SHRI PREM CHAND JAIN, BUNDI V. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE, SAWAI MADHOPUR

ITA 98/JPR/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 0868 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 4 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-06-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 29-01-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K C GUPTA
• Assessee Lawyers: C L YADAV
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Retrospective amendment; Fair market value; Capital Gains
• Section: 56(2)(vii)(b); 50C; 2(14); 56(2); 12AA; 13; 56

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BEN CHES B JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRA M SINGH YADAV, AM VK;DJ VIHY LA- @ ITA NO. 98/JP/2019 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR :2014-15 SH. PREM CHAND JAIN PROP. M/S MAHINDRA AND CORPORATION, VILLAGE DEI, TEHSIL NENWA, DIST.- BUNDI CUKE VS. ACIT, CIRCLE- SAWAI MADHOPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: ADRPJ8827C VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI C. L. YADAV (CA) JKTLO DH VKSJ LS @ REVENUE BY : SHRI K. C. GUPTA (JCIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 05/06/2020 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 08/06/2020 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT(A), KOTA DATED 29.11.2018 WHEREIN THE ASSESSEE HAS TAKEN THE FOLLOWING GROUND OF APPEAL:- THE LD CIT (A) HAS ERRED IN LAW AND ON FACTS IN CO NFIRMING THE ADDITION OF RS. 303,596/- ON ACCOUNT OF ADDITION U/ S 56(2)(VII)(B) MADE BY AO IGNORING THE FACT AND LAW THAT THE PROPE RTY ACQUIRED BY THE ASSESSEE WAS NOT A CAPITAL ASSET. 2. THE LD. AR SUBMITTED THAT THE APPELLANT IS A WHO LESALE GRAIN & SEED MERCHANT. DURING THE YEAR, HE HAD PURCHASED TW O PIECE OF ITA NO. 98/JP/2019 SH. PREM CHAND JAIN, BUNDI VS. ACIT, SAWAI MADHOPU R 2 AGRICULTURE LAND ADMEASURING 1/6 TH OF 40.25 BIGHAS I.E. 6.71 BIGHAS(APPX.) AND ALSO 1/6 TH OF 25 BIGHAS I.E.4.17 BIGHA (APPRX) RESPECTIVELY FROM SMT. RAJBALA W/O SH SATVEER SINGH AND SH. SATVEER SINGH S/O SH. SURJA RAM, FOR A CONSIDERATIO N OF RS.3,50,000/- AND RS. 2,00,000/- WHICH WERE VALUED BY THE SUB- REGISTRAR AT RS.5,26,660/- AND RS. 3,26,976/- RESPE CTIVELY. THE ASSESSING OFFICER WORKED OUT THE DEEMED SALES CONSI DERATION AS PER THE AFORESAID DLC VALUE AND ADDED THE DIFFERENCE OF RS.3,03,596/- U/S 56(2)(VII)(B) IN THE HANDS OF THE APPELLANT, UN DER THE HEAD INCOME FROM OTHER SOURCES. 3. ON APPEAL, THE LD. CIT(A) HAS CONFIRMED THE ADDI TION AND AGAINST THE SAID FINDINGS, THE ASSESSEE IS IN APPEA L. DURING THE COURSE OF HEARING, OUR REFERENCE WAS DRAWN TO THE F INDINGS OF THE LD CIT(A) WHICH READ AS UNDER:- AS REGARDS GROUND NO. 2, SINCE THE MATTER PERTAINS TO A.Y 2014- 15 AND THE PROVISIONS OF SECTION 56(2)(VII)(B) HAVE BEEN MADE EFFECTIVE FROM APRIL 2014 PRESENT ASSESSMENT YEAR U NDER APPEAL IS COVERED. THE AO HAS NOT QUESTIONED THE SOURCE OR NA TURE OF THE TRANSACTION BUT THE DIFFERENCE IN THE ACTUAL VALUE PAID TO THE SELLER & THE DLC RATE TAKEN BY THE SVA. THE DIFFERENCE IS SOUGHT TO BE TAXED UNDER OTHER SOURCES INCOME AS PER THE ABOVE REFERRED SECTION. THE APPELLANT HAS CONTENDED THAT SINCE THE PURCHASE D LAND WAS AGRICULTURAL, HIS CASE WAS NOT COVERED UNDER SECTIO N 56(2)(VII)(B). HOWEVER, ON A PERUSAL OF THE SECTION IT IS SEEN THA T THERE IS NO EXPRESS EXCLUSION PROVIDED FOR AGRICULTURAL LAND FR OM THE SECTION. HENCE THIS ARGUMENT OF THE APPELLANT IS NOT FOUND T O BE ITA NO. 98/JP/2019 SH. PREM CHAND JAIN, BUNDI VS. ACIT, SAWAI MADHOPU R 3 ACCEPTABLE AND THE SAME ADDITION MADE BY THE AO AMO UNTING TO RS. 3,03,596/- AS INCOME FROM OTHER SOURCES IS UPHE LD. 4. THE LD AR SUBMITTED THAT DURING THE APPELLATE PR OCEEDINGS, IT WAS SPECIFICALLY CONTENDED BEFORE THE CIT(A) THAT THE A SSESSEE HAD PURCHASED TWO PIECES OF AGRICULTURE LAND DURING THE YEAR AND THE AGRICULTURE LAND NOT BEING A CAPITAL ASSET, THE PRO VISIONS OF SECTION 56(2)(VII)(B) ARE NOT APPLICABLE. HOWEVER, THE LD C IT(A) HAS SUMMARILY REJECTED THE CONTENTION SO ADVANCED BY THE LD AR AN D HAS ERRED IN INTERPRETING THE PROVISIONS OF SECTION 56(2)(VII)(B ) IN RIGHT PERSPECTIVE. 5. REFERRING TO THE PROVISIONS OF 56(2)(VII)(B) AND THE AMENDMENT BROUGHT IN BY THE FINANCE ACT, 2010, IT WAS SUBMITT ED AS UNDER: THE FINANCE ACT, 2010 MADE THE FOLLOWING AMENDMENT S TO SECTION 56: IN SECTION 56 OF THE INCOME-TAX ACT, IN SUB-SECTION (2), (A) IN CLAUSE (VII), (I) FOR SUB-CLAUSE (B), THE FOLLOWING SUB-CLAUSE SH ALL BE SUBSTITUTED AND SHALL BE DEEMED TO HAVE BEEN SUBSTI TUTED WITH EFFECT FROM THE 1ST DAY OF OCTOBER, 2009, NAMELY: '(B) ANY IMMOVABLE PROPERTY, WITHOUT CONSIDERATION, THE STAMP DUTY VALUE OF WHICH EXCEEDS FIFTY THOUSAND RUPEES, THE S TAMP DUTY VALUE OF SUCH PROPERTY. (II) IN THE EXPLANATION, IN CLAUSE (D), ITA NO. 98/JP/2019 SH. PREM CHAND JAIN, BUNDI VS. ACIT, SAWAI MADHOPU R 4 (A) IN THE OPENING PORTION, FOR THE WORD 'MEANS', THE WORDS 'MEANS THE FOLLOWING CAPITAL ASSET OF THE ASSESSEE, NAMELY :' SHALL BE SUBSTITUTED AND SHALL BE DEEMED TO HAVE BEEN SUBSTI TUTED WITH RETROSPECTIVE EFFECT FROM THE 1ST DAY OF OCTOBER, 2 009; (B ) IN SUB-CLAUSE (VII), THE WORD 'OR' SHALL BE OM ITTED WITH EFFECT FROM THE 1ST DAY OF JUNE, 2010; (C) IN SUB-CLAUSE (VIII), THE WORD 'OR' SHALL BE INSERT ED AT THE END WITH EFFECT FROM THE 1ST DAY OF JUNE, 2010; (D) AFTER SUB-CLAUSE (VIII), THE FOLLOWING SUB-CLAUSE S HALL BE INSERTED WITH EFFECT FROM THE 1ST DAY OF JUNE, 2010, NAMELY: '(IX) BULLION;'; 6. IT WAS SUBMITTED THAT THE SUBSTITUTION OF THE WO RDS MEANS FOR THE WORDS MEANS THE FOLLOWING CAPITAL ASSET O F THE ASSESSEE, NAMELY MADE THE INTENTION OF THE LEGISLATORS VERY CLEAR THAT HENCEFORTH THE DEEMING PROVISION OF 56(2)(VII)(B) W OULD APPLY IN CASE OF THESE NINE ASSETS, IF AND ONLY IF, THEY ARE CAPITAL ASSETS. IT IS NOT WITHOUT A PURPOSE OR INTENT THAT THE WORD MEANS HAS BEEN SUBSTITUTED WITH MEANS THE FOLLOWING CAPITAL ASSET OF THE ASSESSEE. 7. IT WAS SUBMITTED THAT IT IS A FUNDAMENTAL RULE O F STATUTORY INTERPRETATION THAT A SECTION HAS TO BE READ AS A W HOLE, AND NOT IN ISOLATION, AND DUE WEIGHTAGE HAS TO BE GIVEN TO THE PROVISOS AND EXPLANATIONS. AN EXPLANATION IS AT TIMES APPENDED T O A SECTION TO EXPLAIN THE MEANING OF WORDS CONTAINED IN THE SECTI ON. [S. SUNDARAM PILLAI VS. PATTABHIRAMAN, AIR 1985 SC 582] IT BECOM ES A PART AND PARCEL OF THE ENACTMENT. [BENGAL IMMUNITY CO. LTD. VS. STATE OF BIHAR, ITA NO. 98/JP/2019 SH. PREM CHAND JAIN, BUNDI VS. ACIT, SAWAI MADHOPU R 5 AIR 1955 SC 661 P.733]. THE MEANING TO BE GIVEN TO AN EXPLANATION MUST DEPEND ON ITS TERMS, AND NO THEORY OF ITS PURP OSE CAN BE ENTERTAINED UNLESS IT IS TO BE INFERRED FROM THE LA NGUAGE USED [DATTARAYA GOVIND MAHAJAN VS. STATE OF MAHARASHTRA AIR 1977 SC 915 P.928] BUT IF THE LANGUAGE OF THE EXPLANATION S HOWS A PURPOSE AND A CONSTRUCTION CONSISTENT WITH THAT PURPOSE CAN BE REASONABLY PLACED UPON IT, THAT CONSTRUCTION WILL BE PREFERRED AS AGAINST ANY OTHER CONSTRUCTION WHICH DOES NOT FIT IN WITH THE D ESCRIPTION OR THE AVOWED PURPOSE. AN EXPLANATION MAY BE ADDED TO INCL UDE SOMETHING WITHIN OR TO EXCLUDE SOMETHING FROM THE A MBIT OF THE MAIN ENACTMENT OR THE CONNOTATION OF SOME WORD OCCU RRING IN IT. EVEN A NEGATIVE EXPLANATION WHICH EXCLUDES CERTAIN TYPES OF CATEGORY FROM THE AMBIT OF THE ENACTMENT MAY HAVE T HE EFFECT OF SHOWING THAT THE CATEGORY LEAVING ASIDE THE EXCEPTE D TYPES IS INCLUDED WITHIN IT [ITO(FIRST), SALEM VS. SHORT BRO THERS PVT. LTD. AIR 1967 SC 81 P.83] AN EXPLANATION, NORMALLY, SHOU LD BE SO READ AS TO HARMONISE WITH AND CLEAR UP ANY AMBIGUITY IN THE MAIN SECTION. 8. IT WAS SUBMITTED THAT IN SECTION 56(2), EXPLANAT ION HAS BEEN PROVIDED TO CLAUSE (VII) TO EXPLAIN THE MEANING AND INTENDMENT OF THE ACT ITSELF. AS THE WORD PROPERTY HAS BEEN USED IN SUB-CLAUSE (B) AND (C) OF CLAUSE (VII), AND THE EXPLANATION IS FOR THE PURPOSE OF THIS CLAUSE, I.E. FOR CLAUSE (VII), THE EXPLANATION REMOVES ALL DOUBTS, OBSCURITY OR VAGUENESS OF THE MAIN ENACTMENT AND CL ARIFIES THE PROPERTY TO BE COVERED IN ITS AMBIT, SO AS TO MAKE IT CONSISTENT WITH THE DOMINANT OBJECTIVE, WHICH IT SEEMS TO SUB SERVE . IT PROVIDES AN ITA NO. 98/JP/2019 SH. PREM CHAND JAIN, BUNDI VS. ACIT, SAWAI MADHOPU R 6 ADDITIONAL SUPPORT TO THE DOMINANT OBJECT OF THE AC T IN ORDER TO MAKE IT MEANINGFUL AND PURPOSEFUL. 9. IT WAS FURTHER SUBMITTED THAT SECTION 56(2) HAS BEEN AMENDED MANY A TIMES TO TAX AND EXCLUDE CERTAIN TRANSACTION S. THE PROVISIONS OF SECTION 56(2)(VII) WERE INTRODUCED AS A COUNTER EVASION MECHANISM TO PREVENT LAUNDERING OF UNACCOUNTED INCO ME. THE PROVISIONS WERE INTENDED TO EXTEND THE TAX NET TO S UCH TRANSACTIONS IN KIND. THE INTENT IS NOT TO TAX THE TRANSACTIONS ENTERED INTO THE NORMAL COURSE OF BUSINESS OR TRADE, THE PROFITS OF WHICH ARE TAXABLE UNDER SPECIFIC HEADS OF INCOME. THEREFORE, THE DEFI NITION OF PROPERTY HAS BEEN AMENDED TO PROVIDE THAT SECTION 56(2)(VII) (B) WILL HAVE APPLICATION TO THE PROPERTY WHICH IS IN THE NATURE OF CAPITAL ASSET OF THE RECIPIENT. THIS POSITION HAS BEEN MADE CLEAR BY CHATURVEDI & PITHISARIA'S INCOME TAX LAW, VOLUME 4 (SIXTH EDITIO N) PAGE 4796. 10. IT WAS SUBMITTED THAT THE QUESTION WHICH NEEDS TO BE DETERMINED IS WHETHER 'IMMOVABLE PROPERTY' FOR THE PURPOSES OF SECTION 56(2)(VII) COVERS ONLY 'CAPITAL ASSETS' AS DEFINED IN SECTION 2(14) OR COVERS ALL TYPES OF 'IMMOVABLE PROPERTY'. IN SIMPLER WORDS, AN IMMOVABLE PROPERTY WHICH WAS NOT A CAPITAL ASSET FOR THE PURPOSES OF TAXABILITY OF CAPITAL GAIN, IS ALSO SUB JECTED TO TAXATION UNDER SECTION 56(2) OR FOR THE PURPOSES OF TAXATION UNDER SECTION 56(2), THE IMMOVABLE PROPERTY SHOULD SATISFY THE DE FINITION OF CAPITAL ASSET? 11. IT WAS SUBMITTED THAT THE TERM 'IMMOVABLE PROP ERTY' IS NOT DEFINED FOR THE PURPOSE OF SECTION 56(2). HOWEVER, THE TERM 'PROPERTY' IS DEFINED FOR THE PURPOSE OF THIS CLAUS E. THE TERM 'PROPERTY' 'MEANS THE FOLLOWING CAPITAL ASSET OF TH E ASSESSEE, NAMELY ITA NO. 98/JP/2019 SH. PREM CHAND JAIN, BUNDI VS. ACIT, SAWAI MADHOPU R 7 IMMOVABLE PROPERTY BEING LAND OR BUILDING OR BOTH, SHARES AND SECURITIES, JEWELLERY, ARCHAEOLOGICAL COLLECTIONS, DRAWINGS, PAINTINGS, SCULPTURES, ANY WORK OF AN ART OR BULLION. FROM THE ABOVE DEFINITION, IT IS EVIDENT THAT 'PROPERTY' COVERS ONLY THE IMMOVABL E PROPERTIES WHICH ARE IN THE NATURE OF 'CAPITAL ASSET'. HOWEVER, SECT ION 56(2) (VII) HAS USED THE WORD ANY IMMOVABLE PROPERTY WHILE FIXING T HE TAXATION. NOW, THE CHALLENGE IS WHETHER WE SHOULD INTERPRET T HE PHRASE 'ANY' IN LIGHT OF 'CAPITAL ASSET' OR 'ANY' IN ITS NORMAL MEANING. IF WE ADOPT THE FORMER, ONLY SUCH IMMOVABLE PROPERTIES WHICH AR E IN NATURE OF CAPITAL ASSETS ARE COVERED UNDER THE AMBIT OF SECTI ON 56(2). IF WE ADOPT THE LATTER, ANY KIND OF IMMOVABLE PROPERTY IS COVERED AND THERE IS NO NECESSITY TO GO AND EXAMINE WHETHER SUC H IMMOVABLE PROPERTY WOULD FIT UNDER THE DEFINITION OF CAPITAL ASSET. 12. IT WAS SUBMITTED THAT AS PER THE RULES OF INTE RPRETATION WHERE THE LANGUAGE OF THE ACT IS CLEAR, THE FORMER IS MORE ACCURATE KEEPING THE INTENT OF THE LEGISLATURE IN T HE BACKGROUND. THAT IS TO SAY, THE IMMOVABLE PROPERTY WHICH IS TRY ING TO BE TAXED UNDER SECTION 56(2) NEEDS TO BE A CAPITAL ASS ET, IN VIEW OF THE FACT THAT THE PHRASE 'PROPERTY' USES THE PHRASE 'CAPITAL ASSET'. IT MAY ALSO BE NOTED THAT THE PHRASE 'CAPIT AL ASSET' AS DEFINED VIDE SECTION 2(14) IS NOT ONLY FOR THE PURPOSES OF CAPITAL GAINS BUT FOR THE ENTIRE PURPOSES OF THE ACT AND HENCE THE IMMOVA BLE PROPERTY WHICH IS NOT IN NATURE OF CAPITAL ASSET IS NOT TAXABLE UN DER SECTION 56(2). 13. IT WAS ACCORDINGLY SUBMITTED THAT FROM THE ABO VE ANALYSIS OF SECTION 56(2)(VII)(B), IT IS CLEAR THAT THE TAXA BILITY UNDER THIS SECTION WOULD ARISE ONLY WHEN THE PROPERTY PURCHASE D IS A CAPITAL ASSET AND NOT OTHERWISE. IN THIS CASE, THE IMPUGNED ITA NO. 98/JP/2019 SH. PREM CHAND JAIN, BUNDI VS. ACIT, SAWAI MADHOPU R 8 PROPERTY IS NOT A CAPITAL ASSET AS DEFINED IN SECTI ON 2(14), HENCE IS NOT SUBJECT TO BE TAXED AS INCOME FROM OTHER SOU RCES U/S 56(2)(VII)(B) OF THE INCOME TAX ACT, 1961. 14. WITHOUT PREJUDICE, IT WAS FURTHER SUBMITTED THA T DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE HAS OBJECTE D TO THE DLC VALUE ADOPTED BY THE ASSESSING OFFICER AND THEREFORE BEFO RE APPLYING THE DLC VALUE, THE MATTER SHOULD HAVE BEEN REFERRED TO THE DVO FOR DETERMINATION OF FAIR MARKET VALUE AND GIVEN THAT T HE MATTER WAS NOT REFERRED TO THE DVO, NECESSARY RELIEF MAY BE PROVID ED TO THE ASSESSEE. 15. PER CONTRA, THE LD. DR SUBMITTED THAT THE PROVI SIONS OF SECTION 56(2)(VII)(B) ARE CLEARLY ATTRACTED IN THE INSTANT CASE. NO PROOF HAS BEEN SUBMITTED BEFORE THE AO THAT AGRICULTURE L AND SO PURCHASED IS NOT A CAPITAL ASSET. FURTHER, HE SUBMI TTED THAT THE ASSESSEE HAS NOT MADE ANY SPECIFIC REQUEST FOR REFE RENCE OF THE MATTER TO THE DVO. THEREFORE, IN ABSENCE THEREOF, THE ASSE SSING OFFICER WAS NOT REQUIRED TO REFER THE MATTER TO THE DVO. HE ACC ORDINGLY SUPPORTED THE FINDINGS OF THE LOWER AUTHORITIES. 16. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE RELEVANT PROVISIONS OF SEC TION 56(2)(VII)(B) WHICH ARE UNDER CONSIDERATION READ AS UNDER: '(VII ) WHERE AN INDIVIDUAL OR A HINDU UNDIVIDED FAMILY REC EIVES, IN ANY PREVIOUS YEAR, FROM ANY PERSON OR PERSONS ON OR AFTER THE 1ST DAY OF OCTOBER, 2009 BUT BEFORE THE 1ST DAY OF APRIL, 2017, ( A ) ANY SUM OF MONEY, WITHOUT CONSIDERATION, THE AGGREG ATE VALUE OF WHICH EXCEEDS FIFTY THOUSAND RUPEES, THE WHOLE OF THE AGG REGATE VALUE OF SUCH SUM; (B ) ANY IMMOVABLE PROPERTY, (I ) WITHOUT CONSIDERATION, THE STAMP DUTY VALUE OF WHIC H EXCEEDS FIFTY ITA NO. 98/JP/2019 SH. PREM CHAND JAIN, BUNDI VS. ACIT, SAWAI MADHOPU R 9 THOUSAND RUPEES, THE STAMP DUTY VALUE OF SUCH PROPE RTY; (II ) FOR A CONSIDERATION WHICH IS LESS THAN THE STAMP DU TY VALUE OF THE PROPERTY BY AN AMOUNT EXCEEDING FIFTY THOUSAND RUPE ES, TH E STAMP DUTY VALUE OF SUCH PROPERTY AS EXCEEDS SUCH CONSIDE RATION: PROVIDED THAT WHERE THE DATE OF THE AGREEMENT FIXING THE AMO UNT OF CONSIDERATION FOR THE TRANSFER OF IMMOVABLE PROPERT Y AND THE DATE OF REGISTRATION ARE NOT THE SAME, THE STAMP DUTY VA LUE ON THE DATE OF THE AGREEMENT MAY BE TAKEN FOR THE PURPOSES OF THIS SUB -CLAUSE: PROVIDED FURTHER THAT THE SAID PROVISO SHALL APPLY ONLY IN A CASE WH ERE THE AMOUNT OF CONSIDERATION REFERRED TO THEREIN, OR A P ART THEREOF, HAS BEEN PAID BY ANY MODE OTH ER THAN CASH ON OR BEFORE THE DATE OF THE AGREEMENT FOR THE TRANSFER OF SUCH IMMOVABLE PROPERTY; (C ) ANY PROPERTY, OTHER THAN IMMOVABLE PROPERTY, (I ) WITHOUT CONSIDERATION, THE AGGREGATE FAIR MARKET VA LUE OF WHICH EXCEEDS FIFTY THOUSAND RUPEES, T HE WHOLE OF THE AGGREGATE FAIR MARKET VALUE OF SUCH PROPERTY; (II ) FOR A CONSIDERATION WHICH IS LESS THAN THE AGGREGAT E FAIR MARKET VALUE OF THE PROPERTY BY AN AMOUNT EXCEEDING FIFTY THOUSAND RUPEES, THE AGGREGATE FAIR MARKET VALUE OF SUCH PRO PERTY AS EXCEEDS SUCH CONSIDERATION : PROVIDED THAT WHERE THE STAMP DUTY VALUE OF IMMOVABLE PROPER TY AS REFERRED TO IN SUB-CLAUSE (B) IS DISPUTED BY THE ASSESSEE ON GROUN DS MENTIONED IN SUB- SECTION (2) OF SECTION 50C , THE ASSESSING OFFICER MAY REFER THE VALUATION OF SUCH PROPERTY TO A VALUATION OFFICER, AND THE PROVISIONS OF SECTION 50C AND SUB-SECTION (15) OF SECTION 155 SHALL, AS FAR AS MAY BE, APPLY IN RELATION TO THE S TAMP DUTY VALUE OF SUCH PROPERTY FOR THE PURPOSE OF SUB-CLAUSE (B ) AS THEY APPLY FOR VALUATION OF CAPITAL ASSET UNDE R THOSE SECTIONS : PROVIDED FURTHER THAT THIS CLAUSE SHALL NOT APPLY TO ANY SUM OF MONE Y OR ANY PROPERTY RECEIVED (A ) FROM ANY RELATIVE; OR (B ) ON THE OCCASION OF THE MARRIAGE OF THE INDIVIDUAL; OR ( C ) UNDER A WILL OR BY WAY OF INHERITANCE; OR ITA NO. 98/JP/2019 SH. PREM CHAND JAIN, BUNDI VS. ACIT, SAWAI MADHOPU R 10 (D ) IN CONTEMPLATION OF DEATH OF THE PAYER OR DONOR, AS THE CASE MAY BE; OR (E ) FROM ANY LOCAL AUTHORITY AS DEFINED IN THE EXPLANATION TO CLAUSE ( 20 ) OF SECTION 10 ; OR (F ) FROM ANY FUND OR FOUNDATION OR UNIVERSITY OR OTHER EDUCATIONAL INSTITUTION OR HOSPITAL OR OTHER MEDICAL INSTITUTION OR ANY TRUST OR INSTITUTION REFERRED TO IN CLAUSE (23C) OF SECTION 10 ; OR (G ) FROM ANY TRUST OR INSTITUTION REGISTERED UNDER SECTION 12AA ; OR ( H ) BY WAY OF TRANSACTION NOT REGARDED AS TRANSFER UNDE R CLAUSE ( VICB ) OR CLAUSE (VID) OR CLAUSE (VII) OF SECTION 47 . EXPLANATI ON. FOR THE PURPOSES OF THIS CLAUSE, (A ) 'ASSESSABLE' SHALL HAVE THE MEANING ASSIGNED TO IT IN THE EXPLANATION 2 TO SUB-SECTION (2) OF SECTION 50C ; (B ) 'FAIR MARKET VALUE' OF A PROPERTY, OTHER THAN AN IM MOVABLE PROPERTY, MEANS THE VALUE DETERMINED IN ACCORDANCE WITH THE METHOD AS MAY BE PRESCRIBED; ( C ) 'JEWELLERY' SHALL HAVE THE MEANING ASSIGNED TO IT I N THE EXPLANATION TO SUB - CLAUSE (II) OF CLAUSE (14) OF SECTION 2 ; ( D ) 'PROPERTY' MEANS THE FOLLOWING CAPITAL ASSET OF THE ASSESSEE, NAMELY: (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; ITA NO. 98/JP/2019 SH. PREM CHAND JAIN, BUNDI VS. ACIT, SAWAI MADHOPU R 11 (E ) 'RELATIVE' MEANS, ( I ) IN CASE OF AN INDIVIDUA L (A ) SPOUSE OF THE INDIVIDUAL; ( B ) BROTHER OR SISTER OF THE INDIVIDUAL; (C ) BROTHER OR SISTER OF THE SPOUSE OF THE INDIVIDUAL; (D ) BROTHER OR SISTER OF EITHER OF THE PARENTS OF THE I NDIVIDUAL; ( E ) ANY LINEAL ASCENDANT OR DESCENDANT O F THE INDIVIDUAL; (F ) ANY LINEAL ASCENDANT OR DESCENDANT OF THE SPOUSE OF THE INDIVIDUAL; ( G ) SPOUSE OF THE PERSON REFERRED TO IN ITEMS ( B ) TO ( F ); AND (II ) IN CASE OF A HINDU UNDIVIDED FAMILY, ANY MEMBER THE REOF;] (F ) 'STAMP DUTY VALUE' MEANS THE VALUE ADOPTED OR ASSESSED OR ASSESSABLE B Y ANY AUTHORITY OF THE CENTRAL GOVERNMENT OR A STATE GOVERNMENT FOR THE PURPOSE OF PAYMENT OF STAMP DUTY IN RESPECT OF AN I MMOVABLE PROPERTY; 17. THE ABOVE PROVISIONS THUS PROVIDE THAT WHERE AN INDIVIDUAL RECEIVES IN ANY PREVIOUS YEAR, FROM ANY PERSON OR P ERSONS ON OR AFTER THE 1ST DAY OF OCTOBER, 2009 BUT BEFORE THE 1ST DAY OF APRIL, 2017, ANY IMMOVEABLE PROPERTY FOR A CONSIDERATION WHICH IS LE SS THAN THE STAMP DUTY VALUE OF THE PROPERTY BY AN AMOUNT EXCEEDING F IFTY THOUSAND RUPEES, THE STAMP DUTY VALUE OF SUCH PROPERTY AS EX CEEDS SUCH CONSIDERATION SHALL BE INCOME CHARGEABLE TO TAX UND ER THE HEAD INCOME FROM OTHER SOURCES. 18. IN THE INSTANT CASE, THE ASSESSEE HAS PURCHASE D TWO PLOTS OF LAND DURING THE YEAR UNDER CONSIDERATION. THE SALE CONS IDERATION AS PER THE RESPECTIVE SALE DEEDS AMOUNTS TO RS 5,50,000/- AND THE STAMP DUTY ITA NO. 98/JP/2019 SH. PREM CHAND JAIN, BUNDI VS. ACIT, SAWAI MADHOPU R 12 VALUE OF SUCH PROPERTIES AS DETERMINED BY THE STAMP DUTY AUTHORITY AMOUNTS TO RS 8,53,636/- AND THEREFORE, THERE IS DI FFERENCE TO THE TUNE OF RS 3,03,636/- BETWEEN THE SALE CONSIDERATION AS PER THE SALE DEEDS AND THE STAMP VALUATION DETERMINED BY THE STAMP VAL UATION AUTHORITY. TO THIS EXTENT, THE FACTS ARE NOT DISPUTED AND HAVE BEEN ACCEPTED BY BOTH THE PARTIES. THE LIMITED POINT OF DISPUTE IS T HE NATURE OF IMMOVEABLE PROPERTY WHICH HAS BEEN PURCHASED BY THE ASSESSEE. THE ASSESSEES CONTENTION IS THAT WHICH HE HAS PURCHASE D ARE TWO PLOTS OF AGRICULTURAL LAND AND THE SAME DOESNT FALL IN THE DEFINITION OF CAPITAL ASSET AS PER THE PROVISIONS OF SECTION 2(14) OF THE ACT AND PROVISIONS OF SECTION 56(2)(VII)(B) CANNOT BE INVOKED. THE REVENU ES CONTENTION IS THAT THE PROVISIONS OF SECTION 56(2)(VII)(B) TALKS ABOUT ANY IMMOVEABLE PROPERTY AND THUS EVEN AN AGRICULTURE LAND FALLS UN DER THE DEFINITION OF AN IMMOVEABLE PROPERTY AND THE PROVISIONS OF SECTIO N 56(2)(VII)(B) ARE CLEARLY ATTRACTED. 19. ON READING OF PROVISIONS OF 56(2)(VII)(B), WE F IND THAT IT REFERS TO ANY IMMOVEABLE PROPERTY. FURTHER, PROVISIONS OF SEC TION 56(2)(VII)(C) REFERS TO ANY PROPERTY, OTHER THAN AN IMMOVABLE PRO PERTY. THE MEANING OF THE TERM PROPERTY HAS BEEN PROVIDED IN EXPLANA TION (D) TO SECTION 56(2)(VII) WHERE THE TERM PROPERTY HAS BEEN DEFIN ED TO MEAN CAPITAL ASSET OF THE ASSESSEE NAMELY IMMOVEABLE PROPERTY BE ING LAND OR BUILDING OR BOTH. IT HAS BEEN CONTENDED BY THE LD AR THAT ALL IMMOVABLE PROPERTIES OF ANY NATURE ARE NOT COVERED IN THE DEFINITION OF PROPERTY. 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 ITA NO. 98/JP/2019 SH. PREM CHAND JAIN, BUNDI VS. ACIT, SAWAI MADHOPU R 13 SPECIFIED AND WHERE AN IMMOVEABLE PROPERTY AS SO SP ECIFIED BEING LAND, BUILDING OR BOTH IS NOT HELD AS AN CAPITAL ASSET, I T 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 DOESNT QUA LIFY AS FALLING IN THE DEFINITION OF CAPITAL ASSET, PROVISIONS OF SECTION 56(2)(VII)(B) CANNOT BE INVOKED. 20. IN THE INSTANT CASE, WHETHER AGRICULTURE LAND S O 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 IND IA 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 E XAMINING WHETHER THE TWO PLOTS OF AGRICULTURAL LAND SO ACQUIRED FALLS IN THE DEFINITION OF CAPITAL ASSET OR NOT. WHERE IT IS SO DETERMINED BY THE ASS ESSING OFFICER THAT THE AGRICULTURAL LAND SO ACQUIRED DOESNT FALLS IN THE DEFINITION OF CAPITAL ASSET, DIFFERENCE IN THE DLC VALUE AND SALES CONSID ERATION CANNOT BE BROUGHT TO TAX UNDER THE PROVISIONS OF SECTION 56(2 )(VII)(B) OF THE ACT AND RELIEF SHOULD BE GRANTED TO THE ASSESSEE. 21. IN A SCENARIO, WHERE IT IS SO DETERMINED BY THE ASSESSING OFFICER THAT THE AGRICULTURAL LAND SO ACQUIRED FALLS IN THE DEFINITION OF CAPITAL ASSET, THE PROVISIONS OF SECTION 56(2)(VII)(B) OF T HE ACT WOULD BE APPLICABLE. IN THIS REGARD, THE CONTENTION OF THE LD AR IS THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE HAS OBJECTED TO THE DLC VALUE ADOPTED BY THE ASSESSING OFFICER AND THER EFORE BEFORE APPLYING THE DLC VALUE, THE MATTER SHOULD HAVE BEEN REFERRED TO THE DVO FOR DETERMINATION OF FAIR MARKET VALUE. ITA NO. 98/JP/2019 SH. PREM CHAND JAIN, BUNDI VS. ACIT, SAWAI MADHOPU R 14 22. WE NOTE THAT DURING THE COURSE OF ASSESSMENT P ROCEEDINGS, THE ASSESSEE WAS ISSUED A SHOW CAUSE AS TO WHY THE DIF FERENCE OF RS.3,03,596/- MAY NOT BE ADDED U/S 56(2)(VII) OF TH E ACT. IN REPLY THEREOF, THE ASSESSEE HAS SUBMITTED THAT THE ASSESS EE PURCHASED THE LAND ON 22.04.2013 FOR A CONSIDERATION OF RS 5,50,0 00/- ONLY AND PROVISIONS OF SECTION 56(2)(VII) ARE APPLICABLE FRO M 01.04.2014, SO NO ADDITION SHOULD NOT BE MADE IN THIS CASE. THE AO CO NSIDERED THE SUBMISSIONS OF THE ASSESSEE BUT HELD THAT PROVISION S OF SECTION 56(2)(VII) ARE APPLICABLE FROM THE A.Y 2014-15 AND THE CASE OF THE ASSESSEE IS SQUARELY COVERED BY THE PROVISIONS OF SECTION 56(2) (VII) OF THE I.T. ACT, 1961 AS AMENDED BY THE FINANCE ACT, 2013. HOWEVER, WE FIND THAT THE AO HAS NOT APPRECIATED THE OBJECTION OF THE ASSESSE E REGARDING ADOPTION OF DLC VALUE AS AGAINST THE SALE CONSIDERA TION. THEREFORE, WHERE THE ASSESSEE HAS OBJECTED TO THE STAMP DUTY V ALUATION, AS PER THE PROVISIONS OF SECTION 50C(2) OF THE ACT WHICH ARE E QUALLY 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 T HE INSTANT CASE, WHERE IT IS SO DETERMINED BY THE ASSESSING OFFICER THAT T HE 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 O F THE TWO PLOTS OF AGRICULTURAL LAND AND THEREAFTER, DECIDE THE MATTER AFRESH. 23. THE MATTER IS ACCORDINGLY SET-ASIDE TO THE FILE OF THE AO WHO SHALL DECIDE THE SAME AS PER THE AFORESAID DIRECTIONS AFT ER PROVIDING REASONABLE OPPORTUNITY TO THE ASSESSEE. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FO R STATISTICAL PURPOSES. ITA NO. 98/JP/2019 SH. PREM CHAND JAIN, BUNDI VS. ACIT, SAWAI MADHOPU R 15 ORDER PRONOUNCED IN THE OPEN COURT ON 08/06/2020. SD/- SD/- FOT; IKY JKO FOE FLAG ;KNO (VIJAY PAL RAO) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 08/06/2020 * GANESH KR. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SH. PREM CHAND JAIN, BUNDI 2. IZR;FKHZ@ THE RESPONDENT- ACIT, CIRCLE- SAWAI MADHOPUR 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE {ITA NO. 98/JP/2019} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR