Section 50C and cost valuation principles: stamp value substitution is limited, and unrebutted expert valuation prevails.

Section 50C is treated as a limited deeming provision for capital gains computation: the stamp valuation can be substituted for the declared consideration only where the provision applies, and it does not authorise an open-ended estimate of higher consideration without material showing extra payment. The text also notes that, for cost of acquisition as on 1-4-1981, a registered valuer's supported valuation should be adopted where the Revenue does not rebut it with cogent evidence; unsupported comparable instances are insufficient. The overall effect described is acceptance of the assessee's capital gains computation on both points.

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Issues: (i) Whether the value adopted by the stamp valuation authority could be substituted as the full value of consideration for computing capital gains under section 50C of the Income-tax Act, 1961. (ii) Whether the cost of acquisition as on 1-4-1981 was to be taken at Rs. 60 per sq. mtr. as claimed by the assessee or Rs. 25 per sq. mtr. as adopted by the Assessing Officer.

Issue (i): Whether the value adopted by the stamp valuation authority could be substituted as the full value of consideration for computing capital gains under section 50C of the Income-tax Act, 1961.

Analysis: The transfer had already taken place in substance, and the record showed receipt of consideration in line with the declared figure. Section 50C creates a legal fiction limited to substituting the stamp valuation for the apparent consideration where applicable; it does not permit an open-ended estimate of a higher market price in the absence of evidence of extra consideration. The deeming provision was held to apply to the transaction, and there was no material to support enhancement beyond the consideration reflected in the transaction documents and surrounding record.

Conclusion: The higher enhancement made by the lower authorities was not sustainable and was deleted, in favour of the assessee.

Issue (ii): Whether the cost of acquisition as on 1-4-1981 was to be taken at Rs. 60 per sq. mtr. as claimed by the assessee or Rs. 25 per sq. mtr. as adopted by the Assessing Officer.

Analysis: The assessee's valuation was supported by a registered valuer's report taking into account relevant factors, while the lower figure adopted by the Assessing Officer lacked adequate basis beyond comparable instances that were not shown to be decisive. The revenue did not rebut the technical valuation evidence with any stronger material.

Conclusion: The cost of acquisition was to be taken at Rs. 60 per sq. mtr., in favour of the assessee.

Final Conclusion: The additions were deleted and the assessee's computation of capital gains was accepted, resulting in relief on both substantive issues.

Ratio Decidendi: Section 50C operates as a limited deeming provision for substitution of stamp value in capital gains computation, and where the assessee's valuation evidence on cost of acquisition is not rebutted by cogent material, the supported valuation must be adopted.

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