Stamp duty value additions require Valuation Officer reference when fair market value is disputed; direct adoption is unsustainable.

When an assessee disputes the stamp duty value of immovable property under section 56(2)(vii), the Assessing Officer must first follow the statutory mechanism of reference to the Valuation Officer before treating the difference as income. Direct adoption of the stamp duty or circle rate value, without corroborative material showing extra consideration, is not sufficient. The deeming provision operates strictly, and failure to comply with the prescribed valuation procedure makes the addition unsustainable; the addition was deleted.

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Issues: Whether the addition made by applying section 56(2)(vii)(b)(ii) on the basis of stamp duty value of the property, without referring the valuation dispute to the Valuation Officer, was sustainable.

Analysis: The assessee purchased immovable property for a declared consideration lower than the stamp duty value. The assessment was made by directly adopting the circle rate difference as income, without bringing on record corroborative material to show extra consideration. Where the assessee disputed the stamp valuation as not reflecting fair market value, the statutory scheme required reference to the Valuation Officer. The deeming provision was held to be strict in application, and the failure to follow the prescribed procedure could not be cured by remanding the matter to allow the Revenue to fill evidentiary gaps.

Conclusion: The addition was unsustainable for non-compliance with the mandatory valuation procedure and was deleted, in favour of the assessee.

Ratio Decidendi: When an assessee disputes the stamp duty value of immovable property for the purpose of section 56(2)(vii), the Assessing Officer must follow the statutory mechanism of reference to the Valuation Officer before making an addition on that basis; failure to do so renders the addition unsustainable.

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