Case Law Details
Shri Yogesh Maheshwari Vs DCIT (ITAT Jaipur)
Facts-The assessee, an individual, is deriving income from capital gain and other sources. A search was carried out u/s 132 on 07-01-2016 in case of Dilip Manihar group in which assessee was also covered. The assessee filed his ROI u/s 139 on 30-03-2016 declaring total income of Rs. 11,05,320/-.
The assessee during the year under consideration alongwith Sh. Anil Parwal purchased a land at village Jatwara, Tehsil Bassi, Jaipur on 08.09.2014. The DLC value of the said property was Rs. 23,02,400/-, it was purchased for only Rs. 13,10,000/-. Since, the assessee and Sh. Anil Parwal have jointly purchased this property, the share of the assessee comes out as Rs. 6,55,000/-. Similarly, the assessee alongwith Smt. Nirmala Maheshwari purchased a land at village Bagru Kalan, Tehsil Sanganer, Ajmer Road, Jaipur on 28.04.2014. The DLC value of the said property was Rs. 48,00,679/-, it was purchased for only Rs. 29,90,000/-. Since, the assessee and Smt. Nirmala Maheshwari have jointly purchased this property, the share of the assessee comes out as Rs. 14,95,000/-.
The A.O. issued notice u/s 143(2) and took up assessment proceedings u/s 153B(1)(b) for the assessment year under consideration. Show cause notice was issued alleging why the difference amount should not be held as income from other sources in terms of Sec. 56 (2) (vii) (b) of the Act and accordingly added his total income.
Conclusion- It is abundantly clear that immovable property being land or building or both should be capital assets for applying section 56(2) (vii)(b). However, definition of “capital asset” is given in section 2(14). Clause (iii) of section 2(14) specifically excludes agricultural land of the description given therein from capital asset which means that agricultural land was outside 8 Km. of municipal limits. Accordingly, agricultural land purchased by assessee was not a capital asset and, therefore, section 56(2) (vii)(b) was not applicable to assessee’s case.
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