TaxTMI 
TaxTMI 
TaxTMI 
2019 (2) TMI 280
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....pplicable in the present case. 2. Under the facts and circumstances of the case, the Ld. CIT(A) erred in law and on facts in deleting the addition of Rs. 1,82,95,925/- by invoking the amended proviso to section 50C(1) of the Act retrospectively & adopting the fair market value at Rs. 4,05,00,000/- as on the date of agreement to sell i.e. 11.10.2011 relying upon the judgment of Hon'ble ITAT, Ahmedabad Bench in the case of Dharmshibhai Sonani Vs. ACIT, Surat without appreciating that the Hon'ble ITAT, Ahmedabad in the above case remanded the matter back to the file of the A.O. and after examination adopt the stamp duty valuation as on the date of agreement and moreover, the retrospective application of amended proviso to section 50C(1) is debatable under various courts of law. 3. Under the facts & circumstances of the case, the CIT(A) erred in law & facts in excluding the value of land area of 844.24 sq.mtr. for stamp duty valuation of Rs. 46,43,320/- as per section 50C of the Act in as much as the assessee received an advance of Rs. 10,00,000/- towards the same earlier as per Builder's Agreement dated 10.10.2005. 4. Under the facts & circumstances of the case, the ....
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....tanding on 10/10/2011 whereby the consideration for the property was fixed at Rs. 4,05,00,000/- and in this respect our attention was invited to copy of memorandum of understanding placed at pages 68 to 73 of the paper book. Learned A. R. submitted that this memorandum of understanding itself notes the fact of having entered into a builder's agreement on 10/10/2005 and also notes that due to disputes this new memorandum of agreement has been entered and therefore, it cannot be said that the sale through this MOU was not made as a distress sale. Learned A. R. submitted that this memorandum of understanding notes that there were various litigations between the parties and to arrive at an amicable settlement, the agreement was entered into and was presented to Hon'ble High Court and therefore, it is wrong on the part of the Revenue to argue that the sale was not a distress sale. Learned A. R. further argued that even if the provisions of section 50C are applied, the circle rate prevalent at the time of entering the agreement has to be taken into account as the provisions of section 50C itself has been amended and its application has been held to be retrospectively applicable by H....
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.... from clause 47 of the agreement, which for the purpose of completeness is reproduced below: "47. That the subject matter of this agreement is 844.24 sq. meter of land the valuation of the same @Rs.5,000/- per sq. meter comes to Rs. 42,21,200/-, the land is situated at more than 9 meter wide road hence 10% extra value comes to Rs. 4,22,120/-. Thus, the total value of the land comes to Rs. 46,43,320/- consequently the stamp duty of Rs. 4,64,400/- has been paid." As per this agreement the builder was to construct flats on the property and the proceeds were to be shared between the builder and the assessee to the extent of 65% and 35% respectively. The said agreement could not be executed as there arose certain disputes and the matter became subject of litigation, as is apparent from copy of Writ Petition filed by the builder, placed at pages 100 to 110 of the paper book. In view of the litigations the assessee entered into a fresh memorandum of understanding vide agreement to sell dated 11/10/2011, placed at pages 68 to 73 of the paper book. In this memorandum of understanding, the fact of original agreement dated 10/10/2005 and various legal proceedings against the agreement has ....
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.... date of registration for the transfer of the capital asset are not the same, the value adopted or assessed or assessable by the stamp valuation authority on the date of agreement may be taken for the purposes of computing full value of consideration for such transfer provided the amount of consideration, or a part of consideration, was paid by an account payee cheque or by use of electronic clearing system, on or before the date of the agreement for transfer. In the present case, we find that memorandum of understanding was entered on 10/10/2011, a copy of which is placed at pages 68 to 73 of the paper book. The sale consideration has been fixed at Rs. 4,05,00,000/- out of which Rs. 15,00,000/- was paid vide cheque no. 177078 on the date of agreement itself which finds mention in the copy of agreement itself. The said advance also finds mention in the sale deed registered on 16/09/2013, placed at pages 7 to 19 of the paper book where in the schedule of payments, placed at page 17, the same cheque dated 11/10/2011 for Rs. 15,00,000/- finds mention. Therefore, in the present case the value of circle rate, prevailing at the time of entering the agreement i.e. 11.10.29011, was to be ....
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....sub-section (4) shall apply only in a case where the amount of consideration or a part thereof has been received by any mode other than cash on or before a date of agreement for transfer of the asset. 5. True to the work ethos of the current Government, it was the first time that within four months of the Tax Simplification Committee being notified, not only the first report of the Committee was submitted, but the Government also walked the talk by ensuring that the several statutory amendments, based on recommendations of this report, were introduced in the Parliament. So far as Section 50 C is concerned, the Finance Act 2016, with effect from 1st April 2017, inserted the following provisos to Section 50C: Provided that where the date of the agreement fixing the amount of consideration and the date of registration for the transfer of the capital asset are not the same, the value adopted or assessed or assessable by the stamp valuation authority on the date of agreement may be taken for the purposes of computing full value of consideration for such transfer: Provided further that the first proviso shall apply only in a case where the amount of consideration, or a part thereof....
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....mendments to the statue to take the remedial measures, this brings no relief to the assessee before me as the amendment is introduced only with prospective effect from 1st April 2017. There cannot be any dispute that this amendment in the scheme of Section 50C has been made to remove an incongruity, resulting in undue hardship to the assessee, as is evident from the observation in Easwar Committee report to the effect that "The (then prevailing) provisions of section 50C do not provide any relief where the seller has entered into an agreement to sell the asset much before the actual date of transfer of the immovable property and the sale consideration has been fixed in such agreement" recognizing the incongruity that the date agreement of sell has been ignored in the statute even though it was crucial as it was at this point of time that the sale consideration is finalized. The incongruity in the statute was glaring and undue hardship not in dispute. Once it is not in dispute that a statutory amendment is being made to remove an undue hardship to the assessee or to remove an apparent incongruity, such an amendment has to be treated as effective from the date on which the law, conta....
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....ue hardships to the taxpayers, should be treated as retrospective in effect. Quite clearly therefore, even when the statute does not specifically state so, such amendments, in the light of the detailed discussions above, can only be treated as retrospective and effective from the date related statutory provisions was introduced. Viewed thus, the proviso to Section 50 C should also be treated as curative in nature and with retrospective effect from 1st April 2003, i.e. the date effective from which Section 50C was introduced. While the Government must be complimented for the unparalleled swiftness with which the Easwar Committee recommendations, as accepted by the Government, were implemented, I, as a judicial officer, would think this was still one step short of what ought to have been done inasmuch as the amendment, in tune with the judge made law, ought to have been effective from the date on which the related legal provisions were introduced. As I say so, in addition to the reasoning given earlier in this order, I may also refer to the observations of Hon'ble Supreme Court, the case of CIT Vs Alom Extrusion Ltd [(2009) 319 ITR 306 SC)], to the following effect: "Once this unif....
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....y Finance Act, 2003, not only the second proviso is deleted but even the first proviso is sought to be amended by bringing about an uniformity in tax, duty, cess and fee on the one hand vis-a-vis contributions to welfare funds of employee(s) on the other. This is one more reason why we hold that the Finance Act, 2003, is retrospective in operation. Moreover, the judgment in Allied Motors (P) Ltd. Etc. (supra) is delivered by a Bench of three learned Judges, which is binding on us. Accordingly, we hold that Finance Act, 2003, will operate retrospectively w.e.f. 1st April, 1988 (when the first proviso stood inserted). Lastly, we may point out the hardship and the invidious discrimination which would be caused to the assessee(s) if the contention of the Department is to be accepted that Finance Act, 2003, to the above extent, operated prospectively. Take an example- in the present case, the respondents have deposited the contributions with the R.P.F.C. after 31st March (end of accounting year) but before filing of the Returns under the IT Act and the date of payment falls after the due date under the Employees' Provident Fund Act, they will be denied deduction for all times. In vi....