TaxTMI 
TaxTMI 
2024 (10) TMI 1760
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....short 'the Ld. CIT(A)'] for assessment year 2018-19. 2. The grounds raised by the Revenue are reproduced as under: 1. Whether on the facts and circumstances of the case and in law, Ld. CIT(A) has erred in considering market value of the property, viz Plot at CTS No. 565 & 566, Newatia Road Malad (W) as on sale agreement date 15.03.1978 for application of provisions of section 56(2)(x) of the Act, when registration/ conveyance of sale deed has been done on 23.03.2018 2 (b) Whether on the facts of the case and in law, the Ld. CIT (A) has erred in directing the AO to consider the valuation of property as on 15.03.1978 determined by the district valuation officer, for application of provisions of section 56(2)(x) of....
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...., on the facts and circumstances of the case, the Assessing Officer may be directed to consider Agreement Value as 'Stamp Duty Value' as on date of Agreements and thereby delete the addition made under section 56(2)(x) of the Act. 3. Briefly stated, facts of the case are that the assessee, a partnership firm, was engaged in the business of real estate development. For the year under consideration, the assessee filed return of income on 25.06.2018 declaring total income at Rs. 8,18,890/-. The return of income filed by the assessee was selected for limited scrutiny for verification of the fact that purchase value of the property recorded in the sale consideration was less than the value as per the stamp duty value authorities. The ....
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....lue authorities. The Assessing Officer rejected the submission of the assessee and held the sale consideration at Rs.80,34,09,000/- and computed the addition in terms of section 56(2)(x) of the Act. 4. On further appeal, the assessee submitted that property in dispute was stock-in-trade and therefore, the provisions of section 56(2)(x) of the Act were not applicable in the case of the assessee. The assessee also contested that provisions of section 56(2)(x) of the Act have been inserted by way of Finance Act, 2009 w.e.f. 01.10.2009 and whereas property in dispute were entered in the books of accounts of the assessee as stock-in-trade in the assessment year corresponding to the previous year 1977-1978 and therefore said provisions cannot ....
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....on that the captioned property as purchased in 1978 has been treated as stock in trade and accepted as such in assessment proceedings in those years is evident from the perusal of assessment orders and its financial statements. The Appellant still shows the said land as its stock in trade in its financials of A Y 2018-19 and stamp duty paid during the year added to the said plot treated as stock in trade/ work in progress. The Assessing Officer has not disputed the said treatment or rejected the books of accounts or given any deduction of stamp duty paid while making addition under section 56(2) (x) of the Act. The A O has not brought on record any material which may point out / conclude that the captioned property is a different property."....
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....ovisions 56(2)(x) of the Act. The contention of the appellant on this ground is therefore rejected as dismissed and not admissible." 8.1 Before us, the Ld. counsel for the assessee has referred to the decision of the Co-ordinate Bench of the Jaipur in the case of Satendra Kaushik v. ITO [2019] 106 taxmann.com 244 (Jaipur) (Trib.), wherein it is held that provisions of section 56(2)(x) of the Act have application to the property which is in the nature of the capital asset of the recipient. In said case, the assessee purchased a piece of land as its stock-in-trade, therefore, addition made by the Assessing Officer invoking provisions of section 56(2)(x) of the Act was set aside. The relevant finding of the Co-ordinate Bench of the Tribunal....
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....0. In the totality of above definitions, we hold that agricultural land purchased by assessee is not governed by the provisions of section 56(2)(vii)(6) of the Act being not capital asset and also because of the fact that the assessee was holding it as stock in trade. Hence, it is outside the purview of said section and no addition has to be made in the hands of assessee." 8.3 Respectfully, following above decisions of Tribunal, we hold that section 56(2)(x) of the Act cannot be invoked in the case of the transactions of the assessee, which are undisputed for purchase of stock in trade. Further, the provisions of section 56(2)(x) of the Act have been introduced by Finance Act, 2009 w.e.f. 01.10.2009, whereas transaction of the purchase o....