Section 13(2)(b) of the Income Tax Act
Income-tax Act, 2025: ss.332–355
Section 13(2)(b) falls under section 13 of the Income-tax Act, 1961, which corresponds to sections 332 to 355 of the Income-tax Act, 2025, the provisions on registered non-profit organisations.
Correspondence checked against the ICAI tabular mapping of the two Acts and the BharatTax.co section commentary.
The decision most relied on for Section 13(2)(b) is Sudhir Kumar Shah (HUF) v. CIT-III, Ludhiana) (224 Taxmann 178), cited in 38 of the 38 judgments on BharatTax that turn on this section.
Leading authorities on Section 13(2)(b)
The addition of cash deposits to an assessee's income is justified under Section 68 if the assessee fails to explain the nature and source of these deposits. The onus is on the assessee to provide such an explanation.
Unexplained cash deposits in a bank account can be added to income under Section 68, even if the assessee does not maintain formal books of account, and a passbook can be considered a book of account.
For the purposes of Section 13(1)(c) of the Income Tax Act, the term 'benefit' extends beyond pecuniary advantages to include any intangible and indirect benefit.
The real income of a trust, not deemed income, is to be considered for accumulation. Deductions allowable in a normal commercial manner should be applied before determining the income to be excluded.
Rent received from specified concerns is considered adequate if it is legally sufficient and reasonably so, not necessarily what is determined as market value by another party, unless the price is unconscionable.
