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2020 (7) TMI 188 - AT - Income TaxAddition u/s 56(2)(vii)(b) - Whether property acquired by the assessee was not a capital asset? - nature of immoveable property which has been purchased by the assessee - difference between the sale consideration as per the sale deeds and the stamp valuation determined by the Stamp Valuation Authority - As contended that the assessee had purchased two pieces of agriculture land during the year and the agriculture land not being a capital asset, the provisions of section 56(2)(vii)(b) are not applicable - HELD THAT:- Only those immovable properties which are held as capital assets and is in nature of land or building or both are only covered u/s 56(2)(vii). We agree with the contention of the ld AR that where the term “property” has been defined to mean a capital asset as so specified and where an immoveable property as so specified being land, building or both is not held as an capital asset, it will not be subject to the provisions of section 56(2)(vii)(b) of the Act. In the instant case, therefore, where the agricultural land doesn’t qualify as falling in the definition of capital asset, provisions of section 56(2)(vii)(b) cannot be invoked. In the instant case, whether agriculture land so acquired falls in the definition of capital asset or not, one has to refer to the provision of section 2(14) which exclude agriculture land in India subject to certain exceptions. However, there are no findings of the lower authorities in this regard. Therefore, we deem it appropriate to set-aside the matter to the file of the AO for the limited purposes of examining whether the two plots of agricultural land so acquired falls in the definition of capital asset or not. We find that the AO has not appreciated the objection of the assessee regarding adoption of DLC value as against the sale consideration. Therefore, where the assessee has objected to the stamp duty valuation, as per the provisions of section 50C(2) of the Act which are equally relevant for the purpose of provisions of section 56(2)(vii)(b)(ii) of the Act, the matter should have been referred by the Assessing Officer to the DVO for determination of fair market value. Therefore, in the instant case, where it is so determined by the Assessing officer that the agricultural land so acquired falls in the definition of capital asset, he has to refer the matter to DVO to further determine the fair market value of the two plots of agricultural land and thereafter, decide the matter afresh. Appeal of the assessee is allowed for statistical purposes.
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