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2023 (5) TMI 708 - PATNA HIGH COURTTaxability of Capital gains - Year of taxability - Joint Development Agreement (JDA) - Effect of new subsection 5A u/s 45 added - retrospectivity OR prospectivity - whether sub-section (5A) of Section 45 of the Act; inserted by the Finance Act, 2017, with effect from 01.04.2018, apply retrospectively? - Provision inserted to eliminate an unintended consequence, visiting the assessee with a hardship, which was sought to be removed HELD THAT:- Since the amendment to Section 45 by insertion of a sub-section was expressly stated to be, with effect from the 1st day of April, 2018. There is no question of any discrimination between persons who entered into a JDA before and after the amendment, insofar as the JDA entered into by an individual or a Hindu undivided family, prior to 01.04.2018 being governed by the law on the subject as it existed at that point of time, i.e. on a conjoint reading of Section 2(47)(v) read with Sections 45 & 48. There is no discrimination among equals since the differentiation is made on the basis of date on which the JDA has been entered into, which is a natural consequence of an amendment brought into the Act by way of an insertion expressly stated to be prospective from a specific date i.e., 01.04.2018. Further, though there are different class of assessee under the Income Tax Act, they cannot be considered to be equal, merely for reason of their being assessed under that Act. In the present case, the amendment made effective from 01.04.2018 is expressly stated to be prospective from that date and there can be no intendment ferreted out since the above noted deficiencies are totally absent. We find no discrimination having been visited on individuals or Hindu undivided families, for whom there was a change made in the manner, or the previous year in which the computation of total income is made, which was effective only insofar as the agreements entered into after 01.04.2018. We find no reason to accept the contention raised of it’s retrospectivity and reject the argument of discrimination and the amendment having intended mitigation of hardship and removal of unintended consequences. The consequence that flow from the provisions in the absence of sub-section (5A) of Section 45 prior to 01.04.2018 cannot be obliterated by the subsequent amendment, which was expressly stated to be prospective. We reject the writ petitions making it clear that we have answered only the question of retrospectivity urged before us. We have not gone into the facts and the various contentions of the petitioners, regarding the JDA having not materialized, no consideration having been passed, the JDA itself having become unworkable and even some of the petitioners, companies and like legal entities having become defunct.
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