Section 50C valuation disputes require a DVO reference when the assessee challenges the stamp value as overstated.

Where an assessee disputes the stamp valuation adopted for a transfer and asserts that the declared consideration reflects fair market value, section 50C(2) is attracted. In that situation, the Assessing Officer cannot rely only on the stamp authority's figure; the statutory safeguard requires a reference to the Departmental Valuation Officer for independent determination. The objection need not be framed in elaborate terms if it shows that the stamp value exceeds the actual transaction value and is supported by comparable local transfers. Capital gains must then be recomputed on the basis of the valuation process prescribed by law.

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Issues: Whether, on the facts of the case, the value adopted by the stamp valuation authority could be applied under section 50C of the Income-tax Act, 1961 without making a reference to the valuation officer when the assessee disputed the adopted value and claimed that the actual consideration reflected the fair market value.

Analysis: The assessee did not merely dispute the stamp value in general terms but asserted that the adopted value exceeded the actual transaction value and referred to comparable transfers in the same locality at lower consideration. That was sufficient to attract section 50C(2) of the Income-tax Act, 1961. Once such objection was raised, the Assessing Officer was required to adopt the statutory machinery for determining value and not to conclude the matter solely on the basis of the stamp valuation. The valuation process contemplated a reference for independent determination, and the assessee could not be denied that statutory safeguard merely because the stamp authority's figure had been used for registration purposes.

Conclusion: The matter could not be decided finally on the basis of the stamp valuation alone, and the Assessing Officer was required to refer the valuation to the Departmental Valuation Officer and recompute capital gains accordingly.

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