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Issues: Whether the proviso to section 50C(1) of the Income-tax Act, 1961, which permits adoption of the stamp valuation as on the date of agreement where the agreement date and registration date differ, applies retrospectively and whether the valuation had to be taken with reference to the date of the memorandum of understanding.
Analysis: The assessee had entered into a prior arrangement for transfer and had made part payment before the later registered exchange deed. The dispute turned on whether the subsequently inserted proviso to section 50C(1) was merely clarificatory and curative, intended to remove hardship where consideration is fixed earlier and registration occurs later. The Tribunal accepted that the proviso addresses such hardship and follows the legal position that the agreement date can be relevant for stamp valuation when the contractual arrangement is genuine and part consideration has already been paid. It also accepted that the memorandum of understanding reflected an operative arrangement and that the conditions for applying the proviso were satisfied on the facts.
Conclusion: The proviso to section 50C(1) was held to be retrospective in operation, and the stamp valuation was directed to be taken as on the date of the memorandum of understanding. The addition was deleted and the appeal was allowed in favour of the assessee.
Ratio Decidendi: A curative proviso inserted to remove hardship in valuation of transferred immovable property applies retrospectively, and where the agreement fixing consideration precedes registration and part consideration has been paid through prescribed banking modes, the stamp valuation on the agreement date governs computation of capital gains.
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