AI Drafter 
TaxTMI 
TaxTMI 
2020 (9) TMI 568
X X X X Extracts X X X X
X X X X Extracts X X X X
..../- by treating the source of investment in agricultural land to this extent as unexplained. 2.1 Brief facts of the case are that the assessee filed his return of income declaring total income of Rs. 1,96,940/- on 8-07-2014 without specifying the nature of income and nature of business. The assessment was completed u/s 143(3) of the Income Tax Act, 1961 on 30th Dec,. 2016 by ITO concerned by making addition of Rs. 77,74,535/- u/s 56(2)(vii)(b)(ii) of the Act and Rs. 40,94,290/- as unexplained investment on purchase of agricultural land at a total income of Rs. 1,20,65,770/-. 2.2 Aggrieved by the order of the AO, the assessee preferred the appeal before the ld. CIT(A) and the ld. CIT(A) after considering the case of both the parties partly allowed the appeal filed by the assessee. 2.3 Now aggrieved by the order of the ld. CIT(A), the assessee has preferred the present appeal before us on the grounds mentioned hereinabove. 2.4 The Ground No. 1 raised by the assessee relates to challenging the order of the ld. CIT(A) in confirming the addition u/s 56(2)(vii)(b)(ii) of the Act being difference between stamp duty value and purchase value of agricultural land. 2.5 The ld. A....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... which is less than the stamp duty value of the property by an amount exceeding fifty thousand rupees, the stamp duty value of such property as exceeds such consideration Explanation.-For the purposes of this clause,- (d)"property" means the following capital asset of the assessee, namely:- (i) immovable property being land or building or both; (ii) shares & securities (iii) jewellery ................... (ix) bullion Thus as per the above explanation, all moveable or immovable properties of any nature are not covered in the definition of property. Only those moveable or immovable properties which are held as capital assets and which falls in any of the clauses (i) to (ix) are only covered u/s 56(2)(vii). Accordingly, any property which is not a capital asset is not covered within the meaning of moveable or immovable properties u/s 56(2)(vii). In the present case, the agricultural land purchased by the assessee is situated at village Mandana which is at a distance of 28 kms from the municipal limit of Kota. Hence, the agricultural land purchased in the name of assessee is not a capital asset as per the provisions o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....b)(ii) of the Act. Accordingly, the ld. CIT(A) also confirmed the said addition. 2.8 However, in order to decide the controversy in question, it is necessary and imperative for us to first deliberate upon the pure wordings of the provisions of Section 56(2)(vii)(b)(ii) of the Act which reads as under:- "(vii) where an individual or a Hindu undivided family receives, in any previous year, from any person or persons on or after the 1st day of October, 2009 but before the 1st day of April, 2017,- (b) any immovable property,- (i) ............. (ii) for a consideration which is less than the stamp duty value of the property by an amount exceeding fifty thousand rupees, the stamp duty value of such property as exceeds such consideration Explanation.-For the purposes of this clause,- (d)"property" means the following capital asset of the assessee, namely:- (i) immovable property being land or building or both; (iv) shares & securities (v) jewellery ................... (ix) bullion.'' Thus on the plain reading of the above Explanation, it is implicit clear that all the ''moveable'' and ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Kota. Therefore, the agricultural land purchased in the name of the assessee is not a ''capital asset'' as per provisions of Section 2(14) of the Act and it is not covered by the definition of ''property'' given in Explanation to Section 56(2)(vii)(b) of the Act. Thus, we direct the AO to delete the addition. 3.1 The Ground No. 2 of the assessee relates to challenging the order of the ld. CIT(A) in confirming the addition of Rs. 38,38,739/ by treating the source of investment in agricultural land to this extent as unexplained. 3.2 The ld.AR appearing on behalf of the assessee reiterated the same arguments as were raised by him before the Revenue authorities and has also relied on the written submissions submitted before us which are reproduced below. ''1. The AO in the assessment order has observed that assessee has shown income of Rs. 1,96,340/- only in the return of income whereas the agricultural land purchased is Rs. 40,94,290/-. The assessee explained that his father Sh. NainaLalMeena was having agriculture land of 30 bigha which is irrigated. In support of the agriculture income KhasraGirdawari, receipt from sale of crop in KrishiMandi and the affidavit of fat....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 8 & 11 2013-14 (upto 16.12.13) 2,57,126/- 61,450/- 3,18,576/- 9 & 12 Total 12,77,755/- 8,77,649/- 21,55,404/- The above evidence is only an indication of the agriculture income of the assessee. This does not include the sale of lahsun and vegetables which is sold in local market. The average income from sale of lehsun per bigha comes to Rs. 30,000/- to Rs. 35,000/- per bigha, i.e. Rs. 9 to 10 lacs per annum. Similarly the realisation from sale of vegetable is also Rs. 30,000/- to Rs. 40,000/- per bigha, i.e. Rs. 9 to 12 lacs p.a. Therefore, after considering the agriculture expenses and the household expenses, the net saving from agriculture is approximately Rs. 10 lacs p.a. i.e. around Rs. 25,000/- to Rs. 30,000/- per bigha which is quite reasonable. Thus, the source of investment in the agricultural land is out of the agricultural income and savings of the family of past years. 4. The Ld. CIT(A) has considered the agricultural income from FY 2011- 12 to 2013-14 only at Rs. 12,77,755/- as per the ledger account of assessee in the books of Madhav Lal Badri Lal & Sons. He has not considered the evidence of agricultu....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... that there is no dispute as to the facts that source of investment in the agricultural land is out of the agricultural income earned by the family out of the ancestral agricultural land at Village Chadawad. According to the assessee, this land is fully irrigated in which various crops like, wheat, dhaniya, sarso, soyabean, lahsun etc. are cultivated. The ld.AR of the assessee has drawn our attention through letter dated 06-09-2016 (PBP 6) and explained that generally the cultivation of crops is done twice in the year in addition to the seasonable vegetables. The vegetables and Lahsun are sold in local market/ vegetable mandi for which is it not practically possible to get the sale receipts. However, on the contrary, the crops like sarso, soyaabean, wheat, tilli etc. is sold in Krishi Mandi Samiti through Adhatiya for which the mandi receipts are available. The details of such receipts are available. FY Receipt evidence from ledger of artiya Madhav Lal Badri Lal & Sons (in Rs.) Receipt evidence from krishimandi parchi (in Rs.) Total PB Pg 2010-11 Details not available 3,75,744/- 3,75,744/- 11 2011-12 6,93,594/- 2,52,912/- 9,46,506/- 8 & ....