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TMI Blog2021 (10) TMI 1095X X X X Extracts X X X X X X X X Extracts X X X X ..... emption u/s.54EC of the Act in the facts and circumstances of the instant case. 3. We have heard rival submissions and perused the materials available on record. We find that assessee filed her return of income on 10/07/2014 declaring total income of Rs. 2,02,150/-. During the relevant previous year, the assessee sold a residential house property located at Wadala, Mumbai-31 for a consideration of Rs. 58,50,000/-. The market value of the property as per the stamp valuation authority was Rs. 61,16,000/-. In the computation of capital gain, the assessee took the sale consideration as Rs. 58,50,000/-. In the course of the assessment proceedings, the assessee was called upon to show cause why the provisions of Section 50C could not be invoked. The assessee did not respond to the said notice. Eventually, the ld AO considered the sale consideration at Rs. 60,16,000/- as per the provisions of Section 50C of the Act. 3.1. During the course of first appellate proceedings, the assessee pointed out that the difference between the value adopted by the stamp duty authority and the sale consideration declared by her was only Rs. 2,66,000/- (Rs. 61,16,000 - Rs. 58,50,000) which works out to 4.5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (1) should not come into play, it was an "unintended consequence" of Section 50(1) that even in such bonafide situations, this provision, which is inherently in the nature of an anti-avoidance provision, is invoked. Once this situation is sought to be addressed, as is the settled legal position- as we will see a little later in our analysis, this situation needs to be addressed in entirety for the entire period in which such legal provisions had effect, and not for a specific time period only. There is no good reason for holding the curative amendment to be only as prospective in effect. Dealing with a somewhat materially identical situation in the case of Rajeev Kumar Agarwal v. Addl. CIT [2014] 45 taxmann.com 555/149 ITD 363 (Agra) wherein a coordinate bench was dealing with the question whether insertion of a proviso to Section 40(a)(i) to cure intended consequence could have retrospective effect, even though not specifically provided for, and speaking through one of us (i.e. the Vice President), the coordinate bench had, after a detailed analysis of the legal position, observed that, "Now that the legislature has been compassionate enough to cure these shortcomings of provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt in a sale deed. As noted by the CBDT, while explaining the justification for insertion of section 50C, "(t)he Finance Act, 2002, has inserted a new section 50C in the Income-tax Act to make a special provision for determining the full value of consideration in cases of transfer of immovable property". Section 50C, thus, on a conceptual note, is a provision to address capital gains tax evasion on account of understatement of the consideration. Of course, the law provides, under section 50C(2), that wherever an assessee claims that the actual market rate is less than the stamp duty valuation, he can have the matter referred to a Departmental Valuation Officer for the ascertainment of the market value, but then it is a cumbersome procedure and, at the end of the day, every valuation, whether by the departmental valuation officer or under the stamp duty valuation notification, is an estimate, and there can always be bonafide variations, though to a certain limited extent, in these estimations. Unless, therefore, some kind of a tolerance band or a safe harbour provision, in respect of such bonafide variations, is implicit in the scheme of law, the assessees are bound to face undue h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0C(1) is in the nature of a remedial measure to address a bonafide situation where there is little justification for invoking an anti-avoidance provision. Similarly, so far as enhancement of tolerance band to 10% by the Finance Act 2020, is concerned, as noted in the CBDT circular itself, it was done in response to the representations of the stakeholders for enhancement in the tolerance band. Once the Government acknowledged this genuine hardship to the taxpayer and addressed the issue by a suitable amendment in law, the next question was what should be a fair tolerance band for variations in these values. As a responsive Government, which is truly the hallmark of the present Government, even though the initial tolerance band level was taken at 5%, in response to the representations by the stakeholders, this tolerance band, or safe harbour provision, was increased to 10%. There is no particular reason to justify any particular time frame for implementing this enhancement of tolerance band or safe harbour provision. The reasons assigned by the CBDT, i.e., "the variation between stamp duty value and actual consideration received can occur in respect of similar properties in the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... justice, and such an approach, as is prayed for, is an antithesis of the principle of "equality before the law," which is one of our most cherished constitutional values. Our judicial functioning has to be even-handed, transparent, and predictable, and what we decide for one litigant must hold good for all other similarly placed litigants as well. We, therefore, decline to entertain this plea of the assessee. 9. We have noted that as against the stated consideration of Rs. 75,00,000, the stamp duty valuation of the property is Rs. 79,91,500. The difference is just Rs. 4,91,500, which is about 6.55% of the stated sale consideration. As the difference between the stated consideration vis-à-vis the stamp duty valuation is admittedly less than 10% of the stated consideration in this case, and in the light of the above discussions, we are of the considered view that section 50C will have no application in the matter. The enhancement in capital gain computation, as made by the Assessing Officer, thus stands disapproved. The assessee gets the relief accordingly. 4.1. Respectfully following the same, we direct the ld. AO to consider only Rs. 58,50,000/- as sale consideration whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e-closed his fixed deposits held in Corporation Bank and had transferred the maturity proceeds thereon to Abhyudaya Bank on 11/10/2013 itself. This very clearly proves the intention of the assessee to make the investment in NHAI bonds well before the due date prescribed in the statute. Infact, on the date of issuance of cheque for Rs. 50,00,000/- i.e. on 24/10/2013, the assessee had bank balance of Rs. 50,08,118.97 which would enable the cheque to get easily encashed for Rs. 50,00,000/-. The primary fact of date of handing over of cheque together with the application form is duly supported by an affidavit filed by the sub-broker Shri Gobind M Vaswani who had categorically affirmed that he has collected the application form together with the cheque from the assessee on 24/10/2013 and had indeed handed over the same to authorised agent i.e. M/s. Karvy Stock Broking Ltd., on 24/10/2013 itself. The contents of this affidavit has not been controverted by the revenue by bringing in contrary evidences thereon. The law is very well settled that in the event of an affidavit not tested by the department in the manner known to law, then the contents of the said affidavit is to be construed as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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