Addition based on stamp duty valuation requires reliance on DVO report; assessment set aside pending fresh valuation.

Addition under section 56(2)(vii)(b) premised on stamp duty value required adjudication after a valuation officer report; once the Assessing Officer made a statutory reference under section 142A the valuation so determined must be considered, and the period taken to obtain that report is excluded from limitation under Explanation 1(iv) to section 153. The Valuation Officer must send his report to the AO and the assessee, and completing assessment on limitation grounds without awaiting the DVO report is improper. ITAT set aside the appellate and assessment orders on this issue and restored the matter for fresh adjudication pending valuation.

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Issues: Whether the addition of Rs. 81,06,000 under section 56(2)(vii)(b) could be validly made without considering the valuation report of the District Valuation Officer after a statutory reference under section 142A, and whether the assessment and the CIT(A) order should be set aside and the matter restored to the Assessing Officer for fresh adjudication.

Analysis: The Assessing Officer made a reference to the District Valuation Officer under section 142A before completing the assessment, and no valuation report was received prior to the assessment order. Explanation 1(iv) to section 153 requires exclusion of the period from the date of reference to the Valuation Officer until receipt of his report for computation of limitation. Section 142A(6) contemplates that the Valuation Officer shall send his report to the Assessing Officer and the assessee within the prescribed period. Given the statutory scheme, the valuation report is integral to deciding the issue of valuation for invoking section 56(2)(vii)(b), and the assessment cannot be finally adjudicated without considering that report.

Conclusion: The assessment addition under section 56(2)(vii)(b) and the appellate order confirming it are set aside and the matter is restored to the file of the Assessing Officer for fresh adjudication after considering the valuation report of the District Valuation Officer and after affording the assessee a reasonable opportunity of being heard.

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