Transfer of registered house property deed attracts long-term capital gains and section 50C, while 1.4.1981 valuation claim fails.

A registered sale deed conveying an interest in land and building constitutes a transfer of a capital asset chargeable to long-term capital gains, and section 50C applies to adopt the stamp valuation as the full value of consideration. The assessee's claim that the transfer was only on behalf of another person was not established from the record, so the capital gains addition was sustained. The plea to substitute the fair market value as on 1.4.1981 in place of the original cost of acquisition was also rejected because indexation had already been allowed on the original cost, and no further benefit survived.

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Issues: (i) whether the assessee's transfer of a registered house property deed attracted tax as long-term capital gains and whether section 50C of the Income-tax Act, 1961 applied; (ii) whether the assessee was entitled to substitute the fair market value as on 1.4.1981 in place of the original cost of acquisition.

Issue (i): whether the assessee's transfer of a registered house property deed attracted tax as long-term capital gains and whether section 50C of the Income-tax Act, 1961 applied.

Analysis: The property had been purchased under a registered deed and later sold under a registered sale deed in which the assessee was shown as seller and consideration was recorded as received. The earlier agreement to sell was not reflected in the later deed, and the claim that the transfer was only on behalf of another person was not established from the record. The property therefore constituted a capital asset in the form of an interest in land and building, and its transfer by registered conveyance amounted to a transfer within the meaning of the Act. Since the asset transferred was land and building, the deeming provision of section 50C was applicable for adopting the stamp valuation as full value of consideration.

Conclusion: The addition on account of long-term capital gains was sustained and the application of section 50C was upheld against the assessee.

Issue (ii): whether the assessee was entitled to substitute the fair market value as on 1.4.1981 in place of the original cost of acquisition.

Analysis: The assessment order had already allowed indexation on the original cost of acquisition while computing capital gains. In these circumstances, the plea for substituting the market value as on 1.4.1981 did not survive as an additional benefit.

Conclusion: The claim was rejected against the assessee.

Final Conclusion: The appeal failed on the substantive grounds and the assessment of capital gains remained undisturbed.

Ratio Decidendi: A registered sale deed conveying an interest in land and building constitutes transfer of a capital asset for purposes of capital gains, and section 50C applies where the transferred asset is land or building.

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