Section 50C tolerance band applies retrospectively where stamp valuation stays within 110% of declared sale consideration.

The enhanced tolerance band under section 50C was treated as a curative and beneficial amendment, capable of retrospective application to Assessment Year 2016-17. Because the stamp valuation did not exceed 110% of the actual sale consideration, the Tribunal held that the assessee was entitled to the extended tolerance benefit and the declared consideration had to be accepted. The addition made by substituting the stamp valuation was deleted, on the basis that marginal variation alone should not trigger hardship where the legislative amendment was intended to remove such difficulty.

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Issues: Whether the enhanced tolerance band under section 50C, inserted by the Finance Act, 2018 and later increased by the Finance Act, 2020, applies retrospectively for computing capital gains for Assessment Year 2016-17, so as to accept the actual sale consideration where the stamp valuation does not exceed 110% of such consideration.

Analysis: The valuation difference in the present case was within 110% of the actual sale consideration. The Tribunal treated the tolerance band introduced and later enhanced under section 50C as curative and beneficial in nature, intended to remove hardship arising from marginal variations between declared consideration and stamp valuation. Relying on the principle that beneficial remedial amendments may operate retrospectively, and following the consistent view taken in coordinate bench decisions on a pari materia valuation provision, it held that the assessee was entitled to the extended tolerance benefit for the year under consideration.

Conclusion: The actual sale consideration had to be accepted under section 50C, and the addition made by substituting the stamp valuation was deleted in favour of the assessee.

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