A registered sale deed carries a strong presumption of validity and genuineness, and its registration is a solemn statutory act that confers a high degree of sanctity on the document, a tax appellate authority has ruled.

Setting aside an assessment order, the appellate body held that a registered sale deed cannot be lightly disregarded by tax authorities while examining claims related to property transactions and capital gains exemptions. The authority observed that once a document is duly registered in accordance with law, it must be presumed to be genuine unless there is clear and cogent evidence to the contrary.

The case arose from an assessment in which the tax officer refused to accept a registered sale deed as proof of purchase of a residential flat and consequently denied exemption claimed on long-term capital gains arising from the sale of another property and reinvestment in a residential house. The officer had treated part of the transaction with suspicion and made additions to income.

In appeal, the adjudicating authority noted that the taxpayer had sold a residential property through a properly executed and registered sale deed for valuable consideration. The consideration was received partly in cash and partly through recognised banking channels. The appellate authority found that the taxpayer had produced the best possible evidence available under law to establish the genuineness of the sale and subsequent purchase.

Criticising the assessment order, the authority held that the tax officer had acted without proper basis, relying on irrelevant material and conjectures rather than evidence. It observed that the conclusions drawn were illogical, speculative, and unsustainable in law, and that the additions were made in a high-handed manner.

Allowing the appeal, the authority ruled that registered documents enjoy a high evidentiary value and that tax authorities cannot disregard them merely on suspicion. It reaffirmed that unless fraud, suppression, or fabrication is proved with material evidence, a registered sale deed must be accepted as valid proof of sale or purchase for the purpose of claiming deductions and exemptions under tax law.

The ruling reinforces the legal principle that registration imparts authenticity and credibility to property transactions, providing protection to taxpayers against arbitrary denial of legitimate tax benefits