Section 50C deeming rule for property transfers: stamp valuation prevails over declared consideration and approved valuer reports.

Section 50C operates as a special deeming rule for capital gains computation in immovable property transfers: where declared sale consideration is lower than the stamp valuation, the stamp value is treated as the full value of consideration under section 48. If the assessee objects, the AO may seek a DVO valuation under section 50C(2); however, where that valuation exceeds the stamp value, section 50C(3) requires adoption of the stamp valuation. An approved valuer's report does not override this statutory mechanism, and the AO has no discretion to ignore the stamp value where the legal conditions are met. The addition based on stamp valuation was therefore sustained.

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Issues: Whether, on a transfer of immovable property where the declared sale consideration was lower than the stamp valuation, the AO was bound to adopt the stamp duty value under section 50C and whether the addition made on that basis was sustainable.

Analysis: The provision was held to be a special deeming rule for computation of capital gains in real estate transfers. Where the declared consideration is less than the value adopted by the stamp valuation authority, that value is deemed to be the full value of consideration for section 48. If the assessee objects, the AO may refer valuation to the DVO under section 50C(2), but where the DVO's value is higher than the stamp value, section 50C(3) requires adoption of the stamp valuation. The Tribunal further held that the approved valuer's report does not displace the statutory mechanism, that the AO had no wider discretion to ignore the stamp valuation, and that the objections raised on facts did not show any infirmity in the valuation adopted.

Conclusion: The addition based on the stamp valuation was upheld and the assessee's challenge failed.

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