Cost of acquisition

As per Atul G. Puranik Vs. ITO (ITAT Mumbai) the market value on the date of acuisition of the land acquired  is considered as the cost of acquisiton. The tribunal held that once a particular amount is considered as full value of consideration ( since transfer includes exchange u/s 2(47) ) at the time of its purchase, the same shall automatically become the cost of acquisition at the time when such capital asset is subsequently transferred;

Thank you sir, Please give one more citation if available with you because above citation is avaiable with me.

Please illustrate with the following details:

Proerty   Cost puted in agreement by parties    cost as per ready reconer (i.e. Stamp duty valuation)  

"A"            Rs.100/-                                                         Rs.95/-

"B"            Rs. 105/-                                                        Rs.125 /-

In above transction consideration shows in agreement is Rs.0/- but stamp duty is paid on higher value of property i.e.on Property "B"Rs. 125/- as the property acquired by way of exchange deed and date of execution is before 1st Oct 2009. What is gain or loss (it may be short term or long term it does not matter) if property "B" will be sold for Rs 110/- .

EXCHANGE is a TRANSFER, and the Fair Market Value shall be considered as the Cost Of Acqusition for the purpose of transfer of any immovable property without adequate consideration.

And as per Sec 50C, where the sales consideration recieved or accruing on transfer of a capital asset, being land or building or both is less than the value assesed by the stamp valuation authority for the purpose of payment of stamp duty, the value so assesed shall deemed to be the sale consideration.

As per your above mentioned example...

In case of "A" the FMV i.e. Rs 100 shall be taken into consideration.

In case of "B" the Stamp Duty Valuation i.e. Rs 125 shall be taken into consideration.

         And if the "B" is sold for Rs 110 then, the FVC is Rs 110 and the Cost Of Acquisition is Rs 125 for this purpose and capital loss will arise.

If the "B" is sold for Rs 110 then, the FVC will be Rs. 125 under section 50C (assuming there is no change in valuation for stamp duty purpose) 

Thanks to both of you.

Can deeming fiction of 50 C considered for further tranction ?Please quote another equivalent citation if possible.

Yes the Section 50C will always be considered for every further transaction in the same manner as specified above...