Rajaviri Vs ITO (ITAT Delhi)
Delhi ITAT Deletes Section 56 Addition as Revenue Failed to Establish Agricultural Land Was a Capital Asset
The Delhi ITAT deleted the addition of ₹7,58,232 made under section 56 in respect of the purchase of agricultural land at a value lower than the stamp duty value. The Assessing Officer had invoked section 56 by treating the difference between the assessee’s share of the stamp duty value and the actual purchase consideration as income from other sources. The CIT(A) upheld the addition on the ground that the assessee had failed to produce contemporaneous evidence to rebut the stamp duty valuation.
Before the Tribunal, the assessee contended that section 56 was inapplicable because the land purchased was agricultural land and there was no finding by the Revenue that it constituted a capital asset within the meaning of Explanation (d) to section 56. The Tribunal accepted this contention, observing that neither the assessment order nor the appellate order contained any clear finding that the land was a capital asset for the purposes of section 56.
Holding that the very foundation for invoking section 56 was absent, the Tribunal deleted the addition of ₹7,58,232 without examining the dispute regarding the stamp duty valuation. The assessee’s appeal was accordingly allowed.
FULL TEXT OF THE ORDER OF ITAT DELHI
