TaxTMI 
TaxTMI 
2025 (5) TMI 1953
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.... passed for A.Y. 2018-19. 2. The Assessee has taken the following grounds of appeal:- "1. The order passed by the Ld. CIT(A) is against law, equity & justice. 2. The Ld. CIT(A) has erred in law and on facts in upholding the action of Ld. A.O. in not considering request of reference to the DVO. 3. The Ld. CIT(A) has erred in law and facts in upholding the addition made U/S 56(2)(x) of the Act for Rs. 72,90,880/- by the Ld. A.O. in respect of purchase of rural agricultural land. 4. The appellant Craves liberty to add, amend, alter or modify all or any grounds of appeal before final hearing." 3. The brief facts of the case are that the assessee filed the income tax return on 30.08.2018, declaring a los....
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....eliance on the Supreme Court's decision in Sarif Abibi Ibrahim (204 ITR 631) in which it was held that agricultural status depends on actual use and intention, and not merely on classification in revenue records. Since the land was not used for agricultural purposes and was bought with a clear intention to convert it, it qualified as a capital asset. Accordingly, the officer held that the provisions of section 56(2)(x) of the Act were attracted, and the difference of Rs. 72,90,880/- between the purchase consideration and the stamp duty value was liable to be taxed as "income from other sources". 4. In appeal, CIT(Appeals) dismissed the appeal of the assessee with the following observations: "6.1.1 Now, before me in the appellate....
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....ee. The Counsel for the assessee submitted that the assessee had objected to the valuation adopted by the AO vide letters dated 28.08.2020 and 19.04.2021, copies of which are placed in the Paper Book, and had specifically requested that the matter be referred to the DVO. The Counsel for the assessee submitted that the addition made without such reference renders the assessment order void and legally untenable. In support, reliance was placed on the decision of the Hon'ble Calcutta High Court in Sunil Kumar Agarwal v. CIT (372 ITR 83), which held that the AO, acting in a quasi-judicial capacity, is duty-bound to fairly offer the assessee an opportunity to opt for DVO valuation under section 50C, even if not specifically requested. Similarly,....
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....y immovable property,- (A) without consideration, the stamp duty value of which exceeds fifty thousand rupees, the stamp duty value of such property; ^72a[(B) for a consideration, the stamp duty value of such property as exceeds such consideration, if the amount of such excess is more than the higher of the following amounts, namely:- (i) the amount of fifty thousand rupees; and (ii) the amount equal to five per cent of the consideration:] Provided that where the date of agreement fixing the amount of consideration for the transfer of immovable property and the date of registration are not the same, the stamp duty value on the date of agreement may be taken for the purposes of this sub-clause : ....
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....neral parlance. In general understanding of the term, the word "Immovable Property" means an asset which cannot be moved without destroying or altering it. Therefore, going by the general definition, "immovable property" would, in our view, include any rural agricultural land, in absence of any specific exclusion in section 56(2)(x) of the Act. Notably, section 56(2)(x) of the Act does not use the word "capital asset". The sale of rural agricultural land is exempt in the hands of the seller since the word "capital asset" has been specifically defined to exclude agricultural land in rural areas under section 2 clause 14. Thus, sale of rural agricultural land shall not give rise to any capital gains in the hands of the seller as it is not con....
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....ral land cannot be taken out of the purview of section 56(2)(x) of the Act. 13. However, in the case of Dilip Manibhai Prajapati vs. Income-tax Officer [2024] 164 taxmann.com 224 (Ahmedabad-Trib.)[28-06-2024], the ITAT Ahmedabad held that where assessee purchased agricultural land at price lower than stamp value of land, however FMV of land determined by DVO was within 10% of purchase price, showing no significant difference from purchase consideration, no addition under section 56(2)(x) was warranted. The ITAT in the above order held that from bare perusal of section 56(2)(x), wherein any person receives an immovable property for purchase consideration which is less than the stamp duty value the difference is liable to be taxed in his h....