TMI Blog2021 (9) TMI 449X X X X Extracts X X X X X X X X Extracts X X X X ..... ITAT PUNE ] and in Yogesh Maheshwari [ 2021 (1) TMI 832 - ITAT JAIPUR ] Therefore, we find merit in the submission of the ld.AR of the assessee that provision of section 56(2)(vii)(b) of the Act are of the Act not applicable in the present case. - Decided in favour of assessee. - ITA No.304/SRT/2018, ITA No.305/SRT/2018, ITA No.306/SRT/2018 - - - Dated:- 7-9-2021 - Shri Pawan Singh, Judicial Member And Dr. Arjun Lal Saini, Accountant Member For the Assessee : Shri Suresh K. Kabra CA For the Revenue : Ms. Anupama Singla Sr.DR ORDER UNDER SECTION 254(1) OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER: 1. These three appeals by three assessee s are directed against the common order of ld. Commissioner of Income tax (Appeals)-3, Surat dated 06.03.2018 for the assessment year (AY) 2014-15. In all appeals the facts are common, the assessee s in all cases has raised identical grounds of appeal, therefore, all appeals are clubbed, heard and decided by the consolidated in the common order. For appreciation of facts ITA No.304/SRT/2018 is treated as lead case. 2. The assessee has raised grounds of appeal as under: 01. The Ld CIT-A w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that during the relevant period the assessee purchased rural agricultural land at block no.59, village Chaltan, District Surat. The assessee contended that addition under section 56(2)(vii)(b)(ii) of the Act cannot be made against the assessee as the assessee has purchased agricultural land, which is situated beyond 8 km from local municipal limit and that, the agricultural land, is not a capital asset. It was further explained that in section 596(2)(vii)(b), reference is made to immovable property and as per Explanation (d), property means capital asset specified in item no [i to ix] of the said Explanation. The definition of capital asset is prescribed under section 2(14) of the Act and as per said definition, rural agricultural land situated beyond 8 km from local municipality unit is not regarded as capital asset. Consequently, the provision of section 56(2)(vii)(b) are not applicable to the property which is not a capital asset . The assessee also furnished the certificate of Deputy Executive Engineer (R B) Panchayat Sub-Division, Palsana, certifying that agricultural land purchased by assessee is situated beyond 8 km of local limit of Surat Municipal Corporation (SMC). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ady taken a contrary view in appeal No.CAS/3/334/16-17 dated 17.12.2017. The ld.CIT(A) further held that the submission of assessee is misplaced. The explanation appears in clause C of section 56(2)(vii)(b)(ii) and it starts for the purpose of this clause, which makes it clear that the explanation is for clause-(c) and not for clause-(b). the relevant part of the order passed by Ld. CIT(A) is extracted below: 7.6 The reliance of the AR on explanation reproduced above is misplaced. The explanation appears after clause(c) of the section and it starts For the purposes of this clause.' Which makes it clear that the explanation is for clause (c) and not for clause (b).This is further clear from the reading of the explanation itself. The explanation doesn't pertain to phrase immovable property as used in 56(2)(vii)(b) but to the word 'property' used in clause (c) of sec.56(2)(vii) in the phrase any property, other than immovable property . The AR has tried to apply this explanation to the word property which is part of immovable property in clause (b)which is incorrect. It can be seen that S.56(2)(vii)(b) pertains to immovable property which on transfer inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Vs. DCIT [2021] 125 taxmann.com 273 (Jaipur Trib), wherein the coordinate Bench held that agricultural land purchased by the assessee would not be governed by the provision of section 56(2)(vii)(b). The ld.AR for the assessee submits that similar view was taken by Pune Tribunal in Mubarak Gafur Korabu Vs ITO [2020] 117 taxmann.com 828 (Pune Trib). Further, the Jaipur Tribunal in CIT vs. Ashok Agarwal (HUF) ANR [2020] 59 CCH 0258 (Jaipur), while considering the scope of clause-(vii) of section 56(2) held that clause- (vii)would not be applicable on transaction of plot of land being a part of stock in trade. The ld AR for the assessee prayed for allowing the appeal in favour of the assessee. 8. On our directions, the ld.AR of the assessee submits that he undertakes to furnish / file the copy of conveyance deed / sale deed executed in favour of assessee. 9. On the other hand, the ld. Sr -DR for the Revenue supported the order of ld.AO. The ld. Sr-DR for the Revenue submits that ld.CIT(A) while considering the similar submission of assessee has elaborately discussed the contention of assessee and held that land is not exempted from the applicability of section 56(2)(vii)(b) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at Co-ordinate Bench of Jaipur and Pune Tribunal while considering the similar grounds of appeal has taken a view that agricultural land purchased by assessee is not covered by the provisions of section 56(2)(b)(vii)(b). The relevant part of decision of Pune Bench in Mubarak Gafur Korabu vs. ITO (supra) is extracted below: 8. We have heard the rival contentions and perused the record. Section 56(2)(vii) of the Act talks about where an individual or HUF received in any previous year from any person or persons on or after first day of October, 2009 but before first day of April, 2017, under clause (a) any sum of money without consideration exceeding ₹ 50,000/-, then the whole of such sum is chargeable to tax under 'Income from other sources'. Under clause (b), any immovable property i.e. (i) without consideration, the stamp duty value of which exceeds ₹ 50,000/-, then stamp duty value of such property is to be added; and (ii) for consideration which is less than stamp duty value of the property by an amount exceeding ₹ 50,000/-, then stamp duty value of such property as exceeds such consideration is to be added in the hands of person as 'Income fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... property as per clause (d) under Explanation i.e. property means the following capital assets of the assessee:- (i) immovable property being land or building or both; (ii) shares and securities; (iii) jewellery; (iv) archaeological collections; (v) drawings; (vi) paintings; (vii) sculptures; (viii) any work of art; [or] (ix) bullion. 10. In the totality of above definitions, we hold that agricultural land purchased by assessee is not governed by the provisions of section 56(2)(vii)(b) of the Act being not capital asset and also because of the fact that the assessee was holding it as stock in trade. Hence, it is outside the purview of said section and no addition has to be made in the hands of assessee. 11. Now, coming to the decision of Jaipur Bench of Tribunal in Trilok Chand Sain (supra), wherein provisions of clause (b) of section 56(2)(vii) of the Act were considered. However, they have failed to take into cognizance the provisions of clause (c) of said section, which talks of property other than immovable property. The Tribunal in para 6 refers only to the definition of 'immovable property' a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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