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TMI Blog2021 (5) TMI 60X X X X Extracts X X X X X X X X Extracts X X X X ..... asset of the assessee. The term capital asset has been defined under section 2(14) of the Act. The capital asset does not include agriculture land, however, there are certain exceptions to it. In the present case, we find that the assessee has not brought any evidence to show that the agricultural land purchased with other co purchasers does not fall within the exceptions as specified in definition of agricultural land under section 2(14) of the Act. Even the AO has not made any effort to examine whether the agricultural land in question falls within the exception as specified under section 2(14) We find that in the case of Prem Chand Vs. ACIT [ 2020 (7) TMI 188 - ITAT JAIPUR ] held that per se the agriculture land does not fall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the AY 2014-15. 2. Shri Reepal G. Tralshawala appearing on behalf of the assessee, narrating the facts of case submitted that the assessee along with five other persons had purchased agricultural land bearing S.No. 29, H-No.01 at Kasal, District Sindhudurg for a consideration of ₹ 33,10,000/-. The AO in scrutiny assessment proceedings invoked the provision of section 56(2)(vii)(b) of the Income-tax Act, 1961 (hereinafter referred to as the Act ) and adopted the fair market value of the property as determined by the stamp duty authority i.e. ₹ 1,73,91,000/- and made addition of ₹ 21,96,778/- i.e. to the extent of assessee s share in the land. The AR submitted that the provision of section 56(2)(vii)(b) of the Act are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bar that he is not willing to go back to CIT(A) and the matter may be decided in appeal before Tribunal. In view of the statement made by the AR of the assessee at Bar, the ground No. 1 of the appeal is dismissed. 5. In so far as factual matrix of the case is concerned both sides agree that it is a case of purchase of agriculture land. We find that even the AO while passing the assessment order has not disputed the fact that the land in question is agriculture land. Now, the issue before us is in narrow compass i.e. whether the agriculture land falls within the meaning of property as defined in Explanation to section 56(2)(vii) of the Act. Before proceeding further, it is imperative to refer to the definition to the property as defin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not being more than two kilometres, from the local limits of any municipality or cantonment board referred to in item (a) and which has a population of more than ten thousand but not exceeding one lakh; or (II) not being more than six kilometres, from the local limits of any municipality or cantonment board referred to in item (a) and which has a population of more than one lakh but not exceeding ten lakh; or (III) not being more than eight kilometres, from the local limits of any municipality or cantonment board referred to in item (a) and which has a population of more than ten lakh. Explanation.-For the purposes of this sub-clause, population means the population according to the last preceding census of which the releva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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 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. 20. In the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the fact, that the agriculture land falls under exception or not, and in case the agriculture land purchased by the assessee falls within the definition of the capital asset and consequently, the provisions of Section 56(2)(vii) of the Act are attracted, then the AO may be directed to refer the valuation of land to the DVO. We have considered the contentions of the assessee, liberty is granted to the assessee to make a requisite application before the AO to refer valuation of land in question to DVO in case the agricultural land falls within the ambit of definition of property under section 56(2)(vii) of the Act. 10. In the result, the appeal of the assessee is party allowed for statistical purposes in terms of the above. Order ..... X X X X Extracts X X X X X X X X Extracts X X X X
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