A new section 43CA has been introduced by the Finance Act, 2013 (w.e.f. A.Y. 2014-15) which provides that in case of transfer of immovable property other than capital asset (including stock-in-trade), whereby if the consideration is less than the value adopted, assessed or assessable for the purpose of payment of stamp duty, such stamp duty value will be taken as the full value of consideration for the purpose of computing business income.

Further if there is a time gap between the date of agreement and the date of registration, the value for the purpose of the aforesaid comparison can be taken as the value assessable for stamp duty on the date of agreement, provided some part of the consideration has been paid on or before the date of agreement, otherwise than in cash.

Similar to Section 50C the assessee may represent before the Income Tax Officer that the valuation adopted by stamp duty authorities is higher than the fair market value of property on the date of transfer and that the Income Tax Officer may refer the matter of valuation to the Valuation Officer of the Income Tax Department itself.

The cost of acquisition depends upon the treatment of asset in the hands of transferee/purchaser. For a transferee for whom the immovable property is a capital asset, the stamp duty valuation of property would be considered as cost of acquisition at the time of computing capital gains during further sale of property, pursuant to section 49(4). However, for a transferee who treats the property as stock-in-trade, the actual payment made by him for the purchase of property and not the stamp value, will be considered as Cost of acquisition during further sale of the property.