, such query was never raised by the AO in the first place. iv) That the assessee was not subject to provisions of section 56(2) (viib) as the receipt was from a non-resident and such transactions were beyond the scope of section 56(2) (viib) which covered only