TMI Blog2019 (4) TMI 1508X X X X Extracts X X X X X X X X Extracts X X X X ..... isions contained in sub-section (14) of section 2 of the Act clearly state that the agricultural land beyond the municipal area is not to be included in the definition of capital asset. In the present case, the A.O. added the notional value i.e. the difference in actual consideration and stamp duty value, in the hands of the assessee under the head income from other sources . In the instant case, the assessee disclosed all the true facts relating to the land and nothing was concealed, therefore, it may be a good case for making addition since there was difference between the actual consideration and the stamp duty value. It is well settled that the penalty proceedings are different and distinct from the assessment proceedings. In the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the said land at ₹ 7,00,000/-. The A.O. was of the view that as per provisions of clause (vii) of sub-section (2) of section 56 of the Act, the difference between stamp duty value and consideration was liable to be assessed as income under the head income from other sources . The A.O. asked the assessee to explain as to why provisions of section 56(2)(vii) of the Act should not be applied in respect of immovable property purchased for ₹ 3 lacs as against stamp duty value of ₹ 7,00,000/-. The reply of the assessee was considered but not accepted by the A.O. and the amount of ₹ 4,00,000/- being difference of stamp duty value and purchase consideration of land was added to the taxable income of the assessee under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce could have been made? b). Though the addition in respect of the same has been made and same has not been challenged whether the penalty under Section 271(1)(c) as imposed is legally sustainable? 3. As far as the issue No. 1 is concerned, it is most respectfully submitted that the assessee had purchased the agricultural land measuring 00-21-64 hectares and the land was agriculture in nature outside the municipal area. It is pertinent to mention that Section 56 is only applicable to the assets which are capital assets under the law as defined vide explanation (d) to Section 56 which is being reproduced infra: (d) property means the following capital asset of the assessee, namely:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of income and concealment are positive facts with an intent to defraud the revenue. In the instant case part from the fact that stamp duty valuation was more, no positive facts of the assessee having purchased the property for consideration of more than the agreed consideration has been placed on record by the Ld. A.O. 8. Just because the property was having more value for stamp duty valuation, does not tantamount to the facts of having concealed the income or furnishing inaccurate particulars in respect of the same. 9. As the addition itself is wrong and coupled with the fact that the assessee had disclosed complete particulars, no penalty under Section 271(1)(c) is leviable in the instant case and the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i)(b)(ii) of the Act which the appellant failed to declare. Hence the appellant failed to declare the deemed income which required to be offered as income in the return as per law. The appellant did not qualify his return and also failed to make the said disclosure. In this context, it has to be inferred that the appellant tried his luck in not offering the aforementioned income for taxation. The appellant has not been able to establish the bonafide of his claim on that score. 7. Now the assessee is in appeal. The Ld. counsel for assessee reiterated the submissions made before the authorities below and further submitted that nothing was concealed and the provisions of section 56(2)(vii) of the Act were no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, which defines the capital asset. The provisions contained in sub-section (14) of section 2 of the Act clearly state that the agricultural land beyond the municipal area is not to be included in the definition of capital asset. In the present case, the A.O. added the notional value i.e. the difference in actual consideration and stamp duty value, in the hands of the assessee under the head income from other sources . In the instant case, the assessee disclosed all the true facts relating to the land and nothing was concealed, therefore, it may be a good case for making addition since there was difference between the actual consideration and the stamp duty value. It is well settled that the penalty proceedings are different and distinc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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