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| The Tax Publishers2019 TaxPub(DT) 3576 (Jp-Trib) : (2019) 177 ITD 0286 : (2019) 201 TTJ 0524 INCOME TAX ACT, 1961
Section 56(2)(vii)
Provisions of section 56(2)(vii) have application to 'property' which is in nature of a capital asset of recipient and, thus, when assessee purchased a piece of land as stock-in-trade, the addition made by AO in respect of the purchase of land by invoking provisions of section 56(2)(vii)(b)(ii), was to be set aside.
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Income from other sources - Addition under section 56(2)(vii) - Whether section applicable to property purchased as stock-in-trade pursuant to real estate business -
Assessee was engaged in real estate business. During relevant year, assessee purchased a piece of land as its stock-in-trade. AO invoked provisions of section 56(2)(vii)(b)(ii) adopting full value of sale consideration as adopted by stamp authority and made additions to assessee's income. Held: Provisions of section 56(2)(vii) have application to 'property' which is in nature of a capital asset of recipient and, therefore, same would not apply to stock-in-trade, raw material and consumable stores of any business of such recipient. Therefore, the order passed by AO was not sustainable.
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2015-16
IN THE ITAT, JAIPUR 'SMC' BENCH
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