Section 56(1)

Section 56(1) — the law in short

What the courts have decided on section 56(1), in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.

• DCIT v Cyquator Media Services Pvt Ltd ITATHelps taxpayerValidity unconfirmed
  The AO says our amalgamation was a colourable device to move shares tax-free and has taxed their market value under s.56(1). Can he disregard a scheme the High Court sanctioned?
  Not on these facts. The Mumbai Tribunal reversed the finding that the scheme was a tool for evasion, holding that the High Court had approved the scheme and its terms, the Department had raised no objection at that time before the High Court, and it could not now claim the scheme was a colourable device. The exemption in s.47(vi) was therefore available and the addition of Rs.1,466.60 crore under s.56(1) went.

Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.