“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)

DCIT Circle-20(1), New Delhi vs. Process Nine Technologies (P) Ltd, New Delhi

In the result, this appeal of the Revenue stands dismissed

ITA 9310/DEL/2019[2016-17]Status: DisposedITAT Delhi02 May 2023AY 2016-17

Bench: Shri Shamim Yahya & Shri Challa Nagendra Prasad[Assessment Year: 2016-17]

Section 56(2)Section 56(2)(vi)Section 56(2)(viib)

correct at the time at which it was made, and which factor is relevant for determining the applicability or otherwise of section 56(2)(viib) and whether subsequent performance has measured upto the projections used therein. However, the above arguments were not found acceptable by the Assessing Officer and made ... method prepared by Ashwani & Associates, Chartered Accountants. Further the discounted cash flow (DC method) is the recognized method as per Section 56(2) (viib) of the Act read together with rule 11UA of the Income Tax Rules. 6.8 The Assessing Officer has rejected the DC valuation merely on the basis

ACIT, Central Circle-26, New Delhi vs. Anand Kumar Jain, New Delhi

In the result, all the appeals of the assessee are allowed and the appeals of the Revenue are dismissed

ITA 2894/DEL/2019[2016-17]Status: DisposedITAT Delhi28 Apr 2023AY 2016-17

Bench: Sh. C. M. Gargdr. B. R. R. Kumar

For Appellant: Sh. Ved Jain, Adv. &For Respondent: Sh. P. Praveen Sidharth, CIT DR

Section 153A

record. 27. We have gone through order of the ld. CIT(A) in detail. The ld. CIT(A) concurrently considered the provisions of Section 56(2)(viib) and Section 50C, report of the DVO and the stamp duty valuation (circle rates). The ld. CIT(A) held that the value

ACIT, Central Circle-26, New Delhi vs. Anand Kumar Jain, New Delhi

In the result, all the appeals of the assessee are allowed and the appeals of the Revenue are dismissed

ITA 2893/DEL/2019[2015-16]Status: DisposedITAT Delhi28 Apr 2023AY 2015-16

Bench: Sh. C. M. Gargdr. B. R. R. Kumar

For Appellant: Sh. Ved Jain, Adv. &For Respondent: Sh. P. Praveen Sidharth, CIT DR

Section 153A

ACIT, Central Circle-26, New Delhi vs. Anand Kumar Jain, New Delhi

In the result, all the appeals of the assessee are allowed and the appeals of the Revenue are dismissed

ITA 2892/DEL/2019[2014-15]Status: DisposedITAT Delhi28 Apr 2023AY 2014-15

Bench: Sh. C. M. Gargdr. B. R. R. Kumar

For Appellant: Sh. Ved Jain, Adv. &For Respondent: Sh. P. Praveen Sidharth, CIT DR

Section 153A

ACIT, Central Circle-26, New Delhi vs. Anand Kumar Jain, New Delhi

In the result, all the appeals of the assessee are allowed and the appeals of the Revenue are dismissed

ITA 2891/DEL/2019[2013-14]Status: DisposedITAT Delhi28 Apr 2023AY 2013-14

Bench: Sh. C. M. Gargdr. B. R. R. Kumar

For Appellant: Sh. Ved Jain, Adv. &For Respondent: Sh. P. Praveen Sidharth, CIT DR

Section 153A

ACIT, Central Circle-26, New Delhi vs. Anand Kumar Jain, New Delhi

In the result, all the appeals of the assessee are allowed and the appeals of the Revenue are dismissed

ITA 2890/DEL/2019[2012-13]Status: DisposedITAT Delhi28 Apr 2023AY 2012-13

Bench: Sh. C. M. Gargdr. B. R. R. Kumar

For Appellant: Sh. Ved Jain, Adv. &For Respondent: Sh. P. Praveen Sidharth, CIT DR

Section 153A

Delhi Cargo Service Center, New Delhi vs. ACIT, Circle-7(1), New Delhi

In the result, appeal of the assessee is allowed

ITA 9833/DEL/2019[2015-16]Status: DisposedITAT Delhi24 Mar 2023AY 2015-16

Bench: Shri Shamim Yahya & Ms. Astha Chandraasstt. Year: 2015-16

For Appellant: Shri Sarabjeet Singh, EmployeeFor Respondent: Shri T. James Singson, CIT,DR

Section 143(2)Section 143(3)Section 144Section 144CSection 144C(1)Section 144C(13)Section 144C(2)Section 271Section 37(1)Section 43B

including therein transfer pricing adjustment of Rs. 4,86,90,234/-; addition of Rs. 13,71,42,440/- under section 56(2)(viib) of the Act being share premium received by the assessee from domestic entities; disallowance of Rs. 12,83,016/- under section 37(1) of the Act being

DCIT, Circle-14(2), New Delhi vs. Kissandhan Agri Financial Services Pvt. Ltd., Delhi

In the result, the appeal of the Revenue is dismissed

ITA 8734/DEL/2019[2016-17]Status: DisposedITAT Delhi15 Mar 2023AY 2016-17

Bench: Shri Kul Bharat & Shri Pradip Kumar Kedia

For Appellant: Shri Atul Ninawat, CAFor Respondent: Shri Javed Akhtar, CIT-DR

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

erred in deleting the addition of Rs.36,03,10,674/- made by Assessing Officer under Section 56(2)(viib) by holding that addition with respect to change in the method of valuation is not accordance with law. 2. That on the facts and circumstances of the case ... Assessing Officer invoked NAV method as provided in Rule 11UA of the Income Tax Rules for the purposes of determination of FMV under Section 56(2)(viib) of the Act. The Assessing Officer worked out the fair market value as per NAV at Rs.11.54 per share and substituted the same

Chhattisgarh Metaliks and Alloys Pvt. Ltd., Raipur vs. Income Tax Officer -3(3), Raipur

In the result, appeal of the assessee is allowed in terms of our aforesaid observations

ITA 114/RPR/2021[2015-16]Status: DisposedITAT Raipur13 Mar 2023AY 2015-16

Bench: Shri Ravish Sood & Shri G D Padmahshaliआयकर अपील सं./ Ita No.114/Rpr/2021 "नधा"रण वष" / Assessment Year : 2015-16 Chhattisgarh Metaliks & Alloys Private Limited Mohini B-5, Merlin Jayashree Vihar, Mandi Gate, Pandri Tarai, Raipur (C.G.)-492 001 Pan : Aadcc9242J .......अपीलाथ" / Appellant बनाम / V/S. The Income Tax Officer-3(3), Raipur (C.G.) ……""यथ" / Respondent

For Appellant: Shri Abhishek Mahawar, CAFor Respondent: None

Section 143(2)Section 143(3)Section 271(1)(c)Section 56(2)(viib)Section 68

stated by the Ld. AR, 8 Chhattisgarh Metaliks and Alloys Private Limited Vs. ITO-3(3), Raipur and, rightly so, the provisions of section 56(2)(viib) of the Act in the backdrop of the facts of the case before us could not have been triggered. 15. At this stage

Planet Gogo Private Ltd., Gurgaon vs. ITO Ward-3(2), Gurgaon

In the result, the appeal is allowed

ITA 1526/DEL/2022[2016-17]Status: DisposedITAT Delhi24 Feb 2023AY 2016-17

Bench: Shri Saktijit Deyassessment Year: 2016-17

Section 56(2)Section 56(2)(viib)

Delhi pertaining to assessment year 2016-17. 2. The dispute in the present appeal is confined to addition of Rs.48,63,880 under Section 56(2) (viib) of the Income-Tax Act,1961. 2 ITA No.1526/Del./2022 3. Briefly, the facts are, the assessee is a corporate entity carrying ... learned counsel appearing for the assessee submitted that M/s. NBM Investment Fund ALP is a non resident entity, hence, the provisions of section 56(2)(viib) would not be applicable. In support of such contention, he relied upon a decision of the Tribunal in case of M/s. Ruchi

ACIT, Circle-7(2), New Delhi vs. Drishti Soft Solutiions Private Limited, New Delhi

In the result, appeal of the Revenue is dismissed

ITA 8523/DEL/2019[2016-17]Status: DisposedITAT Delhi10 Feb 2023AY 2016-17

Bench: Sh. Anil Chaturvedi & Sh. Yogesh Kumar Usacit Vs. Drishti Soft Solutions Pvt. Circle – 7(2), Ltd., F-2, 40 Feet Road, New Delhi Ganga Vihar, Gokulpur, New Delhi – 110 094 Pan No. Aabcd 9373 R (Appellant) (Respondent) Assessee By Shri K. M. Gupta, Adv. & Shri Rishabh Malhotra, A.R. Revenue By Shri T. James Singson, Cit-D.R. Date Of Hearing: 06.02.2023 Date Of Pronouncement: 10.02.2023 Order Per Anil Chaturvedi, Am : This Appeal Filed By The Revenue Is Directed Against The Order Dated 19.09.2019 Of The Commissioner Of Income Tax (Appeals)-3, New Delhi Relating To Assessment Year 2016-17. 2. Brief Facts Of The Case As Culled Out From The Material On Record Are As Under :-

Section 143(3)Section 37(1)Section 56(2)(viib)

order of AO, assessee carried the matter before CIT(A). Before CIT(A), assessee inter alia contended that the provision of Section 56(2)(viib) of the Act are not applicable in view of the proviso of Section 56(2)(viib) of the Act. It was submitted that the provision ... Section 56(2)(viib) of the Act would not be applicable where the consideration for issue of share is received by a venture capital undertaking from venture capital company or venture capital fund. It was further submitted that assessee was a venture capital undertaking, the investor was granted registration

Sng Metals Private Limited, Faridabad vs. ITO Ward-2(4), Faridabad

Appeal are allowed for statistical purposes

ITA 7450/DEL/2019[2015-16]Status: DisposedITAT Delhi08 Feb 2023AY 2015-16

Bench: Shri Kul Bharat[Assessment Year: 2015-16

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

That the Learned CIT(A) and the Learned 1T0 grossly erred in making addition of Rs. 3507000/ by applying the provisions of section 56(2) (viib) of the Act without appreciating the fact that all the shares are issued to the family members and since it is a closely held ... intends to Tax only Income and not capital receipts the share premium received is a capital receipt and cannot be taxed under Section 56 (2) (viib) of the Act. 4. That provisions of Section 56(2)(viib) of the Act creates a deeming fiction and while giving effect to such

DCIT, Circle-2(1)(1), Surat vs. M/S. R K Shah Projects Pvt. Ltd, Surat

In the result, ground no.2 raised by the Revenue is allowed for statistical purposes

ITA 55/SRT/2020[2013-14]Status: DisposedITAT Surat31 Jan 2023AY 2013-14

Bench: Shri Pawan Singh, Jm & Dr. A.L.Saini, Am आयकर अपील सं./Ita No.55/Srt/2020 (िनधा"रण वष" / Assessment Year: (2013-14) (Physical Court Hearing) Deputy Commissioner Of Income M/S R.K.Shah Projects Pvt. Ltd., 1St Floor, Aditya Complex, Nr. Tax., Circle-2(1)(1), Room No.216, Vs. Kapadia Health Club, Bhatar Road, 2Nd Floor, Aayakar Bhavan, Majura Surat-395007 Gate, Surat-395001 "थायीलेखासं./जीआइआरसं./Pan/Gir No.: Aabcr 8584 Q (Appellant ) (Respondent)

For Appellant: Shri Sapnesh R Seth, C.AFor Respondent: Shri Ashok B. Koli– CIT-DR

Section 143(3)Section 68

transactions were not proved. 12. The Ld DR also stated that addition on account of protective addition made on account of provisions of section 56(2) (viib) at Rs.1,54,452/- has not been discussed and adjudicated by ld CIT(A) which is part of share capital and share premium ... shares was equal to Rs.1,54,452/- and so addition of Rs.1,54,452/-was made on account of provisions of section 56(2)(viib) of the I.T Act, 1961. The assessee company had furnished statement showing working of the book value of shares. It is reported in the remand

Abhinav International Pvt. Ltd., New Delhi vs. DCIT Circle-1(1), New Delhi

In the result, appeal of appellant bearing Appeal

ITA 7822/DEL/2019[2013-14]Status: DisposedITAT Delhi23 Jan 2023AY 2013-14

Bench: Shri Chandra Mohan Garg & Shri Pradip Kumar Kedia

For Appellant: NoneFor Respondent: Shri Kanav Bali, Sr.DR

Section 143(3)Section 14ASection 271(1)(c)Section 56(2)(viib)

counts. (i) Disallowance of Rs.365546/- under Section 14A (ii) Disallowance of interest of Rs.60,72,432/- (iii) Addition of Rs.34,38,000/- under Section 56(2)(viib) I.T.A No.7822/Del/2019 2 and; (iv) Interest on late deposit of TDS wrongly claimed at Rs.6,578/- 2.1 The CIT(A) concluded in paragraph ... case. 7.3 Considering the facts of the case, I am of the view that no penalty should be imposed on disallowance u/s. 14A. Section 56(2)(viib) is an anti abuse provision and any addition u/s. 56(2)(viib) is liable for penalty u/s. 271(1)(c). As regards

Komal Indstries Pvt. Ltd., Surat vs. The Principal Commissioner of Income Tax, Surat

In the result, appeal filed by the assessee is dismissed

ITA 99/SRT/2022[2017-18]Status: DisposedITAT Surat23 Jan 2023AY 2017-18

Bench: Shri Pawan Singh, Jm & Dr. A. L. Saini, Am आयकर अपील सं./Ita No.99/Srt/2022 िनधा"रण वष"/Assessment Year: (2017-18) (Physical Court Hearing) Komal Industries Pvt. Ltd., Vs. Principal Commissioner Of Income B-904, International Commerce Tax-1, Aaykar Bhawan, Nr. Majura Centre, Ring Road, Near Gate, Opp New Civil Hospital, Kadiwala School, Surat–395002. Surat-395001 "थायीलेखासं./जीआइआरसं./Pan/Gir No.: Aadck6228Q (Appellant) (Respondent) िनधा"रती क" ओर से /Assessee By None (Written Submissions) राज"व क" ओर से /Respondent By Shri Ashok B. Koli, Cit-Dr सुनवाई क" तारीख/Date Of Hearing 05/01/2023 उ"ोषणा क" तारीख/Date Of Pronouncement 23/01/2023

Section 143(3)Section 263Section 44ASection 56(2)(viib)

Rs.1,49,60,000/- received during the year was liable to be treated as income from the other sources under the provisions of section 56(2)(viib) of the Income Tax Act and tax was required to be levied accordingly. The Assessing Officer [herein after referred ... assessee during the assessment proceedings is not valid as per the definition of Accountant provided in Income Tax Rules for the purpose of section 56(2)(viib) of the I.T. Act. The AO has accepted the same without due application of mind and without causing inquiry to determine the fair

Punyah Building Materials Pvt. Ltd., Faridabad vs. ITO Ward 2(1), Faridabad

In the result, the appeal of the assessee is allowed

ITA 6171/DEL/2019[2015-16]Status: DisposedITAT Delhi19 Jan 2023AY 2015-16

Bench: Dr. B. R. R. Kumar & Sh. Yogesh Kumar U.S.

Section 143(1)Section 143(3)Section 251Section 56(2)(viib)Section 68

well as on facts in enhancing the income of appellant assessee by sum of Rs. 75,20,000/- by invoking section 56(2)(viib) of the Act wherein rejecting the valuation method taken by appellant assessee. 5. The Ld. CIT(A) has erred in law as well as on facts ... allowed. 18. Ground No. 4 is regarding enhancing the income of the assessee by sum of Rs. 75,20,000/- by invoking Section 56(2) (viib) of the Act by rejecting valuation method taken by the assessee. According to the Ld. A.O, the value 12 Punyah Building Materials

Getvee Technologies Private Limited, Delhi vs. ACIT Circle-1, Noida

ITA 6856/DEL/2019[2015-16]Status: DisposedITAT Delhi18 Jan 2023AY 2015-16

Bench: Shri Shamim Yahya & Ms. Astha Chandra[Assessment Year: 2015-16]

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

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH, ‘B’: NEW DELHI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND Ms. ASTHA

DCIT, Circle- 13(2), New Delhi vs. Jovees Herbal Care (I) Ltd., Delhi

In the result, appeal of the Revenue is 11

ITA 2528/DEL/2019[2014-15]Status: DisposedITAT Delhi16 Jan 2023AY 2014-15

Bench: Shri Anil Chaturvedi & Shri Anubhav Sharma

For Appellant: Shri Vinay Kumar, CAFor Respondent: Shri Anuj Garg, Sr. DR

Section 143(3)Section 56(2)

assessee had made projections of turnover and profit which were far away of reality. AO was further of the view that provisions of section 56(2) (viib) states about the receipt of money in any previous year and thus according to him the year of receipt of consideration ... shares taking into account the market value of its assets, including intangible assets. It is clearly mentioned in the provisions of section 56(2)(viib) of the Act that the amount exceeding the fair market value of shares has to be treated as income. As per explanation, the fair market

Sagitarius Securities P.Ltd, New Delhi vs. ITO, Ward-22(2), New Delhi

In the result, the appeal of the assessee in ITA No

ITA 6353/DEL/2018[2014-15]Status: DisposedITAT Delhi05 Jan 2023AY 2014-15

Bench: Shri N.K. Billaiya & Shri Kul Bharat

For Appellant: Shri Anunav Kumar, AdvFor Respondent: Ms. Maninder Kaur, Sr. DR

Section 224Section 56(2)(viib)

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI ‘G’ BENCH, NEW DELHI BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER, AND SHRI KUL

Grameen Impact Investment India Pvt Ltd, Mumbai vs. National -E Assessment Centre, Delhi

In the result, all the three appeals of the assessee are allowed

ITA 2375/MUM/2022[2018-19]Status: DisposedITAT Mumbai29 Dec 2022AY 2018-19

Bench: Shri Aby T Varkey () & Shri Om Prakash Kant () Assessment Year: 2018-19 Grameen Impact Investments India National-E-Assessment Pvt. Ltd., Centre, 306, 3Rd Floor, A Wing, Devroop Vs. New Delhi-110 001. Building, 36, Turner Road, Bandra West, Mumbai-400050. Pan No. Aaacr 9005 R Appellant Respondent Assessee By : Mr. K. Shivaram & Mr. Shashi Bekal, Ars : Revenue By Mr. Satyapal Kumar, Dr Date Of Hearing : 19/12/2022 Assessment Year: 2015-16 & Assessment Year: 2016-17 Grameen Impact Investments India Dy. Cit-13(3)(1), Pvt. Ltd., Room No. 229, Aayakar 306, 3Rd Floor, A Wing, Devroop Vs. Bhavan, M.K. Road, Building, 36, Turner Road, Bandra Mumbai-400050. West, Mumbai-400050. Pan No. Aaacr 9005 R Appellant Respondent

For Appellant: Mr. K. Shivaram & Mr. Shashi

Section 56

violation of Principles of Natural Justice violation of Principles of Natural Justice i.e., Audi Alteram i.e., Audi Alteram Partem. 2. Addition under section 56 (2)(viib) of the Income Addition under section 56 (2)(viib) of the Income-tax Act, Addition under section 56 (2)(viib) of the Income ... addition under law, the NFAC has erred in confirming the addition under law, the NFAC has erred in confirming the addition under section 56 (2)(viib) of the Act to the tune section 56 (2)(viib) of the Act to the tune