Section 50C addition requires verification of disputed property transactions and cancellation deeds before taxing capital gains.

Section 50C could not be applied to sustain a long-term capital gain addition without first verifying whether the impugned transactions were purchases or sales and whether the registered sale deeds were later cancelled. The record showed conflicting entries for the same properties at the same consideration, and the Assessing Officer's factual assumptions were not resolved on the available material. Because the cancellation deeds and supporting evidence were not on record, the correctness of the assessee's claim could not be determined. The matter was therefore remitted to the jurisdictional Assessing Officer for verification of the facts and fresh adjudication under the Act.

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Issues: (i) Whether the addition made towards long-term capital gain by applying section 50C on the alleged sale of immovable properties could be sustained without first verifying whether the transactions were purchases or sales and whether the sale deeds were subsequently cancelled.

Analysis: The assessment proceeded on conflicting factual assumptions, since the records reflected both purchase and sale entries for the same properties at the same consideration, while the Assessing Officer also considered but did not ultimately make an addition under section 56(2)(x). The material facts required verification, especially in view of the plea that the sale deeds had later been cancelled by registered cancellation deeds. As the cancellation documents and supporting evidence were not on record, and the correctness of the factual claim could not be determined on the existing material, the controversy could not be decided on merits at this stage.

Conclusion: The matter was set aside to the Jurisdictional Assessing Officer for verification of the correct facts and fresh adjudication under the Act.

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