Section 50C cannot replace declared consideration for tenancy rights; capital gains follow actual sale value absent understatement.

Section 50C does not extend to transfer of tenancy rights, because its deeming fiction is confined to land or building, or both. Capital gains must therefore be computed on the actual consideration received or accruing unless there is material showing understatement, and an unregistered assignment or absence of stamp duty does not by itself justify substitution of market value. The declared sale consideration for tenancy rights was correctly adopted.

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Issues: Whether section 50C could be invoked to substitute the declared sale consideration on transfer of tenancy rights for computation of capital gains.

Analysis: The transfer of tenancy rights was accepted as a capital asset, but the dispute concerned only the sale consideration. Capital gains are to be computed on the basis of the consideration actually received or accruing, unless there is material to show understatement. Section 50C is a specific deeming provision confined to transfer of land, building, or both, and its stamp duty substitution mechanism cannot be extended to tenancy rights or leasehold rights. The fact that the assignment document was unregistered and no stamp duty had been paid did not justify adopting market value in place of the declared consideration in the absence of evidence of understatement.

Conclusion: Section 50C was not applicable to the transfer of tenancy rights, and the declared sale consideration was rightly adopted.

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