Valuation under s.50C cannot be applied during return processing under s.143(1); processing enhancement deleted and appeal allowed.

An adjustment under section 50C cannot be effected at the processing stage under section 143(1) because section 143(1) constitutes a self-contained code limiting actions at processing; applying section 50C during processing would deprive the assessee of the proviso remedy of reference to a Valuation Officer and upset the statutory balance of remedies between revenue and assessee, therefore the processing-stage enhancement of capital gains was deleted and the appeal allowed in favour of the assessee.

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Issues: Whether an adjustment increasing capital gains by applying section 50C can be made at the processing stage under section 143(1) of the Income-tax Act, 1961.

Analysis: Section 143(1) constitutes a self-contained code specifying the limited scope of actions permissible at the processing stage of a return. Section 50C provides a separate mechanism for valuation-related enhancement of capital gains, including a proviso allowing reference to a Valuation Officer to determine true value. A combined reading shows that the valuation and enhancement mechanism in section 50C cannot be mechanically applied within the constrained processing exercise under section 143(1), because the remedy of reference to a Valuation Officer would be unavailable to the assessee if enhancement were effected at the processing stage. Permitting section 50C adjustments during processing would upset the statutory balance of remedies between the revenue and the assessee and exceed the permissible scope of section 143(1).

Conclusion: Adjustment under section 50C cannot be made at the processing stage under section 143(1); the enhancement of capital gains made at processing is to be deleted and the appeal is allowed in favour of the assessee.

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