Section 50C not applicable to unexplained investment in property; addition deleted where assessment rested on that deeming fiction.

Section 50C cannot be invoked to treat investment in immovable property as unexplained, because the deeming fiction applies only to transfer of land or building for determining consideration. Where the addition under section 144 rested solely on this inapplicable provision, the foundation for the addition failed and could not be sustained. The impugned addition was deleted, and the assessee succeeded on the issue.

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Issues: Whether section 50C of the Income-tax Act, 1961 could be invoked to treat investment in immovable property as unexplained and sustain the addition made under section 144 of the Income-tax Act, 1961.

Analysis: The assessment and appellate authorities had applied section 50C while making an addition for alleged unexplained investment in immovable property. Section 50C is a deeming provision applicable to the transfer of land or building for the purpose of determining consideration, and not to an investment made in acquiring property. Since the addition was founded solely on that inapplicable provision, the basis of the addition could not be sustained.

Conclusion: The addition was deleted and the assessee succeeded on the issue.

Final Conclusion: The appeal was allowed as the impugned addition based on section 50C could not be sustained in a case of alleged unexplained investment.

Ratio Decidendi: Section 50C cannot be applied to an investment in immovable property and is confined to transfer of land or building for valuation of consideration.

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