Section 56 valuation on immovable property must follow the agreement date where part payment was made before registration.

The proviso to Section 56(2)(vii)(b) applied because the assessee had booked the flat, made part payment by cheque before the agreement date, and the booking form, allotment letter and agreement for sale recorded the same consideration accepted by the seller. On those facts, there was a fixed agreement for transfer with substantial compliance with the booking terms, so the stamp duty value had to be tested with reference to the booking or agreement date, not the later registration date. The addition made on the basis of the registration-date value was therefore deleted.

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Issues: Whether the addition made under Section 56(2)(vii)(b) of the Income-tax Act, 1961 on account of purchase of immovable property was sustainable, or whether the proviso applied so that the stamp duty value had to be taken with reference to the date of booking/agreement and not the later date of registration.

Analysis: The Appellant had booked the flat on 05.06.2012 and had made part payment by cheque on 01.06.2012, followed by further non-cash payments. The booking form, allotment letter and agreement for sale all recorded the same consideration, and the seller accepted the payments made. On the record, the payment pattern showed substantial compliance with the booking terms and established that there was an agreement fixing the consideration for transfer of the immovable property. Since the statutory conditions for applying the proviso to Section 56(2)(vii)(b) were satisfied, the relevant stamp duty value had to be compared with the value on the date of the agreement/booking and not on the later registration date.

Conclusion: The addition under Section 56(2)(vii)(b) was unsustainable and was deleted; the issue was decided in favour of the Assessee.

Ratio Decidendi: Where consideration for transfer of immovable property is fixed and part thereof is paid by a non-cash mode on or before the date of the agreement, the proviso to Section 56(2)(vii)(b) applies and the stamp duty value must be tested with reference to the agreement date.

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