Capital asset condition under section 56(2)(vii) controls deeming addition on land purchase; unsatisfied precondition defeats the addition.

Section 56(2)(vii) applies only where property is a capital asset within section 2(14) and the statutory stamp duty value comparison is satisfied. Where the land purchased was not shown to be a capital asset and the lower authorities failed to establish the statutory precondition for the deeming addition, the addition could not be sustained and was directed to be deleted.

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Issues: Whether addition under section 56(2)(vii) could be sustained in respect of land purchase where the asset was not shown to be a capital asset.

Analysis: Section 56(2)(vii) applies only when an assessee receives property in the nature of a capital asset, and the provision is triggered by comparison with the stamp duty value. The orders of the lower authorities did not show that the land purchased by the assessee was a capital asset within the meaning of section 2(14), nor that the statutory condition for invoking the deeming addition was satisfied.

Conclusion: The addition under section 56(2)(vii) was not sustainable and was directed to be deleted.

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