Section 50C agreement-date valuation proviso treated as curative and retrospective, giving taxpayers relief from stamp duty hardship.

The proviso inserted in Section 50C(1) of the Income-tax Act, which permits adoption of the stamp valuation on the date of agreement where the agreement and registration dates differ, was treated as curative and intended to remove an unintended hardship in capital gains computation. The written sale agreement, banking-channel advance, and undisputed genuineness of the transaction supported application of that relief. Because the amendment rationalised valuation in such cases, it was held to operate retrospectively, and the assessee was entitled to its benefit rather than being confined to the higher stamp value on the registration date.

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Issues: Whether the proviso inserted in Section 50C(1) of the Income-tax Act, 1961, which permits adoption of the stamp valuation on the date of agreement where the agreement date and registration date differ, is retrospective and applicable to the assessment year in question.

Analysis: The assessee had entered into a written agreement for sale, received a substantial advance through banking channels, and the genuineness of the transaction was not doubted. The assessment was, however, made by adopting the higher stamp guideline value on the date of registration. The proviso to Section 50C(1) was introduced to mitigate hardship in cases where consideration is fixed by agreement before registration, and the legislative material showed that it was meant to rationalise the computation of capital gains and remove an unintended anomaly. The amendment was therefore treated as curative in nature. The reliance on general prospectivity principles and the CBDT circular did not displace the conclusion that the proviso supplied relief from hardship and ought to operate from the date the provision came into force.

Conclusion: The proviso to Section 50C(1) was held to be retrospective in effect, and the assessee was entitled to its benefit.

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