Section 56(2)(x) applies to MHADA leasehold rights purchases below stamp duty value, while valuation needs fresh DVO review.

Section 56(2)(x) can apply to the purchase of rights in a room or tenement in an MHADA leasehold building where consideration is below stamp duty value; reliance on section 50C is inapposite because that provision is confined to capital gains computation, while section 56(2)(x) governs receipt of immovable property for inadequate consideration more broadly. On valuation, the matter calls for fresh examination with a Departmental Valuation Officer report, and the addition must then be recomputed after hearing the assessee. The statutory applicability was upheld, but the valuation aspect was remitted for de novo determination.

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Issues: (i) whether section 56(2)(x) of the Income-tax Act, 1961 applies to the purchase of rights in a room or tenement situated in a leasehold building owned by MHADA for consideration lower than the stamp duty value; (ii) whether, on the assessee's alternative plea, the valuation dispute required reference to the Departmental Valuation Officer.

Issue (i): whether section 56(2)(x) of the Income-tax Act, 1961 applies to the purchase of rights in a room or tenement situated in a leasehold building owned by MHADA for consideration lower than the stamp duty value.

Analysis: The assessee purchased rights in a room or tenement in a leasehold building for consideration lower than the stamp duty value. The reliance placed on authorities dealing with section 50C was held to be inapposite because that provision operates in the limited field of capital gains computation, whereas section 56(2)(x) taxes receipt of immovable property for inadequate consideration and operates more broadly. The transaction was therefore not taken outside the scope of section 56(2)(x) merely because the property rights arose in a leasehold MHADA structure.

Conclusion: The applicability of section 56(2)(x) was upheld and the assessee failed on this issue.

Issue (ii): whether, on the assessee's alternative plea, the valuation dispute required reference to the Departmental Valuation Officer.

Analysis: The assessee specifically sought a valuation reference in case the primary objection failed. The valuation aspect was treated as a limited issue requiring fresh examination. The matter was therefore restored for obtaining a DVO report and recomputing the addition, if any, in accordance with law after giving the assessee an opportunity of hearing.

Conclusion: The valuation issue was restored to the Assessing Officer for de novo adjudication and reference to the Departmental Valuation Officer was directed in substance.

Final Conclusion: The addition was sustained on the question of statutory applicability, but the valuation aspect was remanded for fresh determination, resulting in only partial relief to the assessee.

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