Deemed gift valuation under the Gift-tax Act cannot rest on stamp duty value alone without reference to the Valuation Officer.

The article addresses whether a gap between declared sale consideration and stamp duty valuation can be assessed as a deemed gift under the Gift-tax Act. It states that stamp duty valuation alone is not conclusive of fair market value for gift-tax purposes, and that where the Assessing Officer seeks to determine market value, reference to the Valuation Officer/Valuation Cell is mandatory under the statutory valuation scheme. It further notes that the assessee's explanation for depressed value was supported by surrounding circumstances and was not rebutted by enquiry or comparable material. On that basis, the deemed-gift addition was held unsustainable and the assessment on this issue was vitiated.

---

---

Issues: Whether the difference between the declared sale consideration and the stamp duty valuation could be treated as a deemed gift under section 4(1)(a) of the Gift-tax Act without reference to the Valuation Officer.

Analysis: The transfer of five plots was examined in the context of the declared consideration, the surrounding factual circumstances affecting value, and the absence of evidence that any extra consideration had passed. The decision also turned on the statutory scheme governing valuation under the Gift-tax Act, read with the corresponding valuation provisions under the Wealth-tax Act, and on the Board circular relied upon by the assessee. The cited tribunal decisions were followed for the proposition that where the Assessing Officer seeks to determine market value for gift-tax purposes, reference to the Valuation Cell is mandatory and stamp duty valuation by itself is not conclusive of fair market value. On the facts, the assessee's explanation regarding depressed value was not rebutted by any enquiry or comparable material.

Conclusion: The addition as deemed gift was not sustainable. The stamp duty value could not be adopted as the sole basis for valuation, and the failure to refer the matter to the Valuation Officer vitiated the assessment on this issue.

---