TaxTMI 
TaxTMI 
TaxTMI 
2020 (6) TMI 468
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....n building without rejection of the books of accounts and pointing out specifically in which year the valuation is above book value. 3. Brief facts qua the issue are that as per valuation report of the valuation officer (DVO), the value of the building (asset) was to the tune of Rs. 1,76,55,900/- as against Rs. 1,66,52,805/- shown by the assessee. Learned CIT(A) was of the view that assessee has invested an amount of Rs. 1,76,55,900/-, as reported by DVO as against Rs. 1,66,52,805/- shown by the assessee in return of income. Therefore, the excess investment of Rs. 10,03,095/- (1,76,55,900 - 1,66,52,805) was treated by the ld. CIT(A) as an unexplained investment u/s 69 of the Act and the said amount had been enhanced by the ld. CIT(A) observing the following: "The Assessing Officer vide remand report No. ACIT/Cir-3/ASL/2011- 12/AASPH9787M/12 dt. 18.04.2012 further stated as under: Assessment under section 143(3) of the Act for the A.Y. 2008-09 was completed on 29.12.2010 at Rs. 1,48,99,130/- against returned income of Rs. 10,17,810/-. During the course of assessment proceedings for the said assessment year a reference under section 142A/131 (d) of the Income Tax Act, 1961 to th....
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....95/- is undisclosed investment of the assessee and assessment may be enhanced to that amount. On verification of assessment record, no such recorded reasons before making reference to the DVO have been found." The above valuation report by the DVO shows that the appellant has invested an amount of Rs. 1,76,55,900/- as reported by the DVO as against Rs. 1,66,52,805/- shown by the appellant. Thus, there is an visible excess investment of Rs. 10,03,095/- made by the appellant, which has not been shown by the appellant in his books of account. In view of this, I treat the amount of Rs. 10,03,095/- as unexplained investment u/s 69 of the I T Act and enhance the income of the appellant by Rs. 10,30,095/-. Hence appeal partly allowed." 4. Aggrieved by the order of ld. CIT(A) the assessee is in appeal before us. 5. We have heard both the parties and carefully gone through the submission put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the fact of the case including the findings of the ld CIT(A) and other materials available on record. We note that as per DVO, the valuation of the property is at Rs. 1,76,55,900/- whereas....
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....amp duty value and the sale consideration. We note that the statute such an amendment in law, in view of the well settled legal position to the effect that a curative amendment to avoid unintended consequences is to be treated as retrospective in nature even though it may not state so specifically, for that we rely on the judgment of the Hon`ble Supreme Court in the case of Alom Extrusions Ltd 185 Taxman 416 (SC) wherein it was held as follows: "8. On reading the above provisions, it becomes clear that the assessee(s)- employer(s) would be entitled to deduction only if the contribution stands credited on or before the due date given in the Provident Fund Act. However, the second proviso once again created further difficulties. In many of the companies, financial year ended on 31st March, which did not coincide with the accounting period of R.P.F.C. For example, in many cases, the time to make contribution to R.P.F.C. ended after due date for filing of returns. Therefore, the industry once again made representation to the Ministry of Finance and, taking cognizance of this difficulty, the Parliament inserted one more amendment vide Finance Act, 2003, which, as stated above, came in....
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....and other Tax laws. Therefore, by way of first proviso, an incentive/relaxation was sought to be given in respect of tax, duty, cess or fee by explicitly stating that if such tax, duty, cess or fee is paid before the date of filing of the Return under the Income-tax Act [due date], the assessee(s) then would be entitled to deduction. However, this relaxation/incentive was restricted only to tax, duty, cess and fee. It did not apply to contributions to labour welfare funds. The reason appears to be that the employer(s) should not sit on the collected contributions and deprive the workmen of the rightful benefits under Social Welfare legislations by delaying payment of contributions to the welfare funds. However, as stated above, the second proviso resulted in implementation problems, which have been mentioned hereinabove, and which resulted in the enactment of Finance Act, 2003, deleting the second proviso and bringing about uniformity in the first proviso by equating tax, duty, cess and fee with contributions to welfare funds. Once this uniformity is brought about in the first proviso, then, in our view, the Finance Act, 2003, which is made applicable by the Parliament only with ef....
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....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.'s case (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 with effect from 1-4-1988 [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 Income-tax 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 view of the second proviso, which stood on the statute book at the relevant time, each of such assessee(s) would not be entitled to deduction under section ....
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....be treated as retrospective in operation so that a reasonable interpretation can be given to the section as a whole. Accordingly, the sales-tax collected by the assessee collected in the last quarter of the relevant previous year and paid after the end of the previous year but within the time allowed under the relevant sales-tax law could not be disallowed under section 43B, while computing the business income of the said previous year." 12. We note that the Coordinate Bench of ITAT Mumbai, in the case of M/s John Flower ( India) Pvt. Ltd, in ITA No.7545/Mum/2014, for A.Y. 2010-11, order dated 25.01.2017 held that if the difference between the valuation adopted by the Stamp Valuation Authority and declared by the assessee is less than 10%, the same should be ignored and no adjustments shall be made. Accordingly, we hold that the insertion of third proviso (noted above) to Section 50C of the Act is declaratory and curative in nature. That is, the third proviso to Section 50C of the Act relates to computation of value of property as explained by us above, hence it is not a substantive amendment, it is only a procedural amendment therefore the Coordinate Benches of the ITAT used....