Purchase of Rural Agricultural Land Below Stamp Value To Trigger Section 56(2)(vii)(b) Purchase of Rural Agricultural Land Below Stamp Value To Trigger Section 56(2)(vii)(b)

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The Tax Publishers Purchase of Rural Agricultural Land Below Stamp Value To Trigger Section 56(2)(vii)(b) Subhodh Sharma Section 56(2)(vii)(b) provides that where an assessee being individual or HUF receives any immovable property without consideration or for a consideration which is below stamp value then certain amount is taxed in hands of the assessee. In the case of ITO v. Trilok Chand Sain ITA No. 449/JP/2018 (Jpr-Trib), dt. 7-1-2019, the assessee argued that Section 56(2)(vii)(b) applies to capital assets only and thus not applicable to rural agricultural lands. The ITAT Jaipur bench held that Section 56(2)(vii)(b) applies to any immovable property and Whether such agriculture land falls in the definition of capital asset under Section 2(14) or whether such agriculture land is stock-in-trade of the assessee are issues which cannot be read in the definition of 'any immoveable property'. The learned author discusses the issue. 1. Relevant provisions Section 56(2)(vii)(b), to the extent relevant for present write-up, provides that where an individual or a Hindu undivided family receives, in any previous year, from any person or persons on or after the 1-10-2009 but before the 1-4-2017,- (a) any immovable property, -- (i) without consideration, the stamp duty value of which exceeds fifty thousand rupees, the stamp duty value of such property; (ii) for a consideration which is less than the stamp duty value of the property by an amount exceeding fifty thousand rupees, the stamp duty value of such property as exceeds such consideration: SUBSCRIBE FOR FULL CONTENT

The Tax Publishers

Purchase of Rural Agricultural Land Below Stamp Value To Trigger Section 56(2)(vii)(b)

Subhodh Sharma

Section 56(2)(vii)(b) provides that where an assessee being individual or HUF receives any immovable property without consideration or for a consideration which is below stamp value then certain amount is taxed in hands of the assessee. In the case of ITO v. Trilok Chand Sain ITA No. 449/JP/2018 (Jpr-Trib), dt. 7-1-2019, the assessee argued that Section 56(2)(vii)(b) applies to capital assets only and thus not applicable to rural agricultural lands. The ITAT Jaipur bench held that Section 56(2)(vii)(b) applies to any immovable property and Whether such agriculture land falls in the definition of capital asset under Section 2(14) or whether such agriculture land is stock-in-trade of the assessee are issues which cannot be read in the definition of 'any immoveable property'. The learned author discusses the issue.

1. Relevant provisions

Section 56(2)(vii)(b), to the extent relevant for present write-up, provides that where an individual or a Hindu undivided family receives, in any previous year, from any person or persons on or after the 1-10-2009 but before the 1-4-2017,-

(a) any immovable property, --

(i) without consideration, the stamp duty value of which exceeds fifty thousand rupees, the stamp duty value of such property;

(ii) for a consideration which is less than the stamp duty value of the property by an amount exceeding fifty thousand rupees, the stamp duty value of such property as exceeds such consideration: