Section 56(2)(x)(b)(B) does not tax conversion of tenancy rights into ownership in the same premises.

Section 56(2)(x)(b)(B) applies only where a person receives immovable property for consideration, and not where an existing protected tenant merely converts tenancy rights into ownership rights in the same premises. The transaction was treated as an enhancement of an existing interest rather than a fresh acquisition of land or building, so the deemed income provision did not apply. Authorities on tenant purchases of property were distinguished because they involved acquisition of the property itself. The addition made on this basis was therefore unsustainable and was deleted.

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Issues: Whether section 56(2)(x)(b)(B) of the Income-tax Act, 1961 applies to a transaction where a protected tenant pays consideration for conversion of tenancy rights into ownership rights in the same flat.

Analysis: Section 56(2)(x)(b)(B) taxes the excess of stamp duty value over consideration only where a person receives immovable property, namely land or building or both, for consideration. The transaction in question was not a purchase of a new immovable property by the assessee. The assessee was already in possession as a protected tenant and, under the deed for conversion, acquired only an improved ownership interest in the same premises. The statutory definition of property in this context does not extend to mere enhancement or conversion of an existing right in the property. The cited authorities on purchase of property by a tenant were distinguished because those cases involved acquisition of the property itself, whereas the present case involved conversion of tenancy into ownership.

Conclusion: Section 56(2)(x)(b)(B) does not apply to the conversion of tenancy rights into ownership rights in the same premises. The addition made on that basis was unsustainable and was deleted, in favour of the assessee.

Ratio Decidendi: A tax under section 56(2)(x)(b)(B) can arise only on receipt of immovable property, not on a mere conversion or enhancement of an existing tenancy right into ownership rights in the same property.

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