Ascertainable share sale consideration cannot be replaced by fair market value under section 50D for capital gains computation.

Where the transfer consideration for unlisted shares is ascertainable from the transaction documents, section 50D cannot be used to substitute the actual sale price with fair market value, because section 48 requires capital gains to be computed on the real consideration received or accruing on transfer. The assessee had sold the shares in an identifiable commercial transaction at negotiated prices between unrelated parties, and the record did not show any indeterminacy in consideration or any statutory basis for deeming valuation. The later introduction of section 50CA did not apply to the relevant year, so the addition based on fair market value was deleted.

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Issues: Whether the addition made by substituting the actual sale consideration of unlisted shares with fair market value under section 50D was sustainable when the consideration was ascertainable and the shares were sold under an identifiable commercial transaction.

Analysis: Section 48 requires capital gains to be computed on the full value of consideration received or accruing on transfer. Section 50D applies only where such consideration is not ascertainable or cannot be determined, so that the machinery for computation otherwise fails. On the facts, the share sale consideration was identifiable from the transaction documents and was actually received at negotiated prices between unrelated parties. The record did not show that the consideration was indeterminable or that there was any legal basis to replace the stated consideration with a notional fair market value. The subsequent introduction of section 50CA could not govern the year in question.

Conclusion: The substitution of the actual sale price by fair market value under section 50D was not justified, and the addition on account of capital gains was deleted in favour of the assessee.

Ratio Decidendi: Where the transfer consideration is ascertainable, section 50D cannot be invoked to replace the actual consideration with fair market value, and capital gains must be computed under section 48 on the basis of the real sale consideration unless a specific statutory deeming provision applies.

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