Vikas Ratanlal Jain Vs ITO (ITAT Pune)
Stock-in-Trade Exemption: ITAT Remands Section 56(2)(vii)(b) Addition for Fresh Verification; Stamp Duty Value Dispute Remanded: ITAT Orders Review of F.Y. for Property Purchase Assessment; Incorrect Asset Classification: ITAT Directs Reassessment on Applicability of Section 56(2)(vii)(b); Cost of Acquisition Issue: ITAT Remands Valuation Case to Consider Nazarana and Advance Payments
Assessee purchased two plots for consideration lower than stamp duty value, leading AO to make addition of ₹21,00,475/- u/s 56(2)(vii)(b) as “income from other sources”. PCIT had earlier invoked Section 263, setting aside the original assessment for lack of enquiry, & AO subsequently added the difference between purchase price & stamp value. CIT(A) upheld the addition.
Before Tribunal, Assessee contended that:
- The plots were held as stock-in-trade, not capital assets; hence Section 56(2)(vii)(b) did not apply.
- Sale of plots in A.Y. 2016-17 was offered as business income, evidencing intention for trading.
- Nazarana/fees of ₹55.89 lakh were paid to Municipal Corporation, which should form part of cost.
- The agreement to purchase was executed in F.Y. 2011-12, with part payment made then; thus stamp duty value of that year should apply per proviso to Section 56(2)(vii)(b).
ITAT observed that authorities below had not examined these aspects or verified whether land was truly held as stock-in-trade. It held that determination of nature of asset & cost components required factual verification.
