Beneficial ownership governs tax liability: non contributing title holder should not bear valuation addition when another funded and declared ownership.

An addition computed as the difference between stamp duty value and actual consideration under the income-tax provision cannot be sustained against a purchaser who furnished no consideration where the purchase was funded entirely by another person who declared the property as his own; the operative test is beneficial ownership and source of funds, not mere inclusion of a name on title. Authorities relied on by Revenue addressing other valuation or civil issues do not speak to levy under this provision; accordingly the tax consequence, if any, should be assessed in the hands of the true funder and owner.

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Issues: Whether an addition under Section 56(2)(x) of the Income-tax Act, 1961, representing the difference between stamp duty value and actual consideration, can be made in the hands of a purchaser who did not contribute any funds for the purchase and whose husband alone paid the entire consideration and declared the property as his own.

Analysis: The addition challenged is under Section 56(2)(x) of the Income-tax Act, 1961, calculated as the difference between stamp duty value and actual purchase consideration. The factual matrix establishes that the entire purchase consideration was paid from the husband's funds, he declared the property as his own in his balance sheet and before his assessing officer, and the assessee did not contribute any amount towards the purchase though her name appears on the title due to prevailing custom. The analysis focuses on ownership and beneficial interest for tax purposes rather than mere inclusion of name on title. Authorities cited by the Revenue pertain to different legal contexts (annual letting value and civil disputes) and do not address the applicability of Section 56(2)(x) where the substantive investment and declaration of ownership rest with another person. Applying principles of beneficial ownership and substance over form, the payment source and declarations indicate that the husband alone is the owner for Income-tax Act purposes; therefore, the assessment under Section 56(2)(x) should, if at all, be in his hands.

Conclusion: The addition under Section 56(2)(x) of the Income-tax Act, 1961, cannot be sustained in the hands of the purchaser who did not contribute funds; the result is in favour of the assessee and the impugned addition is to be deleted.

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