Section 50C applies without independent proof of extra consideration, while fresh valuation evidence was admitted and remanded.

Section 50C operates as a self-contained deeming provision for capital gains computation: where declared transfer consideration for land or building is below stamp duty value, the stamp value may be adopted without independent proof of actual understatement or receipt of extra consideration, subject to the statutory safeguards in sub-sections (2) and (3). Additional evidence on industrial land rates and restrictive user of the property was held relevant to the valuation dispute, admitted in the interests of justice, and the valuation issue was remanded to the Assessing Officer for fresh consideration on that material.

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Issues: (i) Whether section 50C of the Income-tax Act, 1961 could be invoked without independent evidence of understatement of sale consideration or receipt of extra consideration. (ii) Whether the assessee's additional evidence on valuation ought to be admitted and the valuation issue restored for fresh adjudication.

Issue (i): Whether section 50C of the Income-tax Act, 1961 could be invoked without independent evidence of understatement of sale consideration or receipt of extra consideration.

Analysis: The provision was contrasted with section 52(2) of the Income-tax Act, 1961 and the proviso to section 12B(2) of the Indian Income Tax Act, 1922. Those provisions required a belief about understatement and had been read down in earlier decisions. Section 50C, however, operates on a different statutory basis: where the declared consideration for transfer of land or building is lower than the stamp duty value, the latter is deemed to be the full value of consideration for section 48 purposes, subject to the statutory safeguards in sub-sections (2) and (3). The requirement of independent proof that the assessee actually received more than what was stated in the sale deed was held not to be a condition precedent under section 50C.

Conclusion: The challenge to the applicability of section 50C failed and the preliminary legal ground was rejected.

Issue (ii): Whether the assessee's additional evidence on valuation ought to be admitted and the valuation issue restored for fresh adjudication.

Analysis: The additional material concerning industrial land rates and restrictive user of the property was found relevant to the valuation dispute. One document was considered unavailable at the assessment stage because it was obtained after completion of the assessment, and the other was found necessary in the interests of justice to test the valuation adopted by the DVO. In these circumstances, the refusal to admit the material was not sustained, and the valuation dispute was considered fit for fresh examination by the Assessing Officer in the light of the admitted evidence.

Conclusion: The additional evidence was admitted and the valuation issue was remanded to the Assessing Officer for fresh decision.

Final Conclusion: The legal objection to section 50C was rejected, but the valuation dispute was reopened for fresh consideration, resulting in only partial relief to the assessee.

Ratio Decidendi: Section 50C is a self-contained deeming provision for computation of capital gains, and independent proof of actual understatement or receipt of extra consideration is not a prerequisite for its invocation when the declared consideration is below the stamp valuation.

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