After introduction of new provisions of sec. 56(2) for inadequate consideration, sec. 50C has become irrelevant as it amounts to double taxation. Same amount is taxed in the hands of seller and purchaser. Further, it is taxed in the hands of the purchaser as inadequate consideration u/s 56(2), then when the said property is sold by him then whether the amount on which he pays tax is allowable as cost of acquisition? if So under which section? I hope the legislation will dwell upon these issues before finalising the enactment of the proposed Finance BIll.
Please consider the provisions of Section 49(4) of the Income-tax Act, 1961 inserted by Finance (No. 2) Act, 2009, which provides that where the capital gain arises from the transfer of a property, the value of which has been subject to income-tax under clause (vii) of sub-section (2) of section 56, the cost of acquisition of such property shall be deemed to be the value which has been taken into account for the purposes of the said clause (vii).
Hope this helps / clarifies!
Many Thanks Devangji, for enlightening us on this very important provision which escaped my attention.
If any amount was taxed either u/s 56(2)(vii) or u/s 56(2)(viia) , cost of acquisition will accordingly /consequentially be adjusted as per the express provisions of section49(4) of the I.T.Act, 1961. That is the reason why no further amendment was considered necessary.