TaxTMI 
TaxTMI 
2017 (11) TMI 1943
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....ommissioner of Income Tax (Appeals), Ahmedabad has erred in not considering properly and judiciously that: (i) Provisions of Section 50C are not applicable at all. (ii) Agreement to sale the concerned property was made on 04.07.2007. (iii) Out of the total sale consideration agreed as per agreement to sale 95% of the sale price already received in F.Y.2007-08, 31.03.2008. (iv) Possession of the property was handed over as per agreement Dt.30.01.2009. (v) Deed of sale executed and registered on 24.09.2009 for which authority charged registration fees etc. at Rs. 1,05,200/- on the basis of sale consideration of Rs. 1,05,00,000/- (vi) Valuation report of approved valuer Paras Rangwala of S.C. Rangwala Dt. 04.06.2007 submitted in support of prevailing rate at the time of entering into agreement to sale is also not taken into account. (vii) In view of (vi) above Assistant Commissioner of Income Tax even not referred the valuation to department valuation officer and thereby not acted in the spirit of justice. (viii)In view of the above valuation adopted by stamp duty authority amounts to procedure on the basis of the....
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.... time when agreement to sell is entered into, there is sometimes considerable gap in parties agreeing to a transaction (i.e. agreement to sell) and the actual execution of the transaction (i.e. sale deed), and yet, it is the value as on the date of execution of sale deed which is recognized by Section 50C for the purpose of computing the capital gain because that is what is relevant for the purpose of computing stamp duty for registration of sale deed. The very comparison between the value as per sale deed and the value as per stamp duty valuation, accordingly, ceases to be devoid of a rational basis because these two values represent the values at two different points of time. In a situation in which there is significant difference between the point of time when agreement to sell is executed and when the sale deed is executed, therefore, should ideally be between the sale consideration as per registered sale deed, which is fixed by way of the agreement to sell, vis-à-vis the stamp duty valuation as at the point of time when agreement to sell, whereby sale consideration was infact fixed, because, if at all any suppression of sale consideration should be assumed, it should be....
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....tion (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....
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.... date of sale, and introduced welcome amendments 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 effectiv....
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....emove an apparent incongruity which resulted in undue 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 3....
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....pril, 1988. It is important to note once again that, by 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 Ac....
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....rections, the matter stands restored to the file of the Assessing Officer for adjudication de novo, after giving an opportunity of hearing to the assessee and by way of a speaking order. I order so." 4. Learned counsel then also invites our attention to a decision of Hon'ble Allahabad High Court in the case of CIT vs Shimbhu Mehra, [2016] 65 taxmann.com 142 (Allahabad), in support of the same proposition. Learned Counsel then invites our attention to the copy of the agreement to sale which is placed at page nos. 1-8 of the paper book as also the copy of the sale deed which is placed at page nos. 9-30 of the paper-book. Learned counsel further points out that the dates on which relevant payments are made are clearly set out in the sale deed at internal page no.12, which are in accordance with the agreement to sale. Learned counsel thus contends that the bonafides of the agreement to sale, in the light of the dates on which the payments are made, cannot be doubted. On the strength of this submission, we are urged to remit this issue to the file of the Assessing Officer with the direction that the stamp duty valuation as on the date on which the agreement to sale was entered ....