Capital gains under deemed consideration rules require evidence of extra receipt, not just a higher fair market value.

Section 52(2) of the Income-tax Act, 1961 applies only where there is material showing understatement of sale consideration or receipt of additional consideration beyond the amount recorded in the transfer document. In the absence of evidence of extra receipt, the deeming fiction cannot be invoked merely because the fair market value is alleged to exceed the declared consideration. The Tribunal therefore held that the consideration stated in the sale deed had to be adopted for computing capital gains, and the assessee's computation based on the declared sale price was sustained.

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Issues: Whether the deeming provisions for capital gains under section 52(2) of the Income-tax Act, 1961 could be invoked when there was no material to show that the assessee received any consideration over and above the amount recorded in the sale deed.

Analysis: The assessee had sold her share in the property for the consideration stated in the document of sale. The appellate authority found no evidence of any extra receipt. The Tribunal followed the binding rulings of the Madras High Court holding that, in the absence of material showing understatement or receipt of additional consideration, section 52(2) could not be applied merely because the fair market value was said to exceed the declared consideration.

Conclusion: Section 52(2) was not attracted, and the sale consideration declared in the sale deed had to be adopted for computing capital gains.

Final Conclusion: The Revenue's challenge to the appellate order failed, and the assessee's computation based on the declared sale consideration was sustained.

Ratio Decidendi: Section 52(2) of the Income-tax Act, 1961 can be applied only where there is material to show receipt of consideration beyond that recorded in the transfer document or a comparable understatement warranting the deeming fiction.

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