Capital gains valuation under Section 50C: probate guideline value prevailed over stamp valuation for recomputation.

In computing capital gains under Section 50C of the Income-tax Act, the Court held that the guideline value fixed in probate proceedings had to be adopted on the facts of the case, rather than the higher stamp valuation used by the Assessing Officer. Relying on the co-owner's case and an earlier decision of the same Court, it treated the relevant guideline value as the correct basis for working out capital gains as on the specified date. The lower orders were therefore set aside, and the Assessing Officer was directed to recompute the capital gains after giving the assessee a reasonable opportunity.

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Issues: Whether, for computation of capital gains under Section 50C of the Income-tax Act, 1961, the guideline value fixed in the probate proceedings should prevail over the stamp valuation adopted by the Assessing Officer.

Analysis: The property had been valued in probate proceedings and the Assessing Officer nevertheless adopted the higher stamp valuation for computing capital gains. The appellate authorities had upheld that approach. The Court followed the co-owner's case and the earlier decision of this Court, holding that the correct legal position required adoption of the guideline value as on the relevant date for working out capital gains in the facts of the case.

Conclusion: The issue was answered in favour of the assessee. The lower orders were set aside and the Assessing Officer was directed to adopt the guideline value as on 03.10.2006 and recompute the capital gains after giving reasonable opportunity.

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