Retrospective tolerance under section 50C prevents stamp value substitution where the declared consideration stays within the permissible range.

The third proviso to section 50C, which expanded the tolerance band for variation between declared sale consideration and stamp valuation, was treated as curative and applied retrospectively to the assessment year in question. Because the difference here was 6.35%, it fell within the later 10% tolerance limit, so the declared consideration could not be substituted by the stamp duty value for capital gains computation. The addition made under section 50C was therefore held unsustainable, with the assessee succeeding on that issue.

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Issues: Whether the third proviso to section 50C, enhancing the tolerance band for difference between the declared sale consideration and the stamp valuation, applied retrospectively to the assessment year in question, and whether the addition made by substituting the stamp duty value was sustainable.

Analysis: The declared consideration and the stamp valuation differed by 6.35%, which was within the later enhanced tolerance limit of 10%. The amendment enlarging the tolerance band was treated as curative in nature and was applied retrospectively, following the principle that such a proviso removes hardship and should govern pending matters. On that basis, the declared consideration could not be disregarded for capital gains computation merely because the stamp value was higher within the permissible range.

Conclusion: The addition made by applying section 50C was not sustainable, and the assessee succeeded on this issue.

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