Mayur Kanubhai Shah vs ITO, Ward 19(2)(2), Mumbai

Parties Involved

Facts Summary

The assessee, Mayur Kanubhai Shah, purchased a property valued at Rs.93,77,103/-, whereas the fair market value for stamp duty purposes was Rs.2,69,74,200/-. During the assessment proceeding, the Learned Assessing Officer (Ld. AO) questioned the difference between the agreement value and the stamp duty value, suggesting a contravention of section 56(2)(viib) of the Income-tax Act, 1961. The assessee explained that the property was rural agricultural land, to which the section does not apply. The Ld. AO rejected this explanation and added the difference amount of Rs.1,75,97,097/- under section 56(2)(viib). The assessee appealed to the Commissioner of Income-tax (Appeals) (Ld. CIT(A)), who upheld the assessment order. Aggrieved, the assessee filed an appeal before the Income Tax Appellate Tribunal.…

Legal Issues

• 1. Whether the property purchased by the assessee is rural agricultural land and thus exempt from the provisions of section 56(2)(viib) of the Income-tax Act, 1961.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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