Agriculture land covered u/s 56

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Querist : Anonymous

Querist : Anonymous (Querist)

13 June 2014 Purchase of Agriculture Land not being a capital assets in lower consideration then guideline value. The difference is liable for Tax U/s 56 ?

Nikhil Kaushik

Nikhil Kaushik (Expert)

13 June 2014 section 56(2)(vii) doesnt differentiate between agriculture or non-agriculture land. so difference in stamp value/guidance value can be taxed under section 56(2)(vii)(c)

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)

13 June 2014 yes sec 56 (2) is applicable in this case as narrarted above.

Querist : Anonymous

Querist : Anonymous (Querist)

16 June 2014 That as per Explanation of this Clause 56 (vii)(b):
Explanation-
(d) "property" [ means the following capital asset of the assessee namely;-]

(i) Immovable property being land or building or both;

That as per the above mentioned clarification the said section is applicable on capital asset of the assessee and in present case the said land is not being a capital asset.

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)

16 June 2014 56(2) doesnt make any diff for agricultural and non agri land.

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)

16 June 2014 56(2) doesnt make any diff for agricultural and non agri land.

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)

16 June 2014 56(2) doesnt make any diff for agricultural and non agri land.

Querist : Anonymous

Querist : Anonymous (Querist)

16 June 2014 but Explanation make a diff between capital asset and other then capital asset

Querist : Anonymous

Querist : Anonymous (Querist)

16 June 2014 And as per Explanation of Property only capital asset of the assessee are covered

Querist : Anonymous

Querist : Anonymous (Querist)

16 June 2014 And as per Explanation of Property only capital asset of the assessee are covered

Nikhil Kaushik

Nikhil Kaushik (Expert)

16 June 2014 dear querist,

please note section 56(2)(vii) talks only about property...you are inserting the word "capital asset" which is not in the section as such.

agriculture land is excluded from the definition of capital asset subject to certain conditions. It is not excluded from the definition of land!

Querist : Anonymous

Querist : Anonymous (Querist)

16 June 2014 "capital asset@ word is in the explanation of property U/s section 56(2)(vii)

Nikhil Kaushik

Nikhil Kaushik (Expert)

16 June 2014 yes it does. but please note that in income tax wherever the land is to be excluded out of provisions of the act, it is specifically mentioned. For eg, section 194-IA states " resident transferor any sum by way of consideration for transfer of any immovable property (other than agricultural land)...."

under section 56(2)(vii) no such distinction has been made. This view is reverberated by experts like Rajan Vora (please refer www.imcnet.org/Presentations/RajanVora.ppt slide no 9)

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