The Finance Act, 2002 had, with effect from the A.Y. 2003-2004 inserted a new Section 50C in the Income Tax Act, 1961, to make a special provision for determining the full value of consideration in cases of transfer of immovable property. This provided that where the consideration declared to be received or accruing as a result of the transfer of land or building or both is less than the value adopted or assessed by any authority of the State Government for the purpose of payment of stamp duty in respect of such transfer, the value so adopted or assessed would be deemed to be the full value of the consideration, and the capital gains would be computed accordingly under Section 48 of the I.T. Act. It was further provided that where the assessee claims that the value adopted or assessed for stamp duty purposes exceeds the fair market value of the property as on the date of transfer and he has not disputed the value so adopted or assessed in any appeal or revision or reference before any authority or Court, the Assessing Officer may refer the valuation of the relevant asset to a Valuation Officer in accordance with Section 55A of the Income Tax Act. If the fair market value determined by the Valuation Officer is less than the value adopted for stamp duty purposes, the Assessing Officer may take such fair market value to be the full value of consideration. However, if the fair market determined by the Valuation Officer is more than the value adopted or assessed for stamp duty purposes, the Assessing Officer would not adopt such fair market value and would take the full value of consideration to be the value adopted or assessed for stamp duty purposes. It was also provided that if the value adopted or assessed for stamp duty purposes is revised in any appeal, revision or reference, the assessment made would be amended to recompute the capital gains by taking the revised value as the full value of consideration. |
