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TMI Blog2024 (9) TMI 267X X X X Extracts X X X X X X X X Extracts X X X X ..... d to the income of the purchaser, and finding the fact in the present case to be so, the addition under the said section had been made to the income of the assessee. Our attention was drawn to the grounds raised accordingly, which read as under: "1.1 The order passed by U/s.250 passed on 15.03.2022 by NFAC, Delhi upholding the invocation of the provisions of sec.56(2)(x) and consequential addition of Rs.62,52,900/- towards purchase of immovable property is wholly illegal, unlawful and against the principles of natural justice. 2.1 The Id. NFAC has grievously erred in law and or on facts in upholding the invocation of the provisions of sec.56(2)(x) and consequential addition of Rs.62,52,900/- towards purchase of immovable property. 2.2 That the in the facts and circumstances of the ld. NFAC ought not to have upheld the invocation of the provisions of sec.56(2)(x) and consequential addition of Rs.62,52,900/-towards purchase of immovable property. 3.1 That in the facts and circumstances of the case as well as the law, both the lower authorities ought to have referred the matter to DVO for determination of fair market value as on 29/05/2017 and examine the applicability of sec. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red as the stamp duty value for the purpose of section 56(2)(x) of the Act. 6. To buttress his contention that the land which he purchased was an agricultural land, he drew our attention to the copy of the sale deed (translated version of which was placed before us) pointing out that - (i) the property sold was consistently described as agricultural land, and nowhere mentioned the property as non-agricultural land, and (ii) he drew our attention to the approval granted by the Collector on 15.2.2017 for conversion of the land into non-agriculture land and pointed out that certain conditions were mentioned therein, which were to be fulfilled by the user of the land, subject to which the land would be treated as non-agriculture land. He drew our attention to the judgement of Hon'ble jurisdictional High Court in the case of Kishorbhai Harjibhai Patel vs Income Tax Officer (2014) 417 ITR 547 pointing out therefrom that the Hon'ble Court had categorically stated that when permission is granted by authorities concerned for sale of agricultural land to non-agriculturist, the land does not cease to be agricultural land merely because of such permission being granted; that if the conditions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a consequence is of Rs.65,54,400/-. We shall first bring out the fact relating to the issue culled out from the orders of the authorities below before us. 10. The assessee had entered into a bhanakhat dated 31.8.2016 to purchase land. At the time of the agreement entered into, no payment had been made to the seller of the land. The land said to be purchased at the time of entering to bhanakhat was an agricultural land. Subsequently, on 3.5.2017, the assessee executed the sale deed for the purchase of the impugned land for consideration of Rs.2.01 crores. The stamp duty value of the same was Rs.3,32,64,000/- for non-agricultural residential use purpose. The assessee's share in the impugned property was 47.5%. 11. An application for the conversion of the said land from agricultural to non-agricultural land was made by the vendor, which was approved by the District Collector vide his order dated 15.2.2017. Thus, chronology of events is that - * on 31.8.2016 the assessee entered into a bhanakhat for purchase of agricultural land; * on 15.2.2017 the agricultural land was converted into non- agricultural land vide order of the Collector; * on 3.5.2017, the land was ultimately pur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m any person or persons on or after the 1st day of April, 2017,- (a) any sum of money, without consideration, the aggregate value of which exceeds fifty thousand rupees, the whole of the aggregate value of such sum; (b) any immovable property,- (A) without consideration, the stamp duty value of which exceeds fifty thousand rupees, the stamp duty value of such property; (B) for a consideration, the stamp duty value of such property as exceeds such consideration, if the amount of such excess is more than the higher of the following amounts, namely:- (i) the amount of fifty thousand rupees; and (ii) the amount equal to ten per cent of the consideration: .... .... .... .... ..... Provided also that where the stamp duty value of immovable property is disputed by the assessee on grounds 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 stamp duty value of such property for the purpose of this sub-clause ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ference of the same to the DVO. 17. Having noted so, we find in the facts of the present case that the assessee has consistently stated to the authorities below that the stamp duty valuation of the land purchased by him by treating it as non-agricultural land for residential use purpose was not acceptable for the reason that the assessee had purchased agricultural land. He had pointed out this fact of the land purchased being agricultural from the sale deed of the property clearly referring to the land purchased as agricultural land and also mentioning the fact that land be used for agriculture purposes after sale. The assessee had contended that the approval for its non-agriculture use had been taken from the Collector, as a matter of convenience only so that the assessee could easily use it for non-agriculture purpose, if required, but the land had been purchased as agriculture land and for agriculture purpose only; That therefore, the stamp duty valuation of the land as non-agricultural residential use was always disputed. These facts were brought out before us through the relevant sale deed, and through the contentions made to the authorities below, and which have not been dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hased on 3.5.2017. The relevant extract of the valuation from the DVO's report reads as under: 20. In view of the above facts, since on a valid reference made to the DVO for the valuation of the fair market value of the impugned property/land in terms of provisions of law in this regard, the FMV has been found to be in excess of approximately of Rs.20 lakhs only, i.e within 10% range of the purchase consideration of Rs.2.01 crores, there is no material difference between the FMV of the property and the purchase consideration for which it was purchased. 21. Further in the light of the fact that the DVO has found the FMV of the land to be far less than its stamp duty value being Rs.2.23 Crs as opposed to its stamp duty value of Rs.3.32 crs, there is no case with the Revenue for considering the stamp duty value of the land for computing the addition to be made to the income of the assessee in terms of section 56(2)(x) of the Act. At the most, the FMV could be taken for the purpose of determining the excess between the FMV and the purchase consideration, but since the difference is only to the tune of Rs.20 lakhs, which is approximately 10% of the purchase consideration of the proper ..... X X X X Extracts X X X X X X X X Extracts X X X X
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