Section 56(1) of the Income Tax Act
Income-tax Act, 2025: s.92
Section 56(1) falls under section 56 of the Income-tax Act, 1961, which corresponds to section 92 (Income from other sources) of the Income-tax Act, 2025.
Read section 92 of the 2025 Act
Correspondence checked against the ICAI tabular mapping of the two Acts and the BharatTax.co section commentary.
The decision most relied on for Section 56(1) is Income Tax-III, Pune v. Rajasthan & Gujarati Charitable Foundation Poona (89 Taxmann.com 127), cited in 130 of the 131 judgments on BharatTax that turn on this section.
Leading authorities on Section 56(1)
The claim of depreciation under Section 32 of the Income Tax Act for assets used by charitable trusts is permissible, affirming the Bombay High Court's view that such a claim does not amount to a 'double benefit'.
The Commissioner of Income Tax (Appeals) can make enhancements to an assessment during appellate proceedings, provided such enhancements do not amount to introducing an entirely new head of income.
Depreciation is allowable on capital assets for charitable trusts even if expenditure was allowed as deduction, as long as it doesn't amount to double deduction. The principles of commercial accountancy apply when computing business income.
Deemed dividend under section 2(22)(e) is taxable in the hands of an individual shareholder, not in the hands of a firm in which the shareholder is a partner, if the firm itself is not a shareholder in the lending company.
