Section 56(2) of the Income Tax Act
Income-tax Act, 2025: s.92
Section 56(2) 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) is Global Logic India Ltd. v. Dy. CIT (117 Taxmann.com 39), cited in 11 of the 166 judgments on BharatTax that turn on this section.
Leading authorities on Section 56(2)
A company undergoing restructuring activity during the relevant financial year may be rejected as a comparable in transfer pricing analysis, as such events can impact its profitability.
The Income Tax Appellate Tribunal (ITAT) decision in Prism Cement Ltd. v. JCIT (2006) is cited for the proposition that the nature of a transaction involving non-convertible debentures (NCDs) may be distinguished from the forfeiture of a loan when determining tax implications, and that a CIT(A) might err in deleting additions without further inquiry if the apparent is not the real.
If statutory authorities responsible for overseeing a particular Act have not taken any action, the assessing officer cannot allege a violation of that Act.
