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)

Pushp Steel and Mining Private Limited, Delhi vs. PCIT, Delhi-7

In the result, appeal of the assessee is allowed

ITA 811/DEL/2021[2015-16]Status: DisposedITAT Delhi22 Dec 2021AY 2015-16

Bench: Sh. Anil Chaturvedi & Sh. K. Narasimha Chary

Section 143(2)Section 143(3)Section 263Section 263(1)Section 56(2)(viia)

Jsw Logistics Infrastructure Pvt. Ltd., Mumbai vs. DCIT - 5 (2)(1), Mumbai

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

ITA 5814/MUM/2018[2014-15]Status: DisposedITAT Mumbai30 Nov 2021AY 2014-15

Bench: Shri S. Rifaur Rahman () & Shri Pavan Kumar Gadale () Assessment Year: 2014-15 M/S Jsw Logistics Infrastructure Pvt. Ltd., Dcit-5(2)(1), Jsw Centre, Bandra Kurla Complex, Vs. Mumbai. Bandra (E), Mumbai-400051. Pan No. Aaccj 5104 F Assessee Respondent

For Appellant: Mr. Gavrav Kabra, ARFor Respondent: Mr. S.N. Kabra, DR
Section 143(2)Section 143(3)Section 56Section 56(2)Section 56(2)(via)Section 56(2)(viia)

Pawansut Media Services Pvt Ltd, New Delhi vs. Pr. CIT - 7, New Delhi

In the result, appeal of the assessee is allowed

ITA 534/DEL/2021[2015-16]Status: DisposedITAT Delhi14 Oct 2021AY 2015-16

Bench: Shri R.K. Panda & Shri Amit Shukla

For Appellant: Shri Kapil Goel, Advocate &For Respondent: Smt. Sushma Singh, CIT-DR
Section 143(3)Section 263Section 56(2)(viia)

Asst CIT 9(2)(1), Mumbai vs. Brima Sagar Maharashtra Distilleries Ltd, Mumbai

The appeal stands dismissed

ITA 756/MUM/2016[2011-12]Status: DisposedITAT Mumbai28 Jun 2021AY 2011-12

Bench: Hon’Ble Shri Manoj Kumar Aggarwal, Am & Hon’Ble Shri Ravish Sood, Jm

For Appellant: Shri S.C.Tiwari – Ld. ARFor Respondent: Shri Sushil Kumar Mishra (Ld. CIT-DR)/
Section 133(6)Section 143(3)Section 68

Flow Link Systems P Ltd, Coimbatore vs. ACIT Company Circle 1 (2), Coimbatore

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

ITA 1710/CHNY/2018[2013-14]Status: DisposedITAT Chennai14 Jun 2021AY 2013-14

Bench: Shri Duvvuru Rl Reddy & Shri S. Jayaramanआयकर अपील सं./I.T.A. No. 1710/Chny/2018 िनधा"रण वष"/Assessment Year:2013-14 M/S. Flow Link Systems (P) Ltd., The Assistant Commissioner Of 189/1A, 1B, 1C, Uthupalayam, Vs. Income Tax, Arasur Village, Coimbatore 641 407. Company Circle I(2), [Pan:Aaacf3239K] Coimbatore. (अपीलाथ"/Appellant) (""थ"/Respondent) अपीलाथ" की ओर से / Appellant By : Shri K. Raghu, C.A. ""थ" की ओर से/Respondent By : Shri Abani Kanta Nayak, Cit सुनवाई की तारीख/ Date Of Hearing : 22.04.2021 घोषणा की तारीख /Date Of Pronouncement : 14.06.2021 आदेश /O R D E R Per Duvvuru Rl Reddy: This Appeal Filed By The Assessee Is Directed Against The Order Of The Ld. Principal Commissioner Of Income Tax-1, Coimbatore, Dated 26.03.2018 Relevant To The Assessment Year 2013-14 Challenging The Order Passed Under Section 263 Of The Income Tax Act, 1961 [“Act” In Short].

For Appellant: Shri K. Raghu, C.AFor Respondent: Shri Abani Kanta Nayak, CIT
Section 143(1)Section 143(3)Section 263Section 56(2)(viia)

ITO, Ward - 8(4), Kolkata vs. M/S. Sunshine Niwas Pvt. Ltd., Kolkata

In the result, the appeal of the Revenue is hereby dismissed

ITA 1293/KOL/2018[2013-14]Status: DisposedITAT Kolkata26 Mar 2021AY 2013-14

Bench: Sri J. Sudhakar Reddy & Sri Sanjay Gargi.T.A. No.1293/Kol/2018 Assessment Year: 2013-14 Ito, Ward-8(4), Kolkata.…....…………………………..………………………..…..……Appellant Vs. M/S Sunshine Niwas Pvt. Ltd…………..……………………………………...………..Respondent 12, Government Place East, Kolkata – 700001. [Pan : Aadcs8054Q] Appearances By: None Shri John Vincent Donjupar Longstich, Dr, Appeared On Behalf Of The Respondent.

Section 14ASection 2(22)(e)Section 56Section 56(2)(viia)

DCIT, New Delhi vs. M/S. Technico Industries Pvt. Ltd., New Delhi

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

ITA 5204/DEL/2015[2011-12]Status: DisposedITAT Delhi09 Mar 2021AY 2011-12

Bench: Shri R.K. Panda & Ms Suchitra Kambleassessment Year: 2011-12 Dcit, Vs Technico Industries Pvt. Ltd., Circle-25(1), 103, Pratap Bhawan, Cr Building, Ip Estate, Bahadur Shah Zafar Marg, New Delhi. Near Indian Express Building, New Delhi. Pan: Aaact4445P (Appellant) (Respondent) Assessee By : Shri Aditya Kumar, Ca & Shri Ashwani Kumar, Ca Revenue By : Mrs Aashna Paul, Cit-Dr Date Of Hearing : 17.12.2020 Date Of Pronouncement : 09.03.2020 Order Per R.K. Panda, Am: This Appeal Filed By The Revenue Is Directed Against Order Dated 31St March, 2015 Of The Cit(A)-9, New Delhi Relating To Assessment Year 2011-12. 2. Facts Of The Case, In Brief, Are That The Assessee Is A Company Engaged In The Business Of Manufacturing Of Sheet Metal Components & Tools & Dies. It Filed Its Return Of Income On 29Th September, 2011 Declaring ‘Nil’ Income. The Said Return Was Revised On 14Th September, 2012 Declaring A Loss Of Rs.3,61,68,075/-. During The Course Of Assessment Proceedings, The Ao, On Perusal Of The Balance Sheet Filed By The Assessee, Noted That The Assessee Company Has Issued 14,72,000 Equity Shares At A Premium Of Rs.115. From The Various Details Furnished By The Assessee, The Ao Noted That The Assessee Has Issued Shares To The Following Persons/Parties:-

For Appellant: Shri Aditya Kumar, CA &For Respondent: Mrs Aashna Paul, CIT-DR
Section 133(6)

Just Medicine Info Services Pvt Ltd., Mumbai vs. ITO 12 (3)(1), Mumbai

ITA 1450/MUM/2019[2015-16]Status: DisposedITAT Mumbai17 Mar 2020AY 2015-16

Bench: Shri Pawan Singh, Jm & Shri S. Rifaur Rahman, Am आयकरअपीलसं./ I.T.A. No. 1450/Mum/2019 (निर्धारणवर्ा / Assessment Year: 2015-16)

For Appellant: Shri Madhur Agrawal, AR byFor Respondent: Mrs. Samatha Mullamudi, DR
Section 142(1)Section 143(1)Section 143(2)Section 14ASection 56(2)(viia)

Tatva Gloabal Environment Ltd, Mumbai vs. ITO 9(3)(3), Mumbai

In the result the appeal of the assessee is partly allowed and the appeal

ITA 4012/MUM/2016[2011-12]Status: DisposedITAT Mumbai01 Nov 2019AY 2011-12

Bench: Shri Pawan Singh & Shri Rajesh Kumartatva Global Environment Ltd Vs Ito-9(3)(3), (Now Known As Tatva Global Aayakar Bhawan, M.K. Road, Environment Pvt Ltd) Mumbai Uniphos House, C D Marg, Opp Madhu Park, Khar (W) Mumbai 400 052 Pan : Aaics1718A Appellant Respondednt Dcit, Cent.Cir.6(3), Vs Tatva Global Environment Ltd Mumbai (Now Known As Tatva Global Environment Pvt Ltd) Uniphos House, C D Marg, Opp Madhu Park, Khar (W) Mumbai 400 052 Pan : Aaics1718A Appellant Respondednt

Section 10(34)Section 115OSection 14ASection 56(2)(viia)

Keva Industries Private Limited, Mumbai vs. Income Tax Officer 15(2)(1), Mumbai

In the result, the appeal of the assessee is allowed

ITA 1703/MUM/2019[2015-16]Status: DisposedITAT Mumbai16 Oct 2019AY 2015-16

Bench: Shri M.Balaganesh, Am & Shri Amarjit Singh, Jm M/S. Keva Industries Pvt. Vs. Income Tax Officer, Ltd 15(2)(1) Room No.480, 4Th Floor C/O. Sh Kelkar & Company Limited Aayakar Bhavan Lbs Marg, Mulund West Mumbai – 400 020 Mumbai – 400 080 Pan/Gir No. Aafck6140B (Appellant) .. (Respondent)

Section 139(1)Section 139(5)Section 143(2)Section 143(3)Section 56(2)(viia)

ITO WD 1(1), Kalyan vs. Chardham Trading P.Ltd, Bhiwandi

In the result, the appeal of Revenue is dismissed

ITA 3292/MUM/2017[2011-12]Status: DisposedITAT Mumbai20 Aug 2019AY 2011-12

Bench: Shri Mahavir Singh & Shri Rajesh Kumar

For Appellant: Shri Arvind Kumar, DRFor Respondent: Shri Viral Doshi, AR
Section 144Section 56(2)(viia)

Raj Sheela Growth Fund (P) Ltd., New Delhi vs. ITO, Ward- 21(1), New Delhi

In the result, the appeal of the assessee is partly allowed

ITA 881/DEL/2019[2015-16]Status: DisposedITAT Delhi09 Aug 2019AY 2015-16

Bench: Shri Amit Shukla & Shri L. P. Sahu

For Appellant: S/Shri Raj Kumar Gupta and SumitFor Respondent: Shri J.K. Mishra, CIT-D.R
Section 127Section 143(3)Section 224Section 56Section 56(2)(viia)Section 68

DCIT Non Corporate Circle I, Chennai vs. Jain Housing, Chennai

In the result, the appeal of the Revenue in ITA

ITA 338/CHNY/2019[2014-15]Status: DisposedITAT Chennai08 Aug 2019AY 2014-15

Bench: Shri George Mathan & Shri Inturi Rama Rao

For Appellant: Shri. R. Clement RameshFor Respondent: Shri. M. Karunakaran, Adv
Section 143(3)Section 14ASection 36Section 36(1)Section 56Section 56(2)Section 56(2)(viia)

DCIT Non Corporate Circle I, Chennai vs. Jain Housing, Chennai

In the result, the appeal of the Revenue in ITA

ITA 337/CHNY/2019[2013-14]Status: DisposedITAT Chennai08 Aug 2019AY 2013-14

Bench: Shri George Mathan & Shri Inturi Rama Rao

For Appellant: Shri. R. Clement RameshFor Respondent: Shri. M. Karunakaran, Adv
Section 143(3)Section 14ASection 36Section 36(1)Section 56Section 56(2)Section 56(2)(viia)

M/S. Fragrance Investments Private Limited, Mumbai vs. Income Tax Officer-2(1)(3), Mumbai

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

ITA 4113/MUM/2018[2014-15]Status: DisposedITAT Mumbai31 Jul 2019AY 2014-15

Bench: Shri C.N. Prasad, Hon'Blem/S. Fragrance Investments Pvt. Ltd., Income Tax Officer - 2(1)(3) V. State Bank Building, Crawford Bayley & Co., Aayakar Bhavan M.G.N. Vaidya Marg, Mumbai – 400 023 M.K. Road, Mumbai-400 020 Pan: Aaacf 0838 J (Appellant) (Respondent) Assessee By : Shri Ajay R. Singh Department By : Shri Chaitanya Anjaria

For Appellant: Shri Ajay R. SinghFor Respondent: Shri Chaitanya Anjaria
Section 133(6)Section 56(2)(viia)

Cable Corporation of India Ltd, Mumbai vs. DCIT Circle 2(1), Mumbai

In the result, the appeal of the assessee is allowed

ITA 6558/MUM/2017[2010-11]Status: DisposedITAT Mumbai31 May 2019AY 2010-11

Bench: Shri Rajesh Kumar & Shri Amarjeet Singhassessment Year: 2010-11

For Appellant: Shri Perey Pareliwala, A.RFor Respondent: Shri Awangshi Gimson, D.R
Section 143(1)Section 2(24)Section 56

ITO WD 1(1), Kalyan vs. Agarsen Mercatnile Trading P. Ltd, Bhiwandi

In the result, the appeal of the Revenue in ITA no

ITA 3338/MUM/2017[2011-12]Status: DisposedITAT Mumbai18 Apr 2019AY 2011-12

Bench: Shri Saktijit Dey & Shri Ramit Kocharआयकर अपीऱ सं./I.T.A. No.3291/Mum/2017 (नििाारण वर्ा / Assessment Year : 2011-12) बिाम/ Income-Tax Officer M/S Avdharna Trading Ward 1(1) Private Limited 1St Floor, Mohan Plaza A9/A10, V. Wayale Nagar, Khadakpada Addl. Kalyan-Bhiwandi, Kalyan(West) Industrial Area Kalyan-421302 Village:Kon Bhiwandi-421302 स्थायी ऱेखा सं./ Pan: Aaica8411G (अपीऱाथी /Appellant) (प्रत्यथी / Respondent) ..

For Appellant: Shri. Viral DoshiFor Respondent: Shri.Vidhyadhar V. (DR)
Section 142(1)Section 143(1)Section 143(2)Section 143(3)Section 144Section 68

ITO WD 1(1), Kalyan vs. Abhiroop Trading P.Ltd, Bhiwandi

In the result, the appeal of the Revenue in ITA no

ITA 3293/MUM/2017[2011-12]Status: DisposedITAT Mumbai18 Apr 2019AY 2011-12

Bench: Shri Saktijit Dey & Shri Ramit Kocharआयकर अपीऱ सं./I.T.A. No.3291/Mum/2017 (नििाारण वर्ा / Assessment Year : 2011-12) बिाम/ Income-Tax Officer M/S Avdharna Trading Ward 1(1) Private Limited 1St Floor, Mohan Plaza A9/A10, V. Wayale Nagar, Khadakpada Addl. Kalyan-Bhiwandi, Kalyan(West) Industrial Area Kalyan-421302 Village:Kon Bhiwandi-421302 स्थायी ऱेखा सं./ Pan: Aaica8411G (अपीऱाथी /Appellant) (प्रत्यथी / Respondent) ..

For Appellant: Shri. Viral DoshiFor Respondent: Shri.Vidhyadhar V. (DR)
Section 142(1)Section 143(1)Section 143(2)Section 143(3)Section 144Section 68

ITO WD 1(1), Kalyan vs. Avdharna Trading P.Ltd, Bhiwandi

In the result, the appeal of the Revenue in ITA no

ITA 3291/MUM/2017[2011-12]Status: DisposedITAT Mumbai18 Apr 2019AY 2011-12

Bench: Shri Saktijit Dey & Shri Ramit Kocharआयकर अपीऱ सं./I.T.A. No.3291/Mum/2017 (नििाारण वर्ा / Assessment Year : 2011-12) बिाम/ Income-Tax Officer M/S Avdharna Trading Ward 1(1) Private Limited 1St Floor, Mohan Plaza A9/A10, V. Wayale Nagar, Khadakpada Addl. Kalyan-Bhiwandi, Kalyan(West) Industrial Area Kalyan-421302 Village:Kon Bhiwandi-421302 स्थायी ऱेखा सं./ Pan: Aaica8411G (अपीऱाथी /Appellant) (प्रत्यथी / Respondent) ..

For Appellant: Shri. Viral DoshiFor Respondent: Shri.Vidhyadhar V. (DR)
Section 142(1)Section 143(1)Section 143(2)Section 143(3)Section 144Section 68

Smiti Holding & Trading Company Private Limited, Mumbai vs. Prinicipal Commissioner of Income Tax 8, Mumbai

In the result, the appeal is allowed

ITA 2508/MUM/2018[2013-14]Status: DisposedITAT Mumbai25 Sept 2018AY 2013-14

Bench: Shri Joginder Singh () & Shri N.K. Pradhan () Assessment Year: 2013-14 Smiti Holding & Trading Co. Principal Cit, Room Pvt. Ltd. 3A, Barodawala Vs. No. 611, Aayakar Mansion, 81, Dr. Annie Bhavan, Mumbai- Besant Road, Worli, 400020. Mumbai-400018. Pan No. Aarcs4593G Appellant Respondent Assessee By : Mr. H.N. Motiwala, Ar Revenue By : Mr. C.S. Gulati, Dr Date Of Hearing : 19/07/2018 Date Of Pronouncement : 25/09/2018

For Appellant: Mr. H.N. Motiwala, ARFor Respondent: Mr. C.S. Gulati, DR
Section 11USection 143(3)Section 263Section 56