Case Law Details
ITO Vs Shri Trilok Chand Sain (ITAT Jaipur)
In the instant case, the assessee has purchased three plots of land during the year under consideration. The sale consideration as per the respective sale deeds amounts to Rs 23,00,000 and the stamp duty value of such properties as determined by the Stamp duty authority amounts to Rs 1,74,06,224/- and therefore, there is difference to the tune of Rs 1,51,06,224/- between the sale consideration as per the sale deeds and the stamp valuation determined by the Stamp Valuation Authority. To this extent, the facts are not disputed and have been accepted by both the parties.
The limited point of dispute is the nature of immovable property which has been purchased by the assessee. The assessee’s contention is that which he has purchased are three plots of agricultural land and the same doesn’t fall in the definition of capital asset as per the provisions of Section 2(14) of the Act and provisions of section 56(2)(vii)(b) cannot be invoked.
The Revenue’s contention is that the provisions of Section 56(2)(vii)(b) talks about any immovable property and thus even an agriculture land falls under the definition of an immovable property and the provisions of Section 56(2)(vii)(b) are clearly attracted.
On reading of provisions of 56(2)(vii)(b), we find that it refers to any immovable property and the same is not circumscribed or limited to any particular nature of immovable property. It refers to any immovable property which by its grammatical meaning would mean all and any property which is immovable in nature, i.e, attached to or forming part of earth surface.
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Section 56(2)(vii)(b) speaks of any immovable property and explanation (d) defined property which says that “property means the following capital asset of the assessee namely ….”
Capital Asset has been defined u/s 2(14) and its clause (iii) excludes rural agricultural land.
Therefore, in my opinion Rural Agricultural Land is not considered as Capital Asset, and therefore it is not a property for the purpose of s. 56(2)(vii). Thus, the difference in value as adopted for the purpose of Stamp Duty and the actual consideration paid shall not become income of the assessee who purchased rural agricultural land.
In the new section 56(2)(x) also there is reference to the definition of property as contained in subsection (vii)
It appears that the attention of the Honourable ITAT was not drawn to the above provisions.
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