TaxTMI 
TaxTMI 
2021 (1) TMI 832
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....irming finding recorded by the assessing officer that the provisions of Section 56(2)(vii)(b) of the I.t. Act, 1961 are applicable to the purchase of agriculture land(s) situated outside 8 KM of municipal area inasmuch as such agriculture land is not covered in the definition of property as given in clause (d)of explanation to said Section. The addition of Rs. 1401540 made to the income of the appellant and as confirmed by the ld. CIT(A) on this count on account of difference of DLC value and purchase consideration of Agriculture land(s) is therefore wrong, unwarranted and bad in law. 2. That the appellant craves the permission to add to or amend to any of the above grounds of appeal or to withdraw any of them." 2. The hearing of the appeals was concluded through video conference in view of the prevailing situation of Covid-19 Pandemic. 3. The brief facts of the case are that the assessee is an individual deriving income from capital gain and other sources. A search was carried out u/s 132 of the Income Tax Act, 1961 (in short, the Act) on 07-01-2016 in case of Dilip Manihar group in which assessee was also covered. The assessee filed his return of income u/s 139 of ....
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....i) (b) of the Act were not applicable on the same. The A.O. thereafter reproduced provisions of section 56 (2) (vii) (b) of the Act and relying thereon held that contention of assessee is not acceptable and added Rs. 14,01,540/- in the hands of assessee in declared income. 4. Being aggrieved by the order of the A.O., the assessee carried the matter before the ld. CIT(A), who after considering the submissions of the parties and after perusing the material placed on record, upheld the order of the A.O. by observing as under: "5. I have perused the written submissions submitted by the Ld. A/R and the order of AO. I am not in agreement with the Ld. A/R for the following reasons: That the section 56(2)(vii)(b) is applicable to 'any immovable property'. Now the property is defined in the explanation to the same read as under: Explanation - for the purposes of this clause--- (a) ********; (b) *******; (c) *******; (d) Property"[means the following capital asset of the assessee, namely:-] (i) immovable property being land or building or both; (ii) shares and securities; (iii) jewellery; (i....
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....e Ld. A.O. thereafter relied on provisions of section 56 (2) (vii) (b) in respect to property acquired by assessee and reproduced the same in assessment order. The Ld. A.O. only picked the word immovable property from section 56 (2) (vii) (b) but the immovable property being also property r/w definition of income in section 2 (24) (xv) so section 56 (2) (vii) (b) is to be r/w explanation (d) and the mention of immovable property in clause 56 (2) (vii) (b) is within the meaning of said explanation (d) to sub-section 56 (2) (vii). The Ld. A.O. also reproduced part of Explanation (d) under this section while reproducing provisions of section 56 (2) (vii) (b) but has not applied it at all in proper perspective and correct position of law. The Explanation (d) to section 56 (2) (vii) (b) reads as under: - "property" [means the following capital asset of the assessee, namely:-] (i) immovable property being land or building or both; (ii) shares and securities; (iii)jewellery; (iv) archaeological collections; (v) drawings;] (vi) paintings; (vii)sculptures, [***] (viii)any work of art; [or] (ix) bullion....
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....e us and we have also gone through the orders passed by the revenue authorities. We observe from perusal of the record that the only ground raised by the assessee before us is challenging the order of the ld. CIT(A) in confirming the findings of the A.O. to the effect that the provisions of Section 56(2)(vii)(b) of the Act are applicable to the purchase of agricultural land situated outside 8 KM of municipal area. As per the facts of the case, the assessee alongwith Shri Anil Parwal purchased a land at village Jatwara, Tehsil Bassi, Jaipur on 08.09.2014. It was also observed that while the DLC value of the said property was Rs. 23,02,400/-, it was purchased for only Rs. 13,10,000/-. Since, the assessee and Sh. Anil Parwal have jointly purchased this property, the share of the assessee comes out as Rs. 6,55,000/-. Similarly, the assessee along with Smt. Nirmala Maheshwari purchased a land at village Bagru Kalan, Tehsil Sanganer, Ajmer Road, Jaipur on 28.04.2014. It was also observed that while the DLC value of the said property was Rs. 48,00,679/-, it was purchased for only Rs. 29,90,000/-. Since, the assessee and Smt. Nirmala Maheshwari have jointly purchased this property, the sha....
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....(vii) (b) of the Act. However, the definition of capital asset is given in Section 2 (14) of the Act. The clause (iii) of Section 2 (14) specifically excludes agricultural land of the description given therein from capital asset which means that agricultural land which are outside 8 KM of the municipal limits are not held to be capital asset and as per the facts of the present case, the agricultural land purchased by the assessee falls in the definition of agricultural land as is given in Section 2 (14) (iii) of the Act, so the same cannot be termed as capital asset. Since the agricultural land purchased by the assessee is not a capital asset, therefore, provisions of Section 56 (2) (vii) (b) of the Act are not applicable as the agricultural land which are not capital asset and are outside the ambit/purview of capital asset. In other words, provisions of Section 56 (2) (vii) (b) of the Act applies only to those immovable properties being land or building or both if it falls within the definition of capital asset. While reaching to this conclusion, we draw strength from the decision of Coordinate Bench of Pune Benches, Pune in the case of Mubark Gafur Korabu Vs ITO, Ward-2, Pune (11....