section 56

Genuine issue of Shares to Shareholders not to be considered under Anti-Abuse Provisions of the IT Act

Income Tax - Genuine issue of Shares to Shareholders not to be considered under Anti-Abuse Provisions of Income Tax Act, 1961 In Income Tax Officer v. Shri Rajeev Ratanlal Tulshyan [I.T.A. No.5748/Mum/2017 A.Y. 2014-15 dated October 01, 2021] [along with cross objection filed by Shri Rajeev Ratanlal Tulshyan (the Respondent)], the Income Tax Officer (...

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Taxability on Gifts, Rewards & Rewards Given to Sportsperson/Olympic Participants

Income Tax - Taxability on Gifts, Rewards and Rewards Given to Sportsperson/Olympic Participants TAX ON GIFTS IN INDIA: In India, gift is exempted up to Rs. 50,000 and gifts from specific relatives such as parents, spouse and siblings are also exempted from tax. Other than specified before are taxable. Tax on gifts falls under the purview of Income [&...

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Rule 11UAC of Income-Tax Rules, 1962

Income Tax - The CBDT has notified Income-tax (28th Amendment) Rules, 2021 to amend Rule 11UAC of the existing Income-Tax Rules, 1962. The notification shall come into force from 1st April, 2022 and shall be applicable from A.Y. 2022-23 onwards. Vide this notification, the CBDT has inserted the following new clause in Rule 11UAC: “(4) any movable pr...

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Availed Startup Benefits?

Income Tax - I. Introduction What qualifies as a “Start-up” under the Start-up India Scheme? An entity shall be eligible to apply for Start-up Registration if: 1. It is incorporated as a Pvt Ltd Company or registered partnership firm or LLP. 2. Up to ten years from the date of its incorporation/registration 3. Turnover for any of the [&hel...

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Taxation of Dividend Income – Complete Guide

Income Tax - Finance Act 2020 has made major amendments to the taxation of dividends. With these amendments the general notion that dividends are exempt is no longer the same. This Guide will help our fellow member CA’s, Students, and shareholders to understand the taxability of dividends. First lets understand the two types of dividend: 1. Inte...

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Representation to FM to Widen Scope of Benefit of 20% for flats

Income Tax - Representation for widening the scope of benefit in case of difference in agreement price and Circle Rate of property is upto 20 per cent for the purpose of Income tax. ...

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Income Tax Exemption to Owners of Unauthorized Colonies In Delhi

Income Tax - Over 1700 unauthorized colonies in Delhi were regularised in December last year. Owners Delhi’s unauthorised colonies will now get Income Tax Exemption even if they have purchased land or house at rates below the prevailing market price. The Income Tax Department issued a Notification grating the exemption on any immovable property bein...

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Cabinet approves Taxation Laws (Amendment) Bill, 2019

Income Tax - In order to attract fresh investment in manufacturing and provide boost to 'Make-in India' initiative of the Government, another provision was inserted to the IT Act, to provide that a domestic manufacturing company set up on or after 1st October, 2019 and which commences manufacturing by 31st March, 2023, may opt to pay tax at 15% plus s...

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No scrutiny of Start-ups related to valuations of share premiums 

Income Tax - Start-ups and their investors filing requisite declarations not to be subjected to any scrutiny regarding valuations of share premiums  E-verification mechanism proposed for establishing identity of the investor and source of his funds TV programme proposed exclusively for Start-ups within the DD bouquet of channels Government to launch ...

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CBDT Circular on anti-abuse provisions in cases of receipt of shares

Income Tax - Central Board of Direct Taxes had issued Circular 10/2018 dated 31.12.2018 to clarify that provisions of section 56(2)(viia) of the Income-tax Act, 1961 being anti-abuse provisions shall not be applicable in cases of receipt of shares by the specified company or firm as result of fresh issuance of shares including by way of bonus shares, ...

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Share Transfer without consideration or at a price lower than FMV not attracts Section 56(2)(vii)

ITO Vs. Shri Rajeev Ratanlal Tulshyan (ITAT Mumbai) - It was held that transfer of shares of a company to a firm or a company, instead of an individual or an HUF, without consideration or at a price lower than the fair market value does not attract Section 56(2)(vii) of the Income Tax Act....

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Agreement Vs. Stamp Duty Value : ITAT discusses Scope of exception to section 56(2)(vii)(b)(ii)

Joseph Mudaliar Vs DCIT (ITAT Mumbai) - Joseph Mudaliar Vs DCIT (ITAT Mumbai) Addition u/s 56(2)(vii)(b) on difference in value in respect of the subject properties where declared sale consideration shown by the assessee is lesser than the stamp duty value (market value) determined by the stamp duty authority Addition u/s 56(2)(vii)(b). T...

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S. 56(2)(vii)(b)(ii) cannot be applied prior to A.Y. 2014­-15; allotment letter constituted a complete agreement

Naina Saraf Vs PCIT (ITAT Jaipur) - Naina Saraf Vs PCIT (ITAT Jaipur) Section 56(2)(vii)(b)(ii) cannot be applied prior to a A.Y. 2014­-15 as section comes into effect from A.Y. 2015-16 The Finance Act, 2013 inserted clause (ii) in S. 56(2)(vii)(b) reading as under: ‘(ii) for a consideration which is less than the stamp duty va...

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In absence of malfide or false claim AO not justified in taking hyper technical view

Shri Ashutosh Jha (HUF) Vs. ITO (ITAT Kolkata) - Shri Ashutosh Jha (HUF) Vs. ITO (ITAT Kolkata) The claim of the assessee has been that the assessee had purchased the property at a lower rate as per the value mentioned in the agreement to purchase dated 19-07-2012. However, the Ld. AO has adopted the stamp duty value as on date of sale i.e. 28-05-...

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No section 56(2)(vi) addition for Gift received from brother-in-law

Y. C. Kallinatha Vs Addl. CIT (ITAT Bangalore) - Y. C. Kallinatha Vs ACIT (ITAT Bangalore) The assessee had received a gift of Rs.22.50 lakh from Shri T.C.Shivakumar, who is brother-in- law of the assessee. The assessee had considered the transaction not coming within the purview of section 56(2)(vi) of the I.T.Act since gift was received from a r...

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Income Tax relief for Real-estate Developers and Home Buyers

Release ID: 1672636 - (13/11/2020) - In order to boost demand in the real-estate sector and to enable the real-estate developers to liquidate their unsold inventory at a rate substantially lower than the circle rate and giving benefit to the home buyers, it has been decided to further increase the safe harbour from 10% to 20% under sec...

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Rule 11UAC Exemption from deeming provisions of section 56(2)(x)

Notification No. 40/2020-Income Tax [G.S.R. 421(E)] - (29/06/2020) - Rule 11UAC Exemption from deeming provisions of section 56(2)(x)-Prescribed class of persons for the purpose of clause (XI) of the proviso to clause (x) of sub-section (2) of section 56- Income Tax Notification No. 40/2020 dated 29th June, 2020. MINISTRY OF FINANCE (Department of Revenue) (CENTRAL B...

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CBDT revises definition of unauthorised colonies of NCT of Delhi

Notification No. 12/2020-Income Tax [G.S.R. 124(E)] - (17/02/2020) - CBDT has vide Notification No. 12/2020-Income Tax  revises definition of unauthorised colonies of NCT of Delhi for rule 11UAC read with Section Section 56(2)(x). Earlier CBDT has provided vide Notification No. 96/2019-Income Tax dated 11th November, 2019 that Section 56(2)(x)  not applies to speci...

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CBDT notifies more modes of e-payments; 6DD limit reduced to ₹ 10000

Notification No. 08/2020-Income-Tax [G.S.R. 56(E)] - (29/01/2020) - Notification No. 8/2020-Income-Tax- CBDT has notified Other electronic modes by inserting New Income TAx Rule 6ABBA. It also amended marginal heading of rule 6DD and in rule 6DD for the words ‘account payee bank draft, exceeds twenty thousand rupees’, the words, figures and letters ̵...

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Section 56(2)(x) CBDT grants exemption to resident of unauthorised colony

Notification No. 96/2019-Income Tax [G.S.R. 836(E)] - (11/11/2019) - Unauthorised colony means a colony or development comprising of a contiguous area, where no permission has been obtained for approval of layout plan or building plans and has been identified for regularisation of such colony...

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Recent Posts in "section 56"

Share Transfer without consideration or at a price lower than FMV not attracts Section 56(2)(vii)

ITO Vs. Shri Rajeev Ratanlal Tulshyan (ITAT Mumbai)

It was held that transfer of shares of a company to a firm or a company, instead of an individual or an HUF, without consideration or at a price lower than the fair market value does not attract Section 56(2)(vii) of the Income Tax Act....

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Genuine issue of Shares to Shareholders not to be considered under Anti-Abuse Provisions of the IT Act

Genuine issue of Shares to Shareholders not to be considered under Anti-Abuse Provisions of Income Tax Act, 1961 In Income Tax Officer v. Shri Rajeev Ratanlal Tulshyan [I.T.A. No.5748/Mum/2017 A.Y. 2014-15 dated October 01, 2021] [along with cross objection filed by Shri Rajeev Ratanlal Tulshyan (the Respondent)], the Income Tax Officer (...

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Posted Under: Income Tax |

Taxability on Gifts, Rewards & Rewards Given to Sportsperson/Olympic Participants

Taxability on Gifts, Rewards and Rewards Given to Sportsperson/Olympic Participants TAX ON GIFTS IN INDIA: In India, gift is exempted up to Rs. 50,000 and gifts from specific relatives such as parents, spouse and siblings are also exempted from tax. Other than specified before are taxable. Tax on gifts falls under the purview of Income [&...

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Posted Under: Income Tax |

Agreement Vs. Stamp Duty Value : ITAT discusses Scope of exception to section 56(2)(vii)(b)(ii)

Joseph Mudaliar Vs DCIT (ITAT Mumbai)

Joseph Mudaliar Vs DCIT (ITAT Mumbai) Addition u/s 56(2)(vii)(b) on difference in value in respect of the subject properties where declared sale consideration shown by the assessee is lesser than the stamp duty value (market value) determined by the stamp duty authority Addition u/s 56(2)(vii)(b). The difference in value in respect of the...

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S. 56(2)(vii)(b)(ii) cannot be applied prior to A.Y. 2014­-15; allotment letter constituted a complete agreement

Naina Saraf Vs PCIT (ITAT Jaipur)

Naina Saraf Vs PCIT (ITAT Jaipur) Section 56(2)(vii)(b)(ii) cannot be applied prior to a A.Y. 2014­-15 as section comes into effect from A.Y. 2015-16 The Finance Act, 2013 inserted clause (ii) in S. 56(2)(vii)(b) reading as under: ‘(ii) for a consideration which is less than the stamp duty value of the property by an amount [&helli...

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Rule 11UAC of Income-Tax Rules, 1962

The CBDT has notified Income-tax (28th Amendment) Rules, 2021 to amend Rule 11UAC of the existing Income-Tax Rules, 1962. The notification shall come into force from 1st April, 2022 and shall be applicable from A.Y. 2022-23 onwards. Vide this notification, the CBDT has inserted the following new clause in Rule 11UAC: “(4) any movable pr...

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Posted Under: Income Tax |

In absence of malfide or false claim AO not justified in taking hyper technical view

Shri Ashutosh Jha (HUF) Vs. ITO (ITAT Kolkata)

Shri Ashutosh Jha (HUF) Vs. ITO (ITAT Kolkata) The claim of the assessee has been that the assessee had purchased the property at a lower rate as per the value mentioned in the agreement to purchase dated 19-07-2012. However, the Ld. AO has adopted the stamp duty value as on date of sale i.e. 28-05-2013. […]...

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Availed Startup Benefits?

I. Introduction What qualifies as a “Start-up” under the Start-up India Scheme? An entity shall be eligible to apply for Start-up Registration if: 1. It is incorporated as a Pvt Ltd Company or registered partnership firm or LLP. 2. Up to ten years from the date of its incorporation/registration 3. Turnover for any of the [&hel...

Read More
Posted Under: Income Tax |

No section 56(2)(vi) addition for Gift received from brother-in-law

Y. C. Kallinatha Vs Addl. CIT (ITAT Bangalore)

Y. C. Kallinatha Vs ACIT (ITAT Bangalore) The assessee had received a gift of Rs.22.50 lakh from Shri T.C.Shivakumar, who is brother-in- law of the assessee. The assessee had considered the transaction not coming within the purview of section 56(2)(vi) of the I.T.Act since gift was received from a relative covered under the definition of ...

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Section 56(2)(v) relative definition not apply for Specified Domestic Transactions

Smt. Anita Sunil Mahajan Vs ACIT (ITAT Pune)

Smt. Anita Sunil Mahajan Vs ACIT (ITAT Pune) Definition of ‘relative’ for Specified Domestic Transactions (SDTs) should be as per Section 2(41) of Income Tax Act, 1961 and Section 56(2)(v) would not apply. Case Summary: – Facts of the case: During AY 2013-14, Smt. Anita Sunil Mahajan (Assessee), filed her return declarin...

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