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2019 (7) TMI 286 - AT - Income TaxAddition u/s 56(2)(vii)(b)(ii) - suppression of purchase price of land in the hands of the assessee - applicability on stock in trade - HELD THAT:- The provisions of section 56(2)(vii) were introduced as a counter evasion mechanism to prevent laundering of unaccounted income. The provisions were intended to extent the tax net to such transactions in kind. The intent is not to tax the transactions entered into in the normal course of business or trade, the profits of which are taxable under specific head of income. Therefore, the definition of property has been amended to provide that section 56(2)(vii) will have application to the ‘property’ which is in the nature of a capital asset of the recipient and therefore would not apply to stock-in-trade, raw material and consumable stores of any business of such recipient. However, a property is defined in a very specific way, which includes agricultural and non-agricultural land or both. It appears that the lower authorities have not properly appreciated the relevant provisions of the Act with regard to the land purchased by the assessee, which is part of stock-in-trade. In the substantial interest of justice, we restore the matter back to the file of the AO for deciding the matter afresh after giving due opportunity of hearing to the assessee. - Appeal of assessee is allowed for statistical purpose.
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