Section 56(2)(vii)(c) of the Income Tax Act

Income-tax Act, 2025: s.92

Section 56(2)(vii)(c) 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(2)(vii)(c) is Sudhir Menon HUF v. ACIT (45 Taxmann.com 176), cited in 21 of the 57 judgments on BharatTax that turn on this section.

Leading authorities on Section 56(2)(vii)(c)

Sudhir Menon HUF v. ACIT
45 Taxmann.com 176 · 2014 · ITAT
21
citing judgments

Section 56(2)(vii)(c) does not apply to additional shares allotted pro rata to existing shareholders, as there is no scope for any property being received in such a situation.

CIT v. Dalmia Investment Co. Ltd.
52 ITR 567 · 1964 · Supreme Court
18
citing judgments

Bonus shares are akin to splitting existing shares, not a receipt of new property. Therefore, there is no accretion of wealth or gift involved in their issuance.

CIT v. Jalan Hard Coke Ltd.
95 Taxmann.com 330 · 2018 · High Court
17
citing judgments

An addition made to income for unexplained share capital is unsustainable if the assessee fails to produce the share applicants, as the assessee cannot be tasked with finding those individuals.

Khoday Distilleries Ltd. v. CIT
307 ITR 312 · 2008 · Supreme Court
17
citing judgments

The term 'allotment of shares' signifies the appropriation of previously unappropriated capital, and shares only come into existence upon such allotment. This principle is relevant for understanding the issuance of bonus shares.

M.J. Siwani v. CIT
53 Taxmann.com 318 · 2015 · Supreme Court
14
citing judgments

The dismissal of a Special Leave Petition (SLP) by the Supreme Court does not, in itself, constitute a judgment affirming the High Court's decision. It signifies that the Supreme Court did not find sufficient grounds to interfere with the High Court's findings.

54 of the Act.: 1. Ashok G. Chauhan v. Asstt. CIT
105 Taxmann.com 204 · 2019 · Reported
10
citing judgments

An assessee claiming deduction under Section 54F is not disentitled if they are a co-owner of another residential property, as fractional ownership does not violate the conditions of the section.

Hunsur Plywood Works Ltd. v. CIT
229 ITR 112 · 1998 · Supreme Court
10
citing judgments

The issuance of bonus shares is merely a capitalization of profits and does not constitute a distribution of profits or a gift to shareholders, as they are essentially receiving certificates entitling them to participate in the company's reserves as part of the capital.

Kumar Pappu Singh v. DCIT
101 Taxmann.com 122 · 2019 · Reported
7
citing judgments
Khoday Distilleries Ltd. v. CIT & Anr.
176 Taxmann 142 · 2009 · Supreme Court
6
citing judgments
Mukesh Arvindlal Vakharia v. ITO
153 Taxmann.com 55 · 2023 · Reported
5
citing judgments

Judgments on Section 56(2)(vii)(c)

Jonnalagadda Venkata Giri, Visakhapatnam vs. ACIT, Central Circle-1, Visakhapatnam

In the result, appeal of the assessee is allowed

ITA 665/VIZ/2025[2014-15]Status: DisposedITAT Visakhapatnam31 Aug 2026AY 2014-15
Section 148Section 56(2)(vii)

Sarita Shetty, Bengaluru vs. Deputy Commissioner of Income Tax, Circle-7(1)(1), Bangalore

In the result, the appeal filed by the assessee is partly allowed

ITA 2053/BANG/2025[2015-16]Status: DisposedITAT Bangalore24 Aug 2026AY 2015-16

Bench: Shri Prashant Maharishi & Shri Soundararajan K.

For Appellant: AHEPS6123R
Section 147Section 234Section 56

Mona Amarchand Narang, Mumbai vs. Income Tax Officer Ward 23(2)(1), Mumbai

In the result, appeal of the assessee is allowed

ITA 1537/MUM/2026[2016-17]Status: DisposedITAT Mumbai06 Jul 2026AY 2016-17

Bench: Shri Amit Shukla & Shri Prabhash Shankarmona Amarchand Narang V/S. Income Tax Officer, Ward– 401, Narang Manor, Plot No. बनाम 23(2)(1), Piramal Chambers, Lal 96-B, 15Th Road, Bandra(W), Baug, Mumbai – 400 012, Mumbai – 400 050, Maharashtra Maharashtra स्थायी लेखा सं./जीआइआर सं./ Pan/Gir No: Aaapn4852D Appellant/अपीलाथी .. Respondent/प्रतिवादी

For Appellant: Ms. Rutuja Pawar & Ms. Pranaya Muthathyan, ARsFor Respondent: Shri Swapnil Choudhari,(Sr. DR)
Section 143(2)Section 147Section 148Section 151Section 151ASection 250(6)Section 56(2)Section 56(2)(vii)

Puneet Jain, Lucknow vs. DCIT/ACIT-3, Lucknow

In the result, the appeal of the assessee is allowed for statistical purposes

ITA 775/LKW/2025[2015-16]Status: DisposedITAT Lucknow27 May 2026AY 2015-16

Bench: Shri Kul Bharat & Shri Anadee Nath Misshraassessment Year: 2015-16 Puneet Jain V. Dcit/Acit-3 5, Park Road, Hazratganj, Lucknow-New, Uttar Lucknow-226001. Pradesh-226024. Pan:Aalpj0419K (Appellant) (Respondent) Appellant By: Shri Ashwani Kumar, C.A. Respondent By: Shri Amit Kumar, Cit(Dr) Date Of Hearing: 05 05 2026 Date Of Pronouncement: 27 05 2026 O R D E R

For Appellant: Shri Ashwani Kumar, C.AFor Respondent: Shri Amit Kumar, CIT(DR)
Section 143(2)Section 143(3)Section 148Section 56(2)(vii)Section 56(2)(viia)

ACIT, Central Circle-1, Thane vs. Kanchan Rakesh Markhedkar, Thane

In the result, the appeals filed by the Revenue for both the assessment years are dismissed

ITA 784/MUM/2025[2016-17]Status: DisposedITAT Mumbai15 May 2026AY 2016-17
Section 132Section 143(3)Section 153ASection 250Section 56(2)(vii)

ACIT, Central Circle-1, Thane vs. Kanchan Markhedkar, Thane

In the result, the appeals filed by the Revenue for both the assessment years are dismissed

ITA 713/MUM/2025[2015-16]Status: DisposedITAT Mumbai15 May 2026AY 2015-16
Section 132Section 143(3)Section 153ASection 250Section 56(2)(vii)

Hitendrasinh Chandrasinh Bakrola, Surat vs. ITO, Ward 2(3)(2), Surat

In the result, the appeal of the assessee is allowed

ITA 1279/SRT/2024[2017-18]Status: DisposedITAT Surat06 Apr 2026AY 2017-18

Bench: Dr. Brr Kumar, Hon’Ble & Ms. Suchitra Kambleassessment Year 2017-18

For Appellant: Shri Mehul Shah, C.AFor Respondent: Shri Ajay Uke, Sr. D.R
Section 115BSection 68

Thanushkodi Narayanan, Chennai vs. DCIT, Central Circle-3(2), Chennai

ITA 2577/CHNY/2025[2018-19]Status: DisposedITAT Chennai09 Mar 2026AY 2018-19

Bench: This Tribunal.

Section 132Section 142Section 142(1)Section 143(2)Section 153A

Thanushkodi Narayanan, Chennai vs. DCIT, Central Circle-3(2), Chennai

ITA 2570/CHNY/2025[2011-12]Status: DisposedITAT Chennai09 Mar 2026AY 2011-12

Bench: This Tribunal. 2. Since, The Facts Are The Identical Across All The Appeals / For All The Assessment Years, Except For The Nature Of The Additions / Disallowances Varying In Few Of The Assessment Year(S) Before This Tribunal In The Present Batch Of 6 Appeals, The Appeal Arising From The A.Y. 2012-13 Is Being Taken Up As The Lead Case With The Consent Of The Both The Ld. Ar As Well As The Departmental Representatives. 3. The Brief Fact Of The Present Case Is That The Assessee, Shri Thanushkodi Narayanan, Is The Managing Director Of M/S.Annai Builders Real Estates Pvt Ltd. The Assessee Filed His Original Return Of Income For The A.Y. 2012-13 On 27.09.2012 In Declaring A Total Income Of Rs.24,87,430/-. 4. A Search & Seizure Operation Was Carried Out In Terms Of Section 132 Of The Act On 04.10.2017 In The Residential Premises Of The Assessee & Also In The Premises Of M/S.Annai Builders Real Estates Pvt. Ltd. In Which The Assessee Is The Managing Director. 5. Thereafter, A Notice U/S.153A Of The Act For The A.Y.2012-13 Was Issued On 25.09.2018 To The Assessee By The Assessing Officer (In Short “Ao”) & In Response To The Same, The Assessee Had Filed E-Return Of Income For The A.Y. 2012-13 On 17.08.2019 In Declaring Total Income Of Rs.14,53,440/-. :-3-:

Section 132Section 142Section 142(1)Section 143(2)Section 153A

Jothi Narayanan, Chennai vs. DCIT, Central Circle-2(2), Chennai

ITA 2569/CHNY/2025[2011-12]Status: DisposedITAT Chennai09 Mar 2026AY 2011-12

Bench: This Tribunal.

Section 132Section 142Section 142(1)Section 143(2)Section 153A

Sasikala Krishnasamy, Chennai vs. ITO, Corporate Ward-5(2), Chennai

In the result, the appeal filed by the assessee allowed for statistical purposes

ITA 2558/CHNY/2025[2014-15]Status: DisposedITAT Chennai07 Jan 2026AY 2014-15

Bench: Shri George George K & Shri S.R. Raghunathaआयकर अपील सं./Ita No.: 2558/Chny/2025 िनधा"रण वष"/Assessment Year: 2014-15 Ms. Sasikala Krishnasamy, The Income Tax Officer, 1/40, Kpcm Colony, Vs. Corporate Ward 5(2), St. Thomas Mount, Chennai. Chennai -600 016. Pan: Bknpk 9425K (अपीलाथ"/Appellant) (""यथ"/Respondent) अपीलाथ" क" ओर से/Appellant By : Shri S. Sundar Raman, Ca & Shri R. Srivatsan, Advocate ""यथ" क" ओर से/Respondent By : Ms. Gouthami Manivasagam, Addl.Cit सुनवाई क" तारीख/Date Of Hearing : 06.01.2026 घोषणा क" तारीख/Date Of Pronouncement : 07.01.2026

For Appellant: Shri S. Sundar Raman, CA &For Respondent: Ms. Gouthami Manivasagam
Section 143(2)Section 148Section 250Section 56(2)(vii)

Kayum Razak Dhanani, Bangalore vs. Deputy Commissioner of Income Tax, Central Circle-2(2), Bengaluru

Appeal of the assessee is allowed

ITA 634/BANG/2024[2015-16]Status: DisposedITAT Bangalore24 Nov 2025AY 2015-16

Bench: Shri Prashant Maharishi & Shri Soundararajan K.Assessment Year: 2015-16

For Appellant: Shri V. Chandrashekar, AdvocateFor Respondent: Shri Shivanand Kalakeri, CIT(DR)(ITAT), Bengaluru
Section 127Section 132Section 139Section 143Section 143(3)Section 153ASection 56(2)(vii)

Jaipal Jain, Haryana vs. DCIT, Central Circle, Karnal

In the result, appeal of

ITA 4914/DEL/2024[2019-20]Status: DisposedITAT Delhi17 Sept 2025AY 2019-20

Bench: Sh. Sudhir Kumar & Sh. Manish Agarwal

Section 143(3)Section 153ASection 153DSection 49(4)Section 56(2)(vii)

Vyankatesh Narayan Kulkarni, Thane vs. Income Tax Officer, Range 3(4), Thane

ITA 1849/MUM/2025[2015-16]Status: DisposedITAT Mumbai11 Sept 2025AY 2015-16

Bench: Shri Om Prakash Kant () & Ms. Suchitra Raghunath Kamble () Assessment Year: 2015-16 Vyankatesh Narayan Kulkarni, Ito-3(4), 301 Sunflower Tower, Kharkar Ali Ashar It Part, 6Th Floor, Road No. Vs. Road, Parvati Bhavan, 16Z, Wagle Industrial Estate, Thane West-400604. Thane West-400604. Pan No. Agmpk 6406 E Appellant Respondent

For Respondent: Mr. Dharmesh Shah/Ms. Mitali
Section 56(2)Section 56(2)(vii)Section 68

ACIT Central Circle-1, Faridabad vs. Sohan Lal Singla, New Delhi

Appeal is dismissed

ITA 8433/DEL/2019[2012-13]Status: DisposedITAT Delhi25 Aug 2025AY 2012-13

Bench: Sh. Satbeer Singh Godara & Sh. Manish Agarwalita No. 8433/Del/2019 : Asstt. Year : 2012-13 Acit, Vs Sohan Lal Singla, Central Circle-1, 31, Punjabi Bagh, West Avenue, Faridabad, Haryana-121001 New Delhi-121001 (Appellant) (Respondent) Pan No. Aezps1205E Assessee By : Sh. G. C. Srivastava, Adv. & Sh. Kalrav Malhotra, Adv. Revenue By : Ms. Monika Singh, Cit-Dr Date Of Hearing: 17.07.2025 Date Of Pronouncement: 25.08.2025 Order Per Satbeer Singh Godara: This Revenue’S Appeal For Assessment Year 2012-13, Arises Against The Cit(A)-3, Gurgaon’S In Case No. 347/Cit(A)- 3/Ggn/2017-18 Dated 14.08.2019, In Proceedings U/S 153A Of The Income Tax Act, 1961 (In Short “The Act”).

For Appellant: Sh. G. C. Srivastava, Adv. &For Respondent: Ms. Monika Singh, CIT-DR
Section 153ASection 56(2)(vii)

DCIT Central Circle 05, Delhi vs. Deepak Kothari, Kanpur

In the result, the appeal filed by the assessee is allowed

ITA 1834/DEL/2021[20017-18]Status: DisposedITAT Delhi06 Aug 2025

Bench: SHRI S. RIFAUR RAHMAN (Accountant Member), SHRI VIMAL KUMAR (Judicial Member)

For Appellant: Dr. Rakesh Gupta, AdvocateFor Respondent: Shri Dayainder Singh Sidhu, CIT DR
Section 143(3)Section 49(4)Section 56(2)(vii)

Deepak Kathari, Kanpur vs. ACIT, CC-5, New Delhi

In the result, the appeal filed by the assessee is allowed

ITA 1205/DEL/2021[2017-18]Status: DisposedITAT Delhi06 Aug 2025AY 2017-18

Bench: SHRI S. RIFAUR RAHMAN (Accountant Member), SHRI VIMAL KUMAR (Judicial Member)

For Appellant: Dr. Rakesh Gupta, AdvocateFor Respondent: Shri Dayainder Singh Sidhu, CIT DR
Section 143(3)Section 49(4)Section 56(2)(vii)

Smt. Prema Mukesh Jhalani, Mumbai vs. ITO Ward 3(2), Thane

In the result the appeal filed by the assessee stands allowed

ITA 4753/MUM/2024[2011-12]Status: DisposedITAT Mumbai16 Jun 2025AY 2011-12

Bench: Hon‟Ble Shri Vikram Singh Yadav & Shri Sandeep Gosainsmt. Prema Mukesh Jhalani Vs. Ito, Ward 3(2) 1 A/34, Drugs Society, Opp. Room No. 4, 6Th Floor, Jk Gram, Samatha Nagar B-Wagle Estate, Midc, Pokhran Road No. 1 Thane (W) Thane (W). Pan/Gir No. Aaupj0472D (Applicant) (Respondent) Assessee By Shri Nishit Gandhi Revenue By Shri Chetan M. Kacha, (Sr. Dr) Date Of Hearing 23.04.2025 Date Of Pronouncement 16.06.2025 आदेश / Order Per Sandeep Gosain, Jm: The Present Appeal Has Been Filed By The Assessee Challenging The Impugned Order 22.08.2024 Passed U/S 250 Of The Income Tax Act, 1961 („The Act‟), By The National Faceless Appeal Centre, Delhi (Nfac) For The Assessment Year 2011-12. 2. All The Grounds Raised By The Assessee Are Interrelated & Interconnected & Relates To Challenging The Order Of Ld. Cit(A) In Upholding The Order Of Ao In Reopening The 2 Smt. Prema Mukesh Jhalani, Mumbai

Section 250Section 56Section 56(2)(vii)

ACIT Circle-28(1), New Delhi vs. Ajay Singh, New Delhi

In the result, appeal of Revenue is allowed for statistical purpose

ITA 912/DEL/2020[2015-16]Status: DisposedITAT Delhi30 May 2025AY 2015-16

Bench: Shri Vikas Awasthy & Shri Avdhesh Kumar Mishraआअसं.912/िद"ी/2020(िन.व. 2015-16) Assistant Commissioner Of Income Tax, Circle 28(1), R. No. 1001, 10Th Floor, E-2, Block, Pratyaksh Kar Bhawan, Civic Centre, ...... अपीलाथ"/Appellant J L Nehru Marg, New Delhi 110002 बनाम Vs. Ajay Singh, B-1, Kalindi Colony, New Delhi 110065 ..... "ितवादी/Respondent Pan: Abjps-9222-J Assessee By : None Department By : Shri Javed Akhtar, Cit(Dr) सुनवाई क" ितिथ/ Date Of Hearing : 03.03.2025 घोषणा क" ितिथ/ Date Of Pronouncement : : 30.05.2025 आदेश/Order Per Vikas Awasthy, Jm: This Appeal By The Revenue Is Directed Against The Order Of Commissioner Of Income Tax (Appeals)-10, New Delhi (Hereinafter Referred To As 'The Cit(A)') Dated 06.12.2019, For Assessment Year 2015-16. 2. The Revenue In Appeal Has Assailed The Order Of Cit(A) By Raising Following Grounds:-

For Appellant: NoneFor Respondent: Shri Javed Akhtar, CIT(DR)
Section 147Section 56(2)(vii)Section 56(2)(viii)

Rajkanwar Kataria, Chennai vs. ITO, Ncw-10(5), Chennai

In the result, the appeals of the assesse is allowed for statistical purposes

ITA 441/CHNY/2025[2016-17]Status: DisposedITAT Chennai30 Apr 2025AY 2016-17

Bench: Shri George George K & Shri Amitabh Shuklaआयकर अपील सं./Ita No.441/Chny/2025 Assessment Years: 2016-17 Mrs.Rajkanwar Kataria, Income Tax Officer, Tower No.4, Flat No.G-03, No.4,5,6 Non-Corporate Ward-10(5), North Town Estate, Binny Mills, Chennai. Stephenson Road, Jamlaia, Chennai-600 012. [Pan: Aalpk5671N] (अपीलार्थी/Appellant) (प्रत्यर्थी/Respondent) अपीलार्थी की ओर से/ Assessee By : Shri M.Murugaboopathy, Advocate प्रत्यर्थी की ओर से /Revenue By : Ms.Gowthami Manivasagam, Jcit सुनवाई की तारीख/Date Of Hearing : 23.04.2025 घोषणा की तारीख /Date Of Pronouncement : 30.04.2025 आदेश / O R D E R Per Amitabh Shukla, A.M :

For Appellant: Shri M.Murugaboopathy, AdvocateFor Respondent: Ms.Gowthami Manivasagam, JCIT
Section 234ASection 50CSection 56(2)(vii)