Section 56(2)(viia) of the Income Tax Act

Income-tax Act, 2025: s.92

Section 56(2)(viia) 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)(viia) is DSJ Communication v. DCIT (222 Taxmann 129), cited in 22 of the 102 judgments on BharatTax that turn on this section.

Leading authorities on Section 56(2)(viia)

DSJ Communication v. DCIT
222 Taxmann 129 · 2014 · High Court
22
citing judgments

Reopening of assessment under Section 147 is invalid if mandatory sanction or approval under Section 151 is not obtained from the prescribed authority. The AO must apply their mind and not proceed in a mechanical manner.

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.

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.

CIT v. Selan Exploration Technology Ltd.
188 Taxmann 1 · 2010 · High Court
11
citing judgments

Expenses incurred for buyback of shares are an allowable business expense for the purpose of computation of income. Such expenditure is not in the nature of capital expenditure and is not required to be capitalised.

Vora Financial Services (P) Ltd. v. ACIT
96 Taxmann.com 88 · 2018 · ITAT
10
citing judgments

Shares bought back by a company are not considered the property of the assessee for the purpose of Section 56(2)(viia), as a company cannot hold its own shares as property.

Agro Portfolio Private Limited v. PCIT
161 Taxmann.com 303 · 2024 · High Court
7
citing judgments
PCIT v. Merck Ltd.
120 Taxmann.com 361 · 2020 · High Court
7
citing judgments
Khoday Distilleries Ltd. v. CIT & Anr.
176 Taxmann 142 · 2009 · Supreme Court
6
citing judgments
Vora Financial Services (P.) Ltd. v. Asstt. CIT, Mumbai by the ITAT, Mumbai Bench
171 ITD 646 · 2018 · ITAT
5
citing judgments
88 (Mumbai) 2.VITP (P.) Ltd. v. DCIT
150 Taxmann.com 523 · 2023 · Reported
3
citing judgments

Judgments on Section 56(2)(viia)

Shail Gas Pvt Ltd, Ghazaibad vs. Pr.CIT -7, New Delhi

In the result, the appeal of the assessee is allowed

ITA 630/DEL/2021[2015-16]Status: DisposedITAT Delhi05 Aug 2024AY 2015-16

Bench: Dr. B. R. R. Kumar, Sh. Sudhir Kumar

For Appellant: Sh. Akhilesh Kumar, Adv. &For Respondent: Ms. Sapna Bhatia, CIT-DR
Section 133(6)Section 142(1)Section 143(2)Section 143(3)Section 14ASection 263Section 56(2)(via)

Pr. Commissioner of Income Tax (Central)-2 vs. M/S Electrical and Electronics India Ltd

ITA - 382 / 2024HC Delhi24 Jul 2024
Section 2(18)(b)Section 56(2)(viia)

The Pr. Commissioner of Income Tax -Central -1 vs. Aamby Valley Ltd

ITA/849/2019HC Delhi19 Jul 2024

Bench: HON'BLE MR. JUSTICE RAVINDER DUDEJA,HON'BLE MR. JUSTICE YASHWANT VARMA

Section 115JSection 14ASection 28Section 36(1)(iii)Section 47Section 56(2)(viia)

Indian Durobuild (P) Ltd., New Delhi vs. Vijay, PCIT, Delhi-04, Delhi

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

ITA 1447/DEL/2021[2015-2016]Status: DisposedITAT Delhi05 Jul 2024AY 2015-2016

Bench: Shri G. S. Pannu & Ms. Madhumita Royi.T.A. No. 1447/Del/2021 (Assessment Year : 2015-16) Indian Durobuild (P.) Ltd. Vs. Pcit Pra Tax India D-28, Delhi - 4 South Extension, Part-I, New Delhi-53 Pan: Aaacs 6592 G (Appellant) .. (Respondent)

For Appellant: Shri Rakesh Gupta, Adv. &For Respondent: Shri T. James Singson, CIT-D.R
Section 143(2)Section 143(3)Section 263Section 56(2)(viia)Section 56(2)(visa)

Assistant Commission Er of Income Tax-Circle-4(2)(1), Mumbai vs. Hathway Patiala Cable Private Limited, Rahejas Corner of Main Avenue

In the result, the appeal is dismissed

ITA 555/MUM/2024[2016-17]Status: DisposedITAT Mumbai25 Jun 2024AY 2016-17

Bench: Shri Amit Shukla & Shri Ratnesh Nandan Sahayassessment Year: 2016-17 Assistant Commissioner Hathway Patiala Cable Of Income Tax- Circle- Private Limited, 4Th Floor, 4(2)(1) Room No. 640, Vs. V. P. Road, 6Th Floor, Santacruz, West, Aayakar Bhavan, Mumbai 400054. M. K. Road, Pan: Aabch3937R Mumbai 400 020. (Appellant) (Respondent) Present For: Assessee By : None Revenue By : Shri. P.D. Chougule (Addl. Cit), Sr. D.R. Date Of Hearing : 22 . 05 . 2024 Date Of Pronouncement : 25 . 06 . 2024

For Appellant: NoneFor Respondent: Shri. P.D. Chougule (Addl. CIT), SR. D.R
Section 250Section 56Section 56(2)(viia)

Maa Chintpoorni Tie-Up Private Limited, Kolkata vs. I.T.O, Ward-1(2), Kolkata

In the result, both the appeals of the assessee are allowed for statistical purposes

ITA 541/KOL/2023[2015-16]Status: DisposedITAT Kolkata21 Jun 2024AY 2015-16

Bench: Shri Sanjay Garg & Shri Rakesh Mishra

For Appellant: Shri Himadri Mukhopadhyay, Advocate & ShriFor Respondent: Shri Sailen Samadder, Addl. CIT, Sr. DR
Section 143(3)Section 14ASection 250Section 271(1)(C)Section 271(1)(c)

Maa Chintpoorni Tie-Up Pvt. Ltd., Kolkata vs. ITO, WD-1(2), Kolkata

In the result, both the appeals of the assessee are allowed for statistical purposes

ITA 540/KOL/2023[2015-16]Status: DisposedITAT Kolkata21 Jun 2024AY 2015-16

Bench: Shri Sanjay Garg & Shri Rakesh Mishra

For Appellant: Shri Himadri Mukhopadhyay, Advocate & ShriFor Respondent: Shri Sailen Samadder, Addl. CIT, Sr. DR
Section 143(3)Section 14ASection 250Section 271(1)(C)Section 271(1)(c)

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)

The DCIT, Central Circle-1(3), Ahmedabad vs. Suraj Impex Pvt.. Ltd., Ahmedabad

In the result, the Revenue’s appeal is dismissed

ITSSA 13/AHD/2019[2014-15]Status: DisposedITAT Ahmedabad10 Jun 2024AY 2014-15

Bench: Us, Both The Appeals Of The Revenue For Asst. Years 2013-14 & 2014-15 Are Being Taken Up Together.

Section 56(2)(viia)

The DCIT, Central Circle-1(3), Ahmedabad vs. Suraj Impex Pvt.. Ltd., Ahmedabad

In the result, the Revenue’s appeal is dismissed

ITSSA 12/AHD/2019[2013-14]Status: DisposedITAT Ahmedabad10 Jun 2024AY 2013-14

Bench: Us, Both The Appeals Of The Revenue For Asst. Years 2013-14 & 2014-15 Are Being Taken Up Together.

Section 56(2)(viia)

DCIT Centralcircle-2(3), Chennai vs. M/S Tangi Fcility Solutions Pvt. Ltd., Chennai

The appeal stand dismissed

ITA 735/CHNY/2023[2017-18]Status: DisposedITAT Chennai03 Jun 2024AY 2017-18

Bench: Hon’Ble Shri Mahavir Singh, Vp & Hon’Ble Shri Manoj Kumar Aggarwal, Am आयकरअपीलसं./ Ita No.735/Chny/2023 (िनधा*रणवष* / Assessment Year: 2017-18) Dcit M/S. Tangi Facility Solutions Pvt. Ltd. बनाम/ Central Circle-2(3) Old No.42, New No.2, Chennai-34. Luz Avenue, Mylapore, Vs. Chennai-600 004. "थायीलेखासं./जीआइआरसं./Pan/Gir No. Aafct-1408-B (अपीलाथ"/Appellant) : (" थ" / Respondent) अपीलाथ" कीओरसे/ Appellant By : Mrs. Swapna Nanu Ambath (Cit)- Ld. Dr " थ"कीओरसे/Respondent By : Shri G. Shivakumar (Advocate)-Ld. Ar सुनवाई की तारीख/Date Of Hearing : 18-03-2024 घोषणा की तारीख /Date Of Pronouncement : 03-06-2024

For Appellant: Mrs. Swapna Nanu Ambath (CIT)- Ld. DRFor Respondent: Shri G. Shivakumar (Advocate)-Ld. AR
Section 143(3)Section 147Section 148Section 2(22)(b)Section 56(2)Section 56(2)(viia)

Raj Sheela Growth Fund (P) Ltd vs. Income Tax Officer, Ward - 21(1), Delhi

ITA/124/2020HC Delhi08 May 2024

Bench: HON'BLE MR. JUSTICE YASHWANT VARMA,HON'BLE MR. JUSTICE PURUSHAINDRA KUMAR KAURAV

Section 127Section 143(2)Section 144ASection 56(2)(viia)

Principal Commissioner of Income Tax, Delhi 1 vs. M/S Ansal Condominium Pvt Ltd

Appeal is allowed

ITA/132/2024HC Delhi27 Feb 2024

Bench: HON'BLE MR. JUSTICE YASHWANT VARMA,HON'BLE MR. JUSTICE PURUSHAINDRA KUMAR KAURAV

Section 56(2)(vii)Section 56(2)(viia)

ACIT, Central Circle- 13, New Delhi vs. Electrical & Electronics India Ltd., Kolkata

In the result, the appeal filed by the revenue is dismissed

ITA 6923/DEL/2018[2015-16]Status: DisposedITAT Delhi10 Nov 2023AY 2015-16

Bench: Sh. N. K. Billaiya & Ms. Astha Chandraassessment Year: 2015-16 Acit Electrical & Electronics Central Circle-13 India Ltd. New Delhi Vs. Business Communication Centre, 21 Parsi Church Street, Opp. 18 Ezra Street, Kolkata West Bengal - 700001 Pan No.Aaace5419J (Appellant) (Respondent) Appellant By Sh. Vivek Upadhyay, Sr. Dr Respondent By Sh. Salil Aggarwal, Advocate Sh. Madhur Aggarwal, Advocate Sh. Shailesh Gupta, Ca Date Of Hearing: 06/11/2023 Date Of Pronouncement: 10/11/2023 Order Per N. K. Billaiya, Am: This Appeal By The Revenue Is Preferred Against The Order Of The Cit(A)-26, New Delhi Dated 27.08.2018 Pertaining To A.Y.2015-16. 2. The Grievance Of The Revenue Read As Under :- 1. Whether On The Facts & In The Circumstances Of The Case, Hon'Ble Cit(A) Is Erred In Deleting The Addition To Rs.5,63,34,120/- U/S 56(2)(Viia) Of The Income Tax Act, 1961. 2. Whether On The Facts & In The Circumstances Of The Case, Hon'Ble Cit(A) Is Erred In Deleting The Addition Of Rs.16,06,000/-On Account Of Business Loss Incurred On Sales Of Shree Shaleen Taxtiles Ltd. 3. Whether On The Facts & In The Circumstances Of The Case, Hon'Ble Cit(A) Is Erred In Deleting The Addition Of Rs.1,59,777/-On Account Of Business Loss On The Valuation Of Shares Of M/S Cressanda Solution Ltd. 4. The Order Of Ld. Cit(A) Is Erroneous & Not Tenable In Law & On Facts. 5. The Appellant Craves Leave To Add, Alter Or Amend Any/All Of The Grounds Of Appeal Before Or During The Course Of The Hearing Of The Appeal.

Section 56(2)Section 56(2)(viia)

Kanti Commercial (P) Ltd., New Delhi vs. ACIT, Central Circle-13, New Delhi

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

ITA 574/DEL/2019[2015-16]Status: DisposedITAT Delhi14 Sept 2023AY 2015-16

Bench: SHRI PRADIP KUMAR KEDIA (Accountant Member), SHRI YOGESH KUMAR U.S. (Judicial Member)

Section 119Section 143(3)Section 56(2)(viia)

ACIT, Circle- 2(2), New Delhi vs. Ansal Condominium Pvt. Ltd., New Delhi

Appeal is allowed

ITA 760/DEL/2019[2015-16]Status: DisposedITAT Delhi16 Jun 2023AY 2015-16

Bench: Dr. B.R.R. Kumar & Shri Yogesh Kumar Us

For Appellant: Shri R. S. Singhvi, Advocate; &For Respondent: Shri P. Praveen Sidharth
Section 143(2)Section 14ASection 56(2)(viia)

Parveen Commodity Brokers (P) Ltd., New Delhi vs. ITO, Ward- 19(3), New Delhi

In the result, Appeal of the assessee is allowed for statistical purpose

ITA 5173/DEL/2018[2013-14]Status: DisposedITAT Delhi07 Jun 2023AY 2013-14

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

For Appellant: Department by: . Rajesh Dhanesta. SrFor Respondent: . Rajesh Dhanesta. Sr
Section 143(3)Section 234ASection 29Section 56(2)(viia)

Tpg Growth II Makets Pte Ltd., Mumbai vs. DCIT 4(1)(2), Mumbai

Accordingly, Ground No. 4 raised by the Appellant is partly allowed

ITA 1387/MUM/2022[2017-18]Status: DisposedITAT Mumbai06 Jun 2023AY 2017-18
For Appellant: Shri Dinesh BafnaFor Respondent: Dr. Samuel Pitta
Section 143(3)Section 144C(13)Section 144C(5)Section 5Section 9Section 92C(3)

Asst. Commissioner of Income Tax, Circle-10(1), Hyderabad vs. Vertex Projects LLP (Formerly M/S Vertex Projects Ltd), Hyderabad

In the result, the appeal of Revenue is partly allowed for statistical purposes

ITA 1187/HYD/2018[2014-15]Status: DisposedITAT Hyderabad28 Apr 2023AY 2014-15

Bench: Shri Rama Kanta Panda & Shri Laliet Kumarassessment Year: 2014-15 Acit,Circle-10(1) Vs. Vertex Projects Llp Room No.515, 5Th Floor, (Formerly M/S.Vertex A-Block, I.T.Towers, Projects Ltd.) A.C.Guards, #156-159, Paigah House Hyderabad. S.P.Road, Next To Pg College. Secunderabad-500 026. Pan : Aanfv0232C (Appellant) (Respondent) Assessee By: Shri Sriram Seshadri, Ca Revenue By: Shri Rajendra Kumar,Cit-Dr Date Of Hearing: 15.03.2023 Date Of Pronouncement: 28.04.2023 O R D E R Per Shri Laliet Kumar, J.M. This Is An Appeal Filed By The Revenue, Feeling Aggrieved By The Order Passed By The Learned Commissioner Of Income Tax (Appeals)-5, Dated 16.03.2018 For The Ay 2014-15, On The Following Grounds :

For Appellant: Shri Sriram Seshadri, CAFor Respondent: Shri Rajendra Kumar,CIT-DR
Section 115JSection 142(1)Section 143(2)Section 14ASection 14A(3)Section 47Section 56Section 56(2)(viia)Section 56(2)(viiia)

Updater Services Limited [Updater Services Private Limited, Chennai vs. PCIT, Chennai-2

The appeal stand dismissed in terms of our above order

ITA 429/CHNY/2022[2017-2018]Status: DisposedITAT Chennai21 Apr 2023AY 2017-2018

Bench: Hon’Ble Shri Manoj Kumar Aggarwal, Am & Hon’Ble Shri Manomohan Das

For Appellant: Ms. Farha Sultana (CA) &For Respondent: Shri S. Senthil Kumaran (CIT) –Ld. DR
Section 115QSection 142(1)Section 143(3)Section 263Section 391Section 56(2)(viia)Section 77