Capital gains valuation under section 52(2) requires proof of extra consideration beyond the sale deed amount.

Section 52(2) of the Income-tax Act, 1961 can be invoked only where there is material showing that consideration higher than the sale deed amount actually passed between the parties. In the absence of proof of understatement or extra consideration, the recorded sale price cannot be displaced merely because the property's market value is estimated to be higher. The Tribunal's finding that no such proof existed was consistent with the Supreme Court's position, and the declared sale consideration was rightly adopted for capital gains computation.

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Issues: Whether section 52(2) of the Income-tax Act, 1961 could be invoked to substitute the stated sale consideration with the fair market value of the property for computing capital gains in the absence of proof of extra consideration.

Analysis: The statutory power under section 52(2) could be applied only where there was material to show that consideration higher than that recorded in the sale deed had in fact passed between the parties. In the absence of proof of understatement or extra consideration, the disclosed sale price could not be displaced merely on the basis of a higher estimated market value. The Tribunal's finding that no such proof existed was supported by the legal position declared by the Supreme Court.

Conclusion: Section 52(2) of the Income-tax Act, 1961 could not be invoked on the facts, and the declared sale consideration was rightly adopted for capital gains computation.

Ratio Decidendi: Section 52(2) can be applied only when there is proof that the purchaser paid consideration over and above the amount stated in the sale deed.

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