Addition u/s 56(2)(vii)(b)

[Haresh Raithatha]

Dear sir

One of my client had purchased Agricultural land for ₹ 32 lacs jointly with 3 co-owners in F Y 14-15. He is having other income of ₹ 2.50 lacs (Agricultural income ₹ 7.25 lacs) during the F.Y. 2014-15. Value u/s 50 (c) is ₹ 90 lacs. The case is selected under scrutiny and AO want to Add ₹ 14.50 lacs (1\4th share) in the Assessment u/s 56 (2)(vii)(b).

Please adivse.

AI Summary

Addition under 56(2)(vii)(b) on excess statutory valuation proposed as taxable income of a co-owner.
A taxpayer jointly purchased agricultural land for a stated consideration that is substantially below the statutory valuation; the Assessing Officer, in scrutiny assessment, proposes to add the one-quarter share of the excess between the statutory valuation and consideration to the taxpayer's income under 56(2)(vii)(b), and requests the AO's reason for treating that valuation excess as the assessee's taxable income.