ISHWARBHAI GORDHANBHAI PRAJAPATI ,AHMEDABAD vs. INCOME TAX OFFICE WARD 3(3)(5) AHMEDABAD, AHMEDABAD

The Ld. CIT (Appeals) has erred in facts and on law in confirming the action of AO making addition of Rs 18,10,640/- invoking the provisions of Section 56(2)(x) of the Act. On facts and circumstances of the case, the provisions of Section 56(2)(x) are just not attracted in case of Appellant and entire addition made being incorrect and illegal is ought to have been deleted. The same be held now.

The Ld. CIT (Appeals) has erred in confirming the addition made of Rs 18,10,640/- without appreciating the fact that the consideration paid by Appellant is higher. than prevailing jantri rate applicable to agriculture land at that time. It is submitted that the land purchased by Appellant is an agriculture land only and additional Jantri collected merely because of Proposed Draft TP Scheme announced by AUDA. On facts and circumstances of the case, the entire addition made wrongly interpreting provisions of Section 56(2)(x) of the Act and being completely illegal and unjustifiable be deleted in the interest of justice. The same be held accordingly.

The Ld. CIT (Appeals) has erred in not appreciating the fact that the land purchased by the appellant was an agriculture land on the date of purchase and not at all N.A. Land at that time. On facts and circumstances of the case, by no stretch of imagination, the provisions of Section 56(2)(x) be applied in this case considering land purchased as N.A. Land and the addition made being totally wrong and baseless be deleted accordingly.

The lower authorities has failed in appreciating the fact that the consideration paid by Appellant to the seller party has been duly accepted by income tax authorities in case of seller and there is no addition on this count in case of seller invoking provisions of Section 50C or any other provisions of the Income tax Act. It is therefore submitted that once consideration paid has been accepted in case of seller, the same is ought to have been accepted in case of buyer applying principal of natural justice. Thus, the addition made applying Section 56(2)(x) being unwarranted and unjust be deleted accordingly.

Your appellant craves leave to add, alter and/or to amend all or any of the grounds before the final hearing.”

1. The assessee has raising the following additional grounds of appeal:

The brief facts of the case are that the assessee, Shri Ishwarbhai Gordhanbhai Prajapati, filed his return of income for Assessment Year 2018– 19 declaring a total income of Rs. 11,66,770. The assessee derived income from his proprietary business, M/s. Shree Bootbhavani Construction Co., as well as income under the heads “House Property,” “Capital Gains,” and “Other Sources.” During the course of assessment, the Assessing Officer (“AO”) noted that the assessee had jointly purchased agricultural land for a total consideration of Rs. 22,30,320, while the stamp duty valuation of the same property was Rs. 40,40,960. The AO observed that there was a difference of Rs. 18,10,640 between the purchase price and the value adopted for stamp duty purposes. The Assessing Officer invoked the provisions of section 56(2)(x) of the Act and treated this difference as income from other sources, holding that the assessee had received property for consideration less than its fair market value. Consequently, the AO made an addition of Rs. 18,10,640 to the returned income, and computed the total income at Rs. 29,77,410. Being aggrieved by the said addition, the assessee preferred an appeal before the Commissioner of Income Tax (Appeals) [CIT(A)].

Before the CIT(A), the assessee submitted that the land purchased was agricultural land and not non-agricultural (N.A.) land, as erroneously assumed by the AO. The assessee submitted that the land fell under a proposed draft Town Planning (T.P.) Scheme of the Ahmedabad Urban Asst. Year : 2018-19