Agreement-date stamp duty value governs property valuation where prior consideration is fixed and conditions are satisfied.

Where an immovable property transaction is backed by an earlier agreement fixing consideration and the payment is made in accordance with the statutory conditions, the stamp duty value must be tested with reference to the agreement date rather than the registration date. On that basis, the Revenue cannot ignore the prior agreement and substitute the registration-date stamp duty value for the agreed consideration. The addition under section 56(2)(x)(b)(B) was therefore not sustainable and was deleted.

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Issues: Whether addition under section 56(2)(x)(b)(B) of the Income-tax Act, 1961 could be made by adopting the stamp duty value on the date of registration instead of the consideration fixed under the earlier agreement.

Analysis: The transaction was supported by an earlier agreement and the record indicated that the consideration had been fixed prior to registration, with payment having been made in accordance with that arrangement. In these circumstances, the proviso governing adoption of stamp duty value with reference to the agreement date, where the prescribed conditions are satisfied, was held applicable. The Revenue authorities were not justified in disregarding the earlier agreement and substituting the registration-date stamp duty value as the purchase consideration.

Conclusion: The addition under section 56(2)(x)(b)(B) was not sustainable and was deleted in favour of the assessee.

Ratio Decidendi: Where an earlier agreement fixing consideration is supported by payment in accordance with the statutory conditions, stamp duty value must be examined with reference to the agreement date and not the registration date.

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