TaxTMI 
TaxTMI 
2026 (9) TMI 447
X X X X Extracts X X X X
X X X X Extracts X X X X
....as per the registered sale deed, the stamp duty paid on purchase value was Rs. 77,96,500/- as per stamp duty paid, the stamp duty value of the said property worked out at Rs. 15,91,12,245/-. Therefore, the AO show caused the assessee vide notice dated 11.03.2024 to explain as to why addition of difference of stamp duty value and actual purchase value declared i.e. Rs. 10,97,76,245/- (Rs.15,91,12,245 - Rs. 4,93,36,000) should not be added to the income of the assessee under the head 'income from other sources' by invoking provisions of section 56(2)(x) of the Act. 2.1 In response, the assessee submitted that it is engaged in the business of Real Estate Development. The following companies were amalgamated with the assessee company w.e.f. 01.04.2019 vide approval order of the National Company Law Tribunal dated 22.03.2021 and in terms of the said approval order, all the assets and the liabilities of the amalgamated companies have been deemed to be transferred to the assessee w.e.f. 01.04.2019. i. Citygold Logistics Limited ii. Himalay Darshan Developers (Gujarat) Private Limited iii. Suryanagari Securities and Investments Limited 2.2. It was submitted....
X X X X Extracts X X X X
X X X X Extracts X X X X
....contentions of the Ld. Representative of the parties and gone through the record. 3.1. The Ld. Counsel for the assessee has submitted that it is not a simple case where the value adopted by the Stamp Duty Authority was more than the actual consideration paid by the assessee and, therefore, the provisions of Section 56(2)(x) of the Act would be attracted. She has submitted that, in this case, the controversy has arisen due to the change of character of the land from agricultural to non-agricultural. Since, the stamp duty value of non-agricultural land was more than the agricultural land, hence, the AO ignoring the agreement to sale entered by the assessee for the land in question whilst its character was agricultural, has taken the stamp duty value of the land as applicable for non-agricultural land at the time of execution / registration of the sale deed. The Ld. Counsel for the assessee has also contended that since he had been consistently challenging the stamp duty value of the land, therefore, in terms of provisions of Section 56(2)(x) of the Act, the AO / Ld. CIT(A) ought to have referred the valuation of the land to the DVO. She has further, contended, that in fact, there ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d liabilities of the amalgamated company into the assessee are concerned. Now, the short issue left for adjudication before us is 'whether the provisions of Section 56(2)(x) of the Act have been rightly invoked in the case of the assessee for making addition on account of difference in the stamp duty value for non-agricultural land and the purchase consideration of immovable property as mentioned in the sale deed as agreed in the agreement to sale dated 31.03.2011. 3.5. Before, proceeding further, it is pertinent to mention here that it is not the case of the AO/Department that any consideration over and above the consideration mentioned in the sale deed has exchanged hands. The entire dispute is regarding the applicability of presumption u/s 56(2)(x) of the Act. 3.6. It has been explained that in the State of Gujarat, there is a prohibition of sale/purchase of agricultural land for non-agricultural purposes and that a non-agriculturist is not allowed to purchase agricultural land. Since, the assessee was not agriculturist and the land was intended to be used for non- agricultural purposes / Real Estate Development, therefore, there was a bar for the sellers to sell the land ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....le property,-- (A) without consideration, the stamp duty value of which exceeds fifty thousand rupees, the stamp duty value of such property; (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 ten 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: Provided further that the provisions of the first proviso shall apply only in a case where the amount of consideration referred to therein, or a part thereof, has been paid by way of an account payee cheque or an account payee bank draft or by use of electronic clearing system through a bank account [or through such other electronic mode as may be prescribed], on or before the date of agreement for transfer of such immovable property; Provided ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....time of sale. Under the circumstances, we have to consider the other evidences available on record to hold as to whether the assessee has been able to rebut the presumption u/s 56(2)(x) of the Act. 6.1 It is undisputed that the assessee in this case has consistently disputed the market value of the land in question. It was the case of the assessee that the higher stamp duty value has been charged only because of the change of character of the land in the land revenue records, otherwise, there was no change or increase in the market value of the land because of any development or improvement of the land in question or in the vicinity. As observed above, the presumption u/s 56(2)(x) as in Section 50C of the Act is rebuttable. In our view, such a presumption can be rebutted not only by referring the matter to the DVO to assess the market value of the property, but also, the assessee may prove his contention with other reliable evidences to show that the market value of the property in question was lesser than the stamp duty value and there may be instances of lesser value owing to certain factors, such as, the property in question being under litigation, ownership disputed or under....
X X X X Extracts X X X X
X X X X Extracts X X X X
....and the expenses being borne by the assessee, hence, it is evident that the agreement to sale was entered between the parties prior to 04.02.2016. Further, the payment having been made through banking channel to the seller for charges for conversion of land shows that the parties have acted as per the terms of the agreement. Moreover, after change of character as non-agricultural land, the 40% part / area of the land has been retained /taken by the Government and only 60% area returned to the seller, however, the sale deed has been entered as per the original agreement and sale consideration paid of the full (100%) land as per the terms of the agreement. These facts on the file rebuts presumption u/s 56(2)(x) of the Act beyond doubt. 6.4 Even otherwise, it is the market value at which the sale consideration can be presumed by the AO, taking the stamp duty value as the yard stick, for making addition u/s 56(2)(x) of the Act, however, it is not the case of the AO that the market value of the land in question had increased, rather, it is only because the stamp value for transfer of non-agricultural land is higher than the agriculture land, there being no evidence on the file of any....