Section 50C cannot override statutory transfer restrictions where land remained subject to the Urban Land Ceiling regime.

Section 50C could not be applied mechanically where the transferred land remained subject to the Urban Land Ceiling Act and the sale deeds were executed before that regime was repealed. Because the statutory restrictions materially affected transferability and marketability, the stamp duty or SRO value was not a reliable substitute for the actual consideration. On those facts, adoption of the stamp valuation as the full value of consideration for capital gains computation was unsustainable, and the position favoured the assessee.

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Issues: Whether section 50C could be invoked by adopting the stamp duty / SRO value as the full value of consideration when the transferred land was subject to proceedings under the Urban Land Ceiling Act and the sale deeds were executed before the repeal/abolition of that regime.

Analysis: The land in question was found to have remained subject to the Urban Land Ceiling Act at the time of the sale transactions. The sale deeds were executed before the repeal of that Act, and the record showed that the property carried statutory restrictions affecting its transferability and marketability. In such circumstances, the stamp duty valuation could not be treated as the true sale consideration for computing capital gains under section 50C.

Conclusion: Section 50C was not applicable on these facts, and the adoption of the SRO value as sale consideration was unsustainable; the finding was in favour of the assessee.

Ratio Decidendi: Where a property is subject to statutory restrictions that materially affect its transfer and the sale occurs while those restrictions remain in force, the stamp duty value cannot be mechanically substituted as the full value of consideration under section 50C.

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