The transfer documents for my flat booking rights did not state a price, so the Assessing Officer says the consideration is not ascertainable and has substituted fair market value under section 50D. Is silence in the document enough for him to do that?
No. The Tribunal deleted the section 50D addition because, although the affidavits evidencing the transfer did not mention the consideration, the assessee produced copies of the transferees' accounts showing the amounts agreed, and the same amounts had been used to compute the capital gain declared in the return. Section 50D is engaged only where the consideration is genuinely not ascertainable or cannot be determined, and the authorities could not reach that conclusion without making any enquiry of the transferees.
Decided by the ITAT (Shri P.M. Jagtap, Vice-President and Shri A.T. Varkey, Judicial Member) on 2020-12-18, reported as ITA No. 316/KOL/2020; Assessment Year 2013-14 (ITAT Kolkata). It bears on section 50D, section 48, section 45 of the Income Tax Act 1961, in Capital Gains, Evidence & Burden of Proof and Assessment & Scrutiny matters.
This is the taxpayer side of section 50D and it fixes the provision's boundary. Section 50D is not a valuation provision and not an undervaluation provision — it is a gap-filler for the case where there is no ascertainable consideration at all. An officer who thinks the stated price is too low, or who simply finds no price recited in the instrument, has to do the work: ask the transferee, examine the accounts, and make a finding. Note the year: this was AY 2013-14. For unquoted shares transferred from AY 2018-19 the answer is now supplied by section 50CA, and for immovable property by section 50C or section 43CA, so the space in which section 50D operates has narrowed considerably.
Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere.
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The assessee company had booked flats in a project and transferred its rights in two of them before taking possession. The transfer was evidenced by affidavits made by the assessee, which did not recite the consideration. The Assessing Officer, finding no consideration stated in the documents, took the view that the consideration received or accruing was not ascertainable, invoked section 50D and substituted fair market value, making an addition which the CIT(Appeals) confirmed. Before the Tribunal the assessee produced copies of the accounts of the transferees showing the consideration agreed between the parties, and pointed out that those same amounts had been taken into account in computing the capital gain declared in the return of income.
Ground 1 was allowed and the section 50D addition was deleted. Notwithstanding that the affidavits did not mention the consideration, the copies of the transferees' accounts produced by the assessee showed the consideration agreed; there was no justification for the authorities to doubt or dispute that mutually agreed consideration, and they could not conclude that the consideration was not ascertainable or could not be determined without making any enquiry whatsoever with the transferees. The provisions of section 50D were therefore not applicable and the addition was not sustainable (paragraph 8). The appeal of the assessee was allowed.
The Tribunal treated the statutory precondition in section 50D as a question of fact to be established, not assumed. It rejected the Revenue's contention that no evidence of consideration had been produced, holding that the transferees' account copies were such evidence; it noted that the agreed consideration had been used by the assessee to compute the returned capital gain; and it held that the authorities below could not have arrived at the conclusion that the consideration was unascertainable without any enquiry with the transferees (paragraph 8).
we are of the view that the provisions of section 50D are not applicable in this case and the impugned addition made by the Assessing Officer and confirmed by the ld. CIT(Appeals) by invoking the said provision is not sustainable.
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Handle my notice → Ask a CA on WhatsAppNo. The Tribunal deleted the section 50D addition because, although the affidavits evidencing the transfer did not mention the consideration, the assessee produced copies of the transferees' accounts showing the amounts agreed, and the same amounts had been used to compute the capital gain declared in the return. Section 50D is engaged only where the consideration is genuinely not ascertainable or cannot be determined, and the authorities could not reach that conclusion without making any enquiry of the transferees. This was decided by the ITAT (Shri P.M. Jagtap, Vice-President and Shri A.T. Varkey, Judicial Member) and bears on section 50D, section 48, section 45 of the Income Tax Act 1961. It is reported as ITA No. 316/KOL/2020; Assessment Year 2013-14 (ITAT Kolkata). This is the taxpayer side of section 50D and it fixes the provision's boundary. Section 50D is not a valuation provision and not an undervaluation provision — it is a gap-filler for the case where there is no ascertainable consideration at all. An officer who thinks the stated price is too low, or who simply finds no price recited in the instrument, has to do the work: ask the transferee, examine the accounts, and make a finding. Note the year: this was AY 2013-14. For unquoted shares transferred from AY 2018-19 the answer is now supplied by section 50CA, and for immovable property by section 50C or section 43CA, so the space in which section 50D operates has narrowed considerably. If it applies to you, the first step is this: Produce the transferees' ledger accounts, bank statements and any correspondence fixing the price, even where the transfer instrument itself recites no consideration — that is exactly the material that defeated section 50D here.
The assessee company had booked flats in a project and transferred its rights in two of them before taking possession. The transfer was evidenced by affidavits made by the assessee, which did not recite the consideration. The Assessing Officer, finding no consideration stated in the documents, took the view that the consideration received or accruing was not ascertainable, invoked section 50D and substituted fair market value, making an addition which the CIT(Appeals) confirmed. Before the Tribunal the assessee produced copies of the accounts of the transferees showing the consideration agreed between the parties, and pointed out that those same amounts had been taken into account in computing the capital gain declared in the return of income. The matter was decided on 2020-12-18 by the ITAT (Shri P.M. Jagtap, Vice-President and Shri A.T. Varkey, Judicial Member). On those facts the ITAT held as follows. Ground 1 was allowed and the section 50D addition was deleted. Notwithstanding that the affidavits did not mention the consideration, the copies of the transferees' accounts produced by the assessee showed the consideration agreed; there was no justification for the authorities to doubt or dispute that mutually agreed consideration, and they could not conclude that the consideration was not ascertainable or could not be determined without making any enquiry whatsoever with the transferees. The provisions of section 50D were therefore not applicable and the addition was not sustainable (paragraph 8). The appeal of the assessee was allowed.
The Tribunal treated the statutory precondition in section 50D as a question of fact to be established, not assumed. It rejected the Revenue's contention that no evidence of consideration had been produced, holding that the transferees' account copies were such evidence; it noted that the agreed consideration had been used by the assessee to compute the returned capital gain; and it held that the authorities below could not have arrived at the conclusion that the consideration was unascertainable without any enquiry with the transferees (paragraph 8). In the words reproduced by the source cited on this page: "we are of the view that the provisions of section 50D are not applicable in this case and the impugned addition made by the Assessing Officer and confirmed by the ld. CIT(Appeals) by invoking the said provision is not sustainable."
It was decided by the ITAT on 2020-12-18 and is reported as ITA No. 316/KOL/2020; Assessment Year 2013-14 (ITAT Kolkata). Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere. A Tribunal decision binds the assessing officer and the Commissioner (Appeals) within that Tribunal's jurisdiction, and is persuasive before other benches. It is not binding on a High Court, and a contrary co-ordinate bench decision will be argued against you, so check whether the point has been taken the other way before you build a reply around it. On section 50D, section 48, section 45, the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It helps the taxpayer. Ground 1 was allowed and the section 50D addition was deleted. Notwithstanding that the affidavits did not mention the consideration, the copies of the transferees' accounts produced by the assessee showed the consideration agreed; there was no justification for the authorities to doubt or dispute that mutually agreed consideration, and they could not conclude that the consideration was not ascertainable or could not be determined without making any enquiry whatsoever with the transferees. The provisions of section 50D were therefore not applicable and the addition was not sustainable (paragraph 8). The appeal of the assessee was allowed. It arises in Capital Gains, Evidence & Burden of Proof and Assessment & Scrutiny matters, on section 50D, section 48, section 45 of the Income Tax Act 1961, and was decided by Shri P.M. Jagtap, Vice-President and Shri A.T. Varkey, Judicial Member. Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. Show that the same figure was used to compute the capital gain returned; consistency between the books, the return and the transferee's records is what the Tribunal relied on. Ask the Assessing Officer, on record, what enquiry he made of the transferees before concluding the consideration was unascertainable. The absence of any enquiry was decisive. Attack the substituted value separately: here the officer used online listing prices (Magic Bricks), which is not a statutory method of determination under section 50D. Check the year. If the asset is unquoted shares and the year is AY 2018-19 or later, argue that section 50CA and not section 50D is the applicable provision, with its own Rule 11UAA machinery.
Searched for later treatment; none was found. That is not the same as a source affirming it. No later decision citing this order has been found - no later Tribunal order, no Calcutta High Court appeal, nothing. The holding that section 50D has no application where the consideration is capable of being ascertained, here from the transferee's books, even though the transfer document is silent on price, rests on this order alone. Two things limit what that is worth. It is a Tribunal order and binds nobody outside the case. And the holding is conditional on a finding of fact: the assessee produced copies of the transferees' accounts showing the amounts agreed, and the same amounts had been used to compute the capital gain declared in the return. An assessee who cannot produce that material is in a different case, and so is one whose declared gain does not match it. What travels beyond the facts is the construction of the section and the burden it puts on the officer. Section 50D is engaged only where the consideration is genuinely not ascertainable or cannot be determined, and the authorities could not reach that conclusion without making any enquiry of the transferees. An officer who applies s.50D because the transfer document is silent, and who has made no enquiry at all, has not satisfied the section's own condition. For a transfer in a year governed by the Income-tax Act 2025 the successor of s.50D and of s.48 should be identified before the point is taken; that correspondence has not been established here. No source could be cited for that finding. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
WHAT THIS ENTRY RESTS ON, AND WHAT IT DOES NOT. The Tribunal's reasoning on section 50D is at paragraph 8, which has been read word for word; the bench composition, the appeal number, the assessment year and the disposal line have been confirmed separately. Nothing else in the order has been read in its own words. A CAUTION ABOUT THE FIGURES. The consideration figures reported for this matter - Rs.52,85,185 and Rs.48,59,000 - and the addition figure of Rs.34,75,731 have not been confirmed against the order's own text. They are reproduced here as reported and should be verified from the order before they are relied on in a computation or a submission. WHAT ELSE THE ORDER DECIDED IS NOT STATED HERE. There is a further ground on s.14A and s.115JB which was also decided. It has not been read in the Tribunal's own words and is therefore not stated on this page as a holding. If that ground matters to your matter, read the order; nothing here is authority on it. WHY THE POINT IS WORTH HAVING. Section 50D is a deeming provision and it is engaged only on a finding that the consideration received or accruing is not ascertainable or cannot be determined. The officer's difficulty in this case was that the affidavits evidencing the transfer did not mention a price - but a silent document is not the same as an unascertainable consideration, and the transferees' own books showed the amounts agreed. The step the authorities had not taken was the obvious one: an enquiry of the transferees. Where s.50D is invoked, the first question to put to the officer is what enquiry he made before concluding that the consideration could not be determined. ON WHERE SECTION 50D SITS. It is a deeming provision inside the capital gains machinery: where the consideration received or accruing as a result of a transfer is not ascertainable or cannot be determined, the fair market value of the asset on the date of transfer is deemed to be the full value of the consideration for s.48. It does not create a charge of its own, and it does not displace an ascertainable price. Section 45 charges the gain and s.48 computes it; s.50D only supplies a figure where none can be found. ON THE STANDARD OF PROOF THE ASSESSEE HAS TO MEET. It is the mirror of that. The material that succeeded here was documentary and it was consistent: copies of the transferees' accounts showing the amounts agreed, and a return computing the capital gain on those same amounts. An assessee whose return does not match the figures he produces invites the very finding s.50D needs. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
Ground 1 was allowed and the section 50D addition was deleted. Notwithstanding that the affidavits did not mention the consideration, the copies of the transferees' accounts produced by the assessee showed the consideration agreed; there was no justification for the authorities to doubt or dispute that mutually agreed consideration, and they could not conclude that the consideration was not ascertainable or could not be determined without making any enquiry whatsoever with the transferees. The provisions of section 50D were therefore not applicable and the addition was not sustainable (paragraph 8). The appeal of the assessee was allowed.
TaxSphere, “Trincas Vinimay (P) Ltd v ITO (ITAT Kolkata) — section 50D does not apply where the consideration can be ascertained, even if the transfer document is silent on price”, https://taxnotice.vittsphere.com/caselaw/case/trincas-vinimay-v-ito-50d-consideration-ascertainable-from-transferee-accounts/ (validity last checked 2026-09-08)
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