Section 52(2) did not apply where evidence failed to show any consideration beyond the declared sale price.

Section 52(2) of the Income-tax Act was held inapplicable because the material did not show that any consideration beyond the stated sale price had passed between the parties. The Tribunal noted that the Income-tax Officer's estimate of fair market value, standing alone, was insufficient to support an addition to capital gains. On the facts, the property having been sold for the declared amount, the attempted substitution of a higher market valuation could not justify the tax addition, and the Revenue's challenge failed.

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Issues: Whether section 52(2) of the Income-tax Act, 1961 was attracted so as to justify addition of capital gains on the footing that the property had been sold for less than its fair market value.

Analysis: The property was sold for Rs. 1,40,000 and the Income-tax Officer applied section 52(2) after estimating the market value at Rs. 2 lakhs. The Tribunal noted that the question had to be governed by the view earlier accepted by it in preference to the contrary view of the Kerala High Court. On the facts, the material did not establish that anything more than the stated consideration had passed between the parties, and the valuation adopted by the Income-tax Officer could not by itself sustain the addition.

Conclusion: Section 52(2) was not attracted. The deletion of the capital gains addition was and the appeal by the Revenue failed.

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