Smt Kiran Lata Bhadoria Vs ITO (ITAT Agra)
Rural Land or Not? Rs.5.24 Cr 56(2)(vii) Addition Reopened—New Evidence Changes Landscape- ITAT Orders Fresh Probe into 8-km Distance Claim
Assessee purchased agricultural land on 12-08-2014 for Rs.73,06,000, but stamp valuation was Rs.5,97,40,000. AO made two major additions: (i) Rs.42,22,250 as unexplained investment u/s 69, being stamp duty & registration expenses paid in cash; (ii) Rs.5,24,34,000 u/s 56(2)(vii) as differential between stamp value & declared purchase price.
Assessee explained that cash of Rs.42,22,250 came from sale proceeds of land received in AY 2013-14 & loan of Rs.72,95,000 from Shatabdika Mahila Kalyan Samiti, submitting confirmations, bank statements & past computation. AO rejected cash explanation on the logic that no prudent person would keep large cash for long despite having bank accounts.
On the second issue, Assessee argued that land was rural agricultural land, located beyond 8 km from municipal limits & therefore not a capital asset u/s 2(14), hence s.56(2)(vii) could not apply. AO deputed Inspector whose report (page 4) measured distance as 4.5 km from municipal limit; AO rejected Tehsildar’s earlier certificate as unauthenticated & made full addition.
Before Tribunal, Assessee filed extensive additional evidences under Rule 29:
- bank statements & cash-flow for AYs 2013-14 to 2015-16;
- extracts from Tehsildar register confirming the certificate dated 23-04-2019;
- Registered Valuer’s certificate (27-03-2025) certifying 8.3 km distance from Gwalior municipal limits along with municipal boundary notification;
- valuation report showing FMV lower than stamp duty value ;
- NOC from Collector & FIR copy.
Tribunal held these additional evidences to be crucial for adjudication & found Assessee had reasonable cause for not filing them earlier. Since they require factual verification, Tribunal set aside the issues to AO for de-novo adjudication in light of all additional evidences, giving liberty to Assessee to file more documents. Appeal allowed for statistical purposes.
