Valuation dispute under section 56(2)(x) requires DVO reference and effective hearing before any addition is sustained.

Section 56(2)(x) valuation additions based on stamp duty value require reconsideration where the assessee disputes the valuation and seeks a DVO reference. The Tribunal noted that the request for DVO examination had not been addressed and that an effective opportunity of hearing should precede any sustained valuation-based addition. The matter was therefore remitted to the Assessing Officer for fresh determination after reference to the DVO and after granting the assessee an effective hearing; the addition was not finally sustained.

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Issues: Whether the addition made under section 56(2)(x) of the Income-tax Act, 1961 required fresh examination by referring the property valuation matter to the DVO and by granting the assessee an effective opportunity of hearing.

Analysis: The assessment was made by adopting the stamp duty value of the property, while the assessee had disputed the valuation and requested reference to the DVO. The Tribunal noted that the request for DVO reference had not been addressed before making the addition and that the assessee should have been afforded an effective opportunity before the valuation-based addition was sustained. In these circumstances, the matter required reconsideration by the Assessing Officer on the valuation issue before applying section 56(2)(x).

Conclusion: The issue was remitted to the Assessing Officer with a direction to refer the matter to the DVO and to pass a fresh order after granting the assessee an effective opportunity of hearing; the addition was not finally sustained.

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