Representative capacity in land transactions prevented capital gains tax and section 50C valuation from applying.

Where an assessee merely acted in a representative capacity under a series of agreements and GPA arrangements, and later cancellation and settlement showed that the original co-owners remained the real recipients of consideration, no transfer of ownership by the assessee was established for capital gains purposes. On those facts, the land could not be treated as transferred by the assessee as owner, so the deeming valuation under section 50C was not attracted. The capital gains addition was therefore unsustainable, the revenue's appeal failed, and the deletion of the addition was upheld.

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Issues: Whether the assessee acquired ownership or effected a transfer of the subject land so as to attract long-term capital gains tax and the deeming fiction under section 50C of the Income-tax Act, 1961.

Analysis: The series of agreements, GPA arrangements and later cancellation showed that the assessee acted throughout in a representative capacity for the original co-owners and did not obtain full ownership title. The consideration under the relevant arrangements was not fully crystallised in his hands, and the later settlement and receipts were ultimately with the original owners. On those facts, the land could not be treated as transferred by the assessee as owner, and the deeming valuation under section 50C could not be invoked against him.

Conclusion: The addition towards capital gains was not sustainable and the assessee succeeded on the issue.

Final Conclusion: The revenue's appeal failed, the order deleting the capital gains addition was sustained, and the assessee's cross-objection became infructuous.

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