Comparable land valuation must be reasoned, and section 50C applies when the conveyance is executed after commencement.

A valuation addition based on the Departmental Valuation Officer's report was reduced because different rates had been applied to comparable portions of the same land without a consistent, reasoned basis; the addition was recomputed at the lower rate. The objection that section 50C of the Income-tax Act did not apply because the agreement pre-dated the provision was rejected, as the relevant sale deed was executed after the provision came into force. The result was partial relief on valuation, while the section 50C challenge failed.

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Issues: (i) Whether the addition made by adopting the Departmental Valuation Officer's valuation required modification because different values were adopted for comparable portions of the same land; and (ii) whether section 50C of the Income-tax Act, 1961 was inapplicable to the transfer in question on the ground that the agreement was executed before the provision came into force.

Issue (i): Whether the addition made by adopting the Departmental Valuation Officer's valuation required modification because different values were adopted for comparable portions of the same land.

Analysis: The valuation adopted by the Departmental Valuation Officer was found to be excessive because different rates were applied to comparable portions of the same land without adequate reasons. The absence of a proper basis for adopting the higher value justified interference with the computation of addition.

Conclusion: The valuation was directed to be restricted to the lower rate adopted for one part of the land, and the addition was to be recomputed accordingly, in favour of the assessee.

Issue (ii): Whether section 50C of the Income-tax Act, 1961 was inapplicable to the transfer in question on the ground that the agreement was executed before the provision came into force.

Analysis: The provision was held to be applicable because the sale deed was executed after the provision had come into force. The earlier agreement did not displace the applicability of section 50C in the facts of the case.

Conclusion: The objection to the applicability of section 50C was rejected, against the assessee.

Final Conclusion: The addition was partly reduced on valuation grounds, but the challenge to the applicability of section 50C failed, resulting in partial relief to the assessee.

Ratio Decidendi: Where a valuation lacks a consistent and reasoned basis for comparable portions of the same property, the resulting addition may be adjusted; and section 50C applies where the relevant conveyance is executed after the provision has come into force.

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