Unexplained expenditure under Section 69C cannot rest on stamp duty valuation alone; notional addition deleted.

Section 69C could not support a notional addition based only on the difference between declared purchase price of agricultural land and its stamp duty valuation, because the provision applies only where actual unexplained expenditure is shown. In the absence of evidence that the assessee had in fact incurred the higher amount, the higher stamp valuation alone was insufficient to justify the addition. The later insertion of section 56(2)(x) also indicated that taxation of such valuation differences was introduced only for a subsequent period and did not apply to the assessment year in question. The addition was therefore deleted in favour of the assessee.

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Issues: Whether the addition of Rs. 18,82,500 under section 69C on account of the difference between the declared purchase price of agricultural land and its stamp duty valuation was sustainable.

Analysis: The addition was made only on the basis of the stamp duty valuation, without any evidence that the assessee had actually incurred expenditure of Rs. 68,70,000. Section 69C applies to real unexplained expenditure and does not authorise a notional addition merely because the stamp valuation is higher than the recorded purchase consideration. The later introduction of section 56(2)(x) also indicated that such differences were brought into tax only from the relevant later period and not for the assessment year in question.

Conclusion: The addition under section 69C was not justified and was deleted, in favour of the assessee.

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