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TMI Blog2024 (7) TMI 504X X X X Extracts X X X X X X X X Extracts X X X X ..... anking channel on the date of agreement, therefore, stamp duty value as on the date of agreement, was relevant in view of the amendment brought by the Finance Act, 2016 which is curative in nature and therefore, has retrospective effect and the Learned CIT (Appeal) has erred in confirming the addition to the extent of Rs. 99,400/- holding the amendment brought by Finance Act, 2016 to be prospective in nature, which is unsustainable, hence, the addition is absolutely illegal, arbitrary and unjustified. It is prayed that the addition of Rs. 99,400/- confirmed by the Learned CIT (Appeal) may kindly be deleted. 2. Without prejudice to the aforesaid ground, on the facts and in the circumstances of the case, the Learned CIT (Appeal) has erred in confirming the addition to the extent of Rs. 909,400/- disregarding the fact that the actual consideration of the property sold was Rs. 49,86,000/- and the value determined by the DVO is Rs. 50,85,400/-, as such, the value so determined being not more than 110% of the consideration received and therefore, as per Third proviso to Section 50C inserted by Finance Act, 2018, the consideration so received ought to have been deemed to be the full val ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee was again show caused and in response, a detailed submission was furnished by the assessee before the Ld. AO, stating that the consideration mentioned in the sale deed for Rs. 59,37,000/-, which is reflected in the AIR report also was adopted for stamp duty purpose only on which the sale was registered, however, full value of consideration was only Rs. 49,86,000/-, being the actual consideration paid. It was the submission of assessee before the Ld. AO that for sale of the subject land and agreement was executed on 31.03.2014 and an amount of Rs. 1.00 Lac through proper banking channel i.e., through NEFT / RTGS was made by the buyer of the land. Ld. AO further explained that the case of the assessee falls within the scope of first proviso to section 50C(1) of the Act. According to which, if the date of the agreement fixing the amount of consideration and the date of registration for transfer of property was not the same then the value adopted by stamp valuation authority on the date of agreement may be taken for the purpose of computation of full value of consideration. Such plea of the assessee could not find favour with the Ld. AO, who had while rejecting the contention o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conveyance. Section 54 of TP Act states that sale of immoveable property can be made only by a registered instrument and an agreement of sale is not a document of transfer and does not create any interest or charge on its subject matter. Hon'ble Apex Court dealt with this whether immovable property can be legally transferred or conveyed through a General Power of Attorney, Agreement to Sell and a Will? Before we embark upon this question, it is very essential to know as to why such kind of indirect sales came into existence. The most dominant reasons for such kind of Indirect Sales were to avoid prohibitions/ conditions regarding certain transfers (as some deeds of conveyance contain the clauses that the property can only be sold after 15 years from the date of construction of some building on the plot/property), to avoid payment of stamp duty and registration charges on deeds of conveyance, to avoid payment of capital gains on transfers, to invest black money etc. (b) The Hon'ble Apex Court also noted that such kind of Indirect Sales adversely affected the economy, civil society and law and order, Firstly, it enables large scale evasion of income tax, wealth tax, stam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the amendment by way of insertion of provisos brought by the Finance Act, 2016 is curative in nature, then, kindly consider the submission of the assessee that the value adopted for stamp duty purposes was far in excess than fair market of the capital asset and in such a case, the matter may kindly be referred to the Valuation officer as provided u/s 50C(2) is not relevant here. Through these amendments the assessee does not get relief since the amendment is introduced only with prospective effect from 1st April 2017. As such, the said provision is not applicable for A.Y.2015-16. In view of the above, I am of opinion that "full value of consideration" is the value of Rs. 59,37,000/- being the value adopted by the stamp duty authority as on the date of transfer which is 31/03/2015 and the same shall be adopted for the purpose of computing capital gain u/s 48. 4. Based on aforesaid observations, Ld. Assessing Officer had made an addition of Rs. 9,51,000/- and the total income of the assessee calculated at Rs. 53,74,530/-. 5. Aggrieved from the aforesaid addition by the Ld. AO, assessee preferred an appeal before the Ld. CIT(A), who had partly accepted the contentions of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... further that the payment of Rs. 1.00 lac which was appeared in the agreement is also part of the consideration shown in the registered sale deed, Ld. AR drew our attention to page no. 22 of the assessee's PB consisting of registered sale deed, wherein at page no. 3 displaying the details of sale consideration received by the assessee from the buyer was found to be consisting of the aforesaid NEFT / RTGS payment dated 31.03.2014 for Rs. 1 Lac. Therefore, it is undisputedly established that there was an agreement to sale towards which an amount of Rs. 1.00 Lac was paid as advanced by the buyer on 31.03.2014. With such submission, it was the contention of ld. AR that the value adopted for stamp duty purpose as on the date agreement i.e., Rs. 49,86,000/- should be considered as actual consideration for calculating capital gain in the case of the assessee. Under such facts and circumstances, it was the submission that, there was no case for the revenue authorities to make an addition in light of first proviso to section 50C. It is the submission that the Ld. CIT(A) had not accepted contention of the assessee on the ground that the amendment was introduced by the Finance Act, 2016 by ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with effect from Assessment Year 2005-06. It was pointed out that the purpose of the amendment made by the Finance Act 2010 is to solve the anomalies with the instrument of section 40(a)(ia) of the Act, caused to the bona fide taxpayer. It was further held that the amendment even if not given any operation retrospectively, may not materially to be of consequence to the Revenue when the tax rates are stable and uniform or in cases of big assesses having substantial turnover and equally huge expenses and necessary cushion to absorb the effect; however a marginal and medium tax payer who work at low gross product rate and when expenditure becomes subject matter of an order under section 40(a)(ia) is substantial, can suffer severe adverse consequence if the amendment made in 2010 is not given retrospective operation i.e., from the date of substitution of the provision. Thus, the amendment made by the Finance Act 2010 being curative in nature was held to be retrospective in operation. In the above decision, the Hon'ble Supreme Court took note of the fact that the statutory amendment was being made to remove undue hardship to the assessee or held to be retrospective. 12. The Hon'ble Su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have considered the rival submissions, perused the material available on record and case laws relied upon by the Ld. AR. In present case, assessee's plea that amendment in section 50C(1), wherein first proviso was introduced by the Finance Act, 2016 stating that the same is vacated from 01.04.2017 was interpreted by the Hon'ble Madras High Court (supra), wherein it has categorically observed that "We have no hesitation to hold on proviso to section 50C(1) of the Act should be taken to be retrospective effect from the date with the proviso exists". Such analogy has been drawn by the Hon'ble Madras High Court while dealing with the case of an assessee for the AY 2014-15, which pertains to an AY falling prior to the date of amendment i.e., from 01.04.2017. This issue was further dealt with by the coordinate benches of this tribunal, wherein their finding on the issues reads as under: Assistant Commissioner of Income Tax vs. Thomson Press (India) Ltd. (2023) 202 ITD 149 (Del) in ITA No. 9342/Del/2019, AY 2014-15; The above proviso was inserted by the Finance Act, 2016 w.e.f. 01.04.2017. Therefore, the question that has to be decided is as to whether the above amendment is prospecti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... finding of the lower authorities is not proper. Accordingly, we hold that proviso to section 50C(1) by the Finance Act, 2016 is retrospective and also the assessee proved that the 2nd proviso to section 50C(1) is satisfied since the assessee has paid a part of sale consideration on the date of such MoU dated 8.4.2013. In view of this, we hold that the guidance value has to be computed as prevailing on the date of MoU dated 8.4.2013. 12. We, thus, in terms of aforesaid decision, respectfully following the same, are of the considered view that first proviso to section 50C(1) deemed to be retrospective in nature and, therefore, benefit of the same shall be available to the assessee for the AY 2015-16 i.e., in the present case. Accordingly, the decision of Ld. CIT(A) accepting the contention of Ld. AO that the amendment introduced in section 50C(1) in Finance Act, 2016 is effective prospectively is found to be contrary to the analogy drawn by the Hon'ble Madras High Court in the case of Commissioner of Income Tax Vs. Vummudi Amarendran (supra), therefore, we are unable to concur with the same, accordingly the order of Ld. CIT(A) is liable to be set aside. Further, we may herein observ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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