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Facts
The assessee purchased agricultural land for Rs. 96,01,111/-. The stamp duty value was Rs. 1,30,00,000/-. The Assessing Officer invoked Section 56(2)(x) and made an addition of Rs. 33,98,889/-.
Held
The Tribunal noted that a portion of the land was acquired by NHAI and the DVO's valuation for the remaining 0.87 hectare land was Rs. 95,12,100/-, which was less than the purchase consideration. Therefore, there was no justification for invoking Section 56(2)(x).
Key Issues
Whether the addition made by the Assessing Officer under Section 56(2)(x) for the difference between the stamp duty value and purchase consideration of agricultural land is justified.
Sections Cited
56(2)(x), 143(3), 143(3A), 143(3B)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, NAGPUR BENCH, NAGPUR
Before: DR.MANISH BORAD
Appellant by : Shri Rachit Thakar (Virtual) Respondent by : Shri Surjit Kumar Saha (Virtual) Date of hearing : 09.03.2026 Date of pronouncement : 10.03.2026 आदेश / ORDER The captioned appeal at the instance of assessee pertaining to A.Y. 2018-19 is directed against the order dated 25.08.2025 framed by National Faceless Appeal Centre, Delhi arising out of Assessment Order dated 05.04.2021 passed u/s. 143(3) r.w.s.143(3A) & 143(3B) of the Income Tax Act, 1961 (in short ‘the Act’).
The only grievance of the assessee is against the addition of Rs.4,90,889/- sustained by ld.CIT(A) u/s.56(2)(x) of the Act.
I have heard the rival contentions and perused the record placed before me. Assessee is an individual and declared income of Rs.8,41,720/- in the income tax return for A.Y. 2018-19 furnished on 24.09.2018. Case selected for Limited Scrutiny for examining the investment in immovable property.
Dinkar Bhanudas Narkhede After serving valid notices u/s.143(2) and 142(1) of the Act, the assessment proceedings were carried out. Ld. Assessing Officer observed that assessee has purchased the Agricultural land admeasuring 1Hectare situated at Bahapura, National Highway No.6, District Buldhana, for a purchase consideration of Rs.96,01,111/-. In the registered purchase deed, the stamp duty value adopted by the registering authority is Rs.1,30,00,000. For the difference amount of Rs.33,98,889/-, ld. Assessing Officer show caused the assessee for the invocation of section 56(2)(x) of the Act. The assessee requested for referring the matter to the Valuation Officer. However, due to the assessment getting time barred and that the Valuation Report by the Divisional Valuation Officer did not reach the ld. Assessing Officer, he concluded the proceedings making addition of Rs.33,98,889/- u/s.56(2)(x) of the Act. Income assessed at Rs.42,40,609/-.
Thereafter, the assessee carried the matter in appeal before ld.CIT(A). During the pendency of the appellate proceedings, Valuation Report from DVO, Nagpur dated 23.09.2021 came on record which ascertained the value of property for one Hectare land at Rs.1,00,92,000/- and for 0.87 Hectare land at Rs.95,12,100/-. These two valuations were made by the DVO for the single property as the appellant claimed that some portion of land was acquired by the National Highway Authority of India. The assessee contended before ld.CIT(A) that the valuation as per DVO for 0.87 Hectare land should be adopted and also contended that the assessee has incurred expenditure of Rs.17,32,453/- for acquiring the property which has included in the property document also and no addition u/s.56(2)(x) of the Act is called for. However, Dinkar Bhanudas Narkhede ld.CIT(A) adopted the DVO valuation at Rs.1,00,92,000/- for one hectare land and gave substantial relief to the asseseee, thereby sustaining the addition of Rs.4,90,889/-.
Before this Tribunal, ld. Counsel for the assessee reiterated the submissions made before ld.CIT(A). Taking into consideration the fact that some portion of the land has been acquired by the NHAI and only 0.87 Hectare land at Rs.95,12,100/-, I find that the valuation so adopted by the DVO is less than the purchase consideration of Rs.96,01,111/- paid by the assessee and therefore there remains no justification for invoking section 56(2)(x) of the Act. I therefore delete the addition of Rs.4,90,889/- made by the Assessing Officer.
Since I have already deleted the addition made by the Assessing Officer u/s.56(2)(x) of the Act at Rs.4,90,889/-, dealing with the alternate contentions and other grounds raised by the assessee would be merely academic in nature and the same are held to be infructuous.
In the result, the appeal of the assessee is allowed as per terms indicated hereinabove.
Order pronounced on this 10th day of March, 2026.