Stamp duty value cannot override an earlier fixed allotment price; deduction claim remanded for verification of supporting documents.

Addition under section 69B was deleted where the assessee showed that the property had been allotted earlier at a fixed price and payments were made in instalments under that allotment letter; the stamp duty value on the registration date and the DVO report did not displace that explanation, so the basis for treating the difference as unexplained was not made out. The deduction claim under section 35AC was restored for verification because the assessee had produced a notification and donation receipts, but the supporting material still required factual examination before final allowance. Relief was thus partly granted: the valuation addition failed, while the deduction issue was remanded.

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Issues: (i) Whether the addition made under section 69B of the Income-tax Act, 1961, on the difference between the allotment consideration and the stamp duty value as on the date of registration was sustainable. (ii) Whether the disallowance of deduction claimed under section 35AC of the Income-tax Act, 1961, required re-examination in view of the supporting material produced.

Issue (i): Whether the addition made under section 69B of the Income-tax Act, 1961, on the difference between the allotment consideration and the stamp duty value as on the date of registration was sustainable.

Analysis: The assessee established that the property had been allotted earlier, the consideration was fixed in the allotment letter, and the payments were made in instalments in accordance with that agreed price. The authorities below relied on the stamp duty value adopted on the date of registration and also on the DVO report, but the relevant statutory exceptions concerning the date of agreement and the applicable value were not properly applied. On the facts, the explanation offered by the assessee was found sufficient and the basis for invoking section 69B was not made out.

Conclusion: The addition under section 69B was deleted and the issue was decided in favour of the assessee.

Issue (ii): Whether the disallowance of deduction claimed under section 35AC of the Income-tax Act, 1961, required re-examination in view of the supporting material produced.

Analysis: The assessee produced a notification and donation receipts in support of the deduction claim, while the lower authorities had disallowed the claim for want of verification. Since the supporting documents were stated to have been placed on record, the matter required factual verification before a final allowance could be made. A limited remand for verification was therefore appropriate.

Conclusion: The issue was restored to the Assessing Officer for verification and fresh decision on the deduction claim.

Final Conclusion: The appeal succeeded on the valuation addition and the deduction claim was sent back for verification, so the overall relief was granted only in part.

Ratio Decidendi: Where an assessee proves that the consideration was fixed and paid pursuant to an earlier allotment, an addition based solely on the stamp duty value at registration is not justified under section 69B; a deduction claim supported by documents may be remanded where verification is still necessary.

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