Section 50C benefit and DVO valuation limit further relief under section 56(2)(vii)(b), while cash deposits were remanded.

Where an assessee had already received the benefit of section 50C and did not challenge the DVO valuation, the third proviso to section 56(2)(vii)(b) was treated as unavailable for further relief, and the property-related addition was sustained. On the cash-deposit issue, the assessee filed additional material to explain deposits as linked to purchases for friends and relatives and commission activity; because the record remained incomplete and the new evidence required factual verification, the matter was remanded to the Assessing Officer for examination in accordance with law. The appeal therefore succeeded only to the limited extent of remand on the cash-deposit addition.

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Issues: (i) Whether addition made under section 56(2)(vii)(b) of the Income-tax Act, 1961 was sustainable where the assessee had already been given the benefit of section 50C and the DVO valuation was not challenged; (ii) Whether the addition for alleged unexplained cash deposits was to be sustained or the matter required admission of additional evidence and remand for verification.

Issue (i): Whether addition made under section 56(2)(vii)(b) of the Income-tax Act, 1961 was sustainable where the assessee had already been given the benefit of section 50C and the DVO valuation was not challenged.

Analysis: The valuation of the immovable property was referred to the DVO, who estimated it at a figure only marginally above the declared value. The assessee had already been granted the statutory benefit flowing from section 50C, and the DVO report was not disputed. In that situation, the third proviso to section 56(2)(vii)(b) was held not to be available for further relief.

Conclusion: The addition under section 56(2)(vii)(b) was upheld and the issue was decided against the assessee.

Issue (ii): Whether the addition for alleged unexplained cash deposits was to be sustained or the matter required admission of additional evidence and remand for verification.

Analysis: The assessee produced additional documents before the Tribunal to support the explanation that the cash deposits were connected with purchases made for friends and relatives and with commission-based activity. The evidence was taken on record, but the primary bank and credit-card materials were still incomplete for final adjudication. As the new material was relevant and required factual verification, the issue was restored to the jurisdictional Assessing Officer for examination in accordance with law.

Conclusion: The matter relating to the cash-deposit addition was remanded for verification and the issue was decided partly in favour of the assessee.

Final Conclusion: The appeal succeeded only to the limited extent of remand on the cash-deposit issue, while the addition relating to the property valuation remained undisturbed.

Ratio Decidendi: Once the assessee has already received the benefit of section 50C and the DVO valuation is not challenged, the third proviso to section 56(2)(vii)(b) cannot be invoked for further relief; where additional evidence is material but incomplete, factual verification may justify remand.

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