Retrospective section 50C proviso applies where agreement predates registration and consideration was partly received before transfer.

The proviso to section 50C(1) was treated as curative and therefore retrospective where an agreement fixing consideration preceded registration, the arrangement was acted upon, and part consideration had been received by the prescribed modes before the registered conveyance. In those circumstances, the stamp duty value had to be taken with reference to the date of the memorandum of understanding rather than the later registration date for capital gains computation, and the addition was deleted.

---

---

Issues: Whether the proviso to section 50C(1) of the Income-tax Act, 1961 is retrospective and whether the stamp duty value prevailing on the date of the memorandum of understanding had to be adopted for computation of capital gains.

Analysis: The assessee had entered into a joint development arrangement followed by a memorandum of understanding under which the property exchange arrangement was acted upon and part of the agreed consideration had already been received before the registered exchange deed. The proviso to section 50C(1) was introduced to remove hardship where the agreement fixing consideration and the date of registration are different. On the facts, the conditions for applying the proviso were satisfied, and the amendment was treated as curative in nature and therefore applicable to the relevant assessment year. The stamp duty value was therefore required to be taken with reference to the date of the agreement and not the later date of registration.

Conclusion: The proviso to section 50C(1) applied retrospectively, and the value as on the date of the memorandum of understanding had to be adopted for computing capital gains. The addition was liable to be deleted.

Ratio Decidendi: A curative proviso introduced to remove hardship in valuation of immovable property transfers is retrospective where the transfer agreement and registration occur on different dates and part consideration is received by the prescribed modes before the agreement date.

---