2026 (7) TMI 549

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....ing Officer u/s 56(2)(x) of the Act. 3. Brief facts of the case are that the assessee company is engaged in the business of trading in solar PV module and solar products. A search and seizure action u/s 132 was conducted in the Waaree Group on 20.11.2018. During the course of search, various purchase agreements relating to agricultural lands purchased by the assessee in villages Gogaon and Waghdari, Taluka Akkalkot, District Solapur were found. On examination of the agreements, the Assessing Officer noticed that the stamp duty valuation of the lands exceeded the purchase consideration. The aggregate difference for the year under consideration was worked out at Rs. 4,25,10,900/-. The Assessing Officer was of the view that the assessee had....

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....ovable property being land or building and therefore the differential amount between the stamp duty value and purchase consideration was rightly brought to tax under section 56(2)(x). It was accordingly contended that the Ld. CIT(A) was not justified in deleting the addition. 6. Per contra, the Ld. AR supported the order of the Ld. CIT(A). The Ld. AR submitted that the lands in question were admittedly rural agricultural lands situated in villages having population below 10,000 and located beyond the prescribed municipal limits. The agricultural character of the lands was never disputed by the Assessing Officer. It was submitted that even the revenue records and 7/12 extracts demonstrated cultivation on the lands. Merely because the asse....

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....sets in its balance sheet. 9. In our considered view, the aforesaid reasoning adopted by the Assessing Officer is not sufficient to alter the legal character of the lands. The character of the property has to be examined on the date of acquisition with reference to the statutory provisions. Rural agricultural land falling outside the ambit of section 2(14)(iii) does not constitute a capital asset under the Act. The expression "property" occurring in section 56(2)(x) has been interpreted by various coordinate benches to cover only such immovable property which qualifies as a capital asset. The Ld. CIT(A) has examined the factual matrix in detail and has also relied upon judicial precedents holding that rural agricultural land is outside t....