INCOME TAX ACT, 1961

Section 56(2)(viib)

Income from other sources - Property acquired for consideration lesser than stamp duty value claimed not to be a capital asset - Agricultural land - Not being a capital asset

Assessee purchased two plots the sale consideration as per respective sale deeds amount to Rs. 5 lakhs and whereas stamp duty value of such properties as determined by the Stamp duty authority amounted to Rs. 8 lakhs. AO worked out deemed sales consideration as per DLC value and added difference of Rs. 3 lakhs under section 56(2)(vii)(b). Assessee's case was that which he has purchased were two plots of agricultural land and same did not fall in the definition of capital asset as per section 2(14) and section 56(2)(vii)(b) could not be invoked. As per AO, section 56(2)(vii)(b) talked about any immoveable property and thus even an agriculture land fell under the definition of an immoveable property and section 56(2)(vii)(b) got clearly attracted. Held: The term 'property' has been defined in Explanation (d) to section 56(2)(vii) to mean capital asset of assessee namely immoveable property being land or building or both. Assessee's contention deserved acceptance that the term 'property' has been defined to mean a capital asset as so specified and where an immoveable property as so specified being land, building or both is not held as an capital asset, it would not be subject to the provisions of section 56(2)(vii)(b). In the instant case, whether agriculture land so acquired fells in the definition of capital asset or not, one had to refer to section 2(14) which exclude agriculture land in India subject to certain exceptions. In a scenario, where it was so determined by AO that the agricultural land so acquired fells in the definition of capital asset, section 56(2)(vii)(b) would be applicable and in that situation AO would refer the matter to DVO to further determine fair market value of two plots of agricultural land and thereafter, decide the matter afresh.

REFERRED :

FAVOUR : Matter remanded.

A.Y. : 2014-15

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