Vinay Indersing Dhupia Vs ITO (ITAT Surat)
The Surat ITAT held that section 56(2)(x) applies to “any immovable property”, and therefore even agricultural land falls within its ambit. The assessee had argued that the land purchased was agricultural land and not a “capital asset”, and hence outside the scope of section 56(2)(x). Rejecting the contention, the Tribunal clarified that the concept of “capital asset” is relevant in the seller’s hands for capital gains taxation, but not in the buyer’s hands for section 56(2)(x).
The assessee had purchased agricultural land along with co-owners at a value substantially lower than the stamp duty valuation. Though the AO initially proposed addition based on stamp duty value, he accepted the assessee’s alternate plea to adopt the lower valuation determined by the DVO in a co-owner’s case. The addition was accordingly restricted to the difference between the DVO value and the actual purchase consideration.
The Tribunal further observed that once the assessee himself relied on the DVO’s report for relief from the higher stamp duty valuation, he could not later challenge the same DVO report as incorrect. Finding no infirmity in the DVO-based computation, the ITAT upheld the addition under section 56(2)(x) and dismissed the appeal.
AUTHOR’S VIEW
It is respectfully submitted that the reasoning given by the Tribunal, in humble opinion of the author, appears to be incorrect.
