Agricultural Land Classified as Residential by SVA: ITAT Directs Fresh Verification by CIT(A) on Addition u/s 56(2)(x)(b) [Read Order]

Silverton Pulp and papers Private Limited, appellant-assessee, was engaged in manufacturing and trading of White Paper and Kraft Paper. During the year under appeal, it purchased agricultural land for Rs. 16,57,500/- and paid stamp duty of Rs. 3,28,000/-.

The Assessing Officer (AO) noted that the stamp valuation authority had valued the property at Rs. 46,72,000/- treating it as residential and made an addition of Rs. 30,14,500/- under section 56(2)(x)(b).

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An adhoc disallowance of Rs. 5,00,000/- was also made on expenses. The assessee challenged the order before CIT(A), who partly allowed the appeal but upheld the addition. The assessee then filed an appeal before the tribunal.

The assessee counsel requested an adjournment, which was rejected. The Department counsel argued that the CIT(A) had given a reasoned order and the addition was correctly upheld.

The two member bench Yogesh Kumar U.S (Judicial Member) and Manish Agarwal (Accountant Member) reviewed the record and heard the parties. The assessee contended that the agricultural land purchased was wrongly treated as residential, resulting in higher stamp duty, and that section 56(2)(x)(b) did not apply.

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The assessee also noted that the higher stamp duty applied only to land up to 0.10 hectare, whereas more land was purchased, and that no verification was done with the stamp authorities.

Considering these points, the tribunal restored the issue to the CIT(A) for verification and directed a fresh decision in accordance with law. The assessee was instructed to cooperate, and the grounds were allowed for statistical purposes.

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