Section 50C cannot apply to a later conveyance where property rights had already transferred under earlier agreements.

Where rights in immovable property had already passed under earlier agreements and the possession and beneficial interest stood transferred long before the later conveyance, a subsequent deed executed to complete statutory or contractual formalities did not amount to a fresh transfer for section 50C purposes. The valuation adopted for stamp duty could not be used to recast capital gains on that later conveyance; any taxability, if applicable, had to relate to the actual consideration connected with the earlier transfer. The section 50C addition was therefore unsustainable and the assessee's relief was upheld.

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Issues: Whether the addition towards capital gains by invoking section 50C of the Income-tax Act, 1961 was justified when the underlying rights in the property had already been transferred in an earlier year and only a subsequent conveyance was executed.

Analysis: The property had been acquired and dealt with under earlier agreements, the purchasers had formed a society, and the conveyance obligation arose from the earlier arrangement and the statutory duties under the Maharashtra Ownership Flats Act, 1963. The factual material showed that the principal transfer had already taken place in 1987, and the possession and rights had stood transferred much earlier. In these circumstances, the later execution of the conveyance could not be treated as a fresh transfer attracting section 50C. The taxability, if any, could arise only on the actual amount received in connection with the earlier transfer, not on the stamp/valuation-based figure adopted by the Assessing Officer.

Conclusion: The section 50C addition was not sustainable, and the relief granted by the first appellate authority was upheld.

Final Conclusion: The Revenue's challenge to the capital gains computation failed, and the assessee obtained relief on the substantive tax issue.

Ratio Decidendi: Where the substantive transfer of rights in immovable property has already occurred under earlier agreements and statutory obligations, a later conveyance deed does not constitute a fresh transfer for the purpose of section 50C of the Income-tax Act, 1961.

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