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Section 56(2)(x) on agriculture land in Rural area

Others 874 views 2 replies

Rajat Sharma

Accountant

647 Points Posted on 04 April 2026

Respected Sir The Ld AO has computed the income difference between circle rate and Market value under section 56 (2)(x), sir the assessee purchased an agriculture land and consideration was fixed both parties for Rs 2695000/-whereas the registration authority fixed the value for stamp duty and registration charges for Rs 13732450/- ,In the order AO compute the tax on difference amount.Sir against the order appeal has been filled,now for written submission I want the help from your authority with strong case law.thanking you

Replies (2)

Quick Summary

Addition u/s 56(2)(x) on rural agricultural land can be contested as it's not a capital asset u/s 2(14). Assessee can also challenge stamp value via DVO and rely on favorable ITAT rulings.

Aashok FC Advisory

Finance Compliance Consultant

1025 Points Posted on 04 April 2026

If the land is rural agricultural land, your case is strong because such land is not a capital asset under Section 2(14), and several ITAT decisions have held that Section 56(2)(x) should not apply. Even otherwise, you can argue for DVO valuation and challenge inflated stamp duty value to reduce or eliminate the addition.