Sir
Our assessee purchase rural agricultural land
below the value of Sec 50C.
Whether difference between values under
sec 50C. and purchase price taxable under Section 56(2)(viib)
In my opinion as per explanation D of
Section 56(2)(viib), not applicable in case of rural agricultural land (not a
capital assets)
Please guide me.
Reply
As
per section 56(2)(vii)(b) any immovable property purchased whose actual cost is
less than stamp value by amount exceeding Rs. 50,000/- is brought to tax in
hands of purchaser. This section uses the term "any immovable
property" and it has neither differentiated it into capital and
non-capital asset nor has defined the term "immovable property" by
way of any explanation. Definition of "property" given in explanation
is related to clause (c) of sec 56(2)(vii). As a result, when a rural
agricultural land is sold for less than stamp value there is no taxation for
difference in stamp value and actual consideration in hands of seller, however
this difference is chargeable to tax in hands of purchaser.