TaxTMI 
TaxTMI 
2021 (8) TMI 270
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....than 5% and that the purpose of insertion of amendment is to avoid the undue hardships faced by the assessee. 4. In the recent amendment made by Honorable Finance Minister presented on 1st February, 2018 where in it was stated that "to minimise hardship in case of such transactions, it is now provided that where the stamp duty value does not exceed the consideration received or accruing by more than 5% of such consideration, the consideration received or accruing shall be deemed to be the full value of consideration." 5. In the given case the difference between the agreement value and stamp duty value is hardly 0.5%. 6. We request Your Honor to consider the sec 50C retrospectively. 3. Brief facts are that in the assessment proceedings it was noticed by the Assessing Officer that the assessee had sold an immovable property during the year and had purchased another immovable property and had claimed exemption u/s 54 of the Act. It was noted that the assessee was residing in flat No. 16B at S V Road, Santacruz (W), Mumbai, where tenancy rights were in dispute and suit was filed in the High Court of Bombay. The assessee succeeded before the High Court. Later on the tenancy right....
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....cts of its case regarding 56(vii)(b). No details or reply was furnished. It is noted that the appellant's case does not fall within section 56(vii)(b). The appellant also could not cite any specific decision in which the facts were identical to the case of the appellant. The appellant referred to section 50C, which is not the case here. In these facts, the Ground of Appeal is dismissed." 6. Against this the assessee is in appeal before us. 7. We have heard both the parties and perused the records. Learned Counsel of the assessee has summarized the submission as under :- "1. We would like to bring Your Honor's attention to the fact that assessee had filed her return of income on 26.12.2016. During the year under review the assessee had purchased a residential flat at Khar West on 01.10.2015 for a consideration of Rs. 9,00,00,000/- whereas the market value of the property was Rs. 9,04,55,000/-. 2. However, we would like to inform Your Honor that variation can occur in respect of similar properties in the same area because of variety of factors, including shape of the plot or location of property, nearby public amenities, size of land and building, nearby public highwa....
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....0/-. Considering the hardships faced by the honest tax payers the Honorable Finance Minister recognized the same and amended the provisions of sec 50C of the Income Tax Act, 1961. Wherein the Honorable Finance Minister had agreed that the stringent provisions of sec 50C creates hardships to the honest tax payers. Thus, an amendment being curative in nature was introduced in the Finance Bill, 2018. Also, legislature has been compassionate enough to cure these shortcomings of provision, and thus obviate the unintended hardships, 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. Hence, the insertion of third proviso to section 50C must be given retrospective effect from the point of time when the related legal provision was introduced, as this amendment is procedural one to compute the value of property. Same has been upheld in the Honorable Supreme Court in the case of Allied Moters (P) Ltd, 91 Taxman 205 (SC) as follows: "A proviso which is inserted to remedy unintended consequences and to make the proviso workable, a proviso which supplies....
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....oviso to sec 50C of the Act is declaratory and curative in nature. That is, the third proviso to sec 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 co ordinate Benches of ITAT used to ignore the variation up to 10%, therefore the said amendment should be retrospective. 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 third proviso to sec 50C should be treated as curative in nature and with retrospective effect from 1st April 2003, i.e. the sate effective from which section 50C was introduced. Further, sec 43CA of the Income Tax Act, 1961 state that Where the consideration received or accruing as a result of the transfer by an assessee of an asset (other than a capital asset), being land or building or both, is less than the value adopted or assessed or assessable by any authority of a State Government for the purpose of payment of stamp ....
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....tion 155 shall, as far as may be, apply in relation to the stamp duty value of such property. Thus, we request Your Honor to consider the direct nexus between sec 50C, 43CA and sec 56(vii)(b) of the Income Tax Act, 1961. We thus humbly request Your Honor to consider the amendment in sec 50C of the income tax Act, 1961 to be curative in nature and thus, to have a retrospective effect. Further, request Your Honor to disallow the addition made by the Assessing Officer of Rs. 4,55,000/-. There is a minimal difference of 0.51% between the Market Value and Agreement Value which is below the permissible limit as per sec 50C of the Income Tax Act, 1961." 8. Per contra learned Departmental Representative relied upon the orders of the authority below. 9. Upon careful consideration we note that the difference between value declared and value as per stamp value authority is less than 10%. This is within the tolerance limit specified in section 50C. The authorities below have rejected it on the premise that the tolerance limit was introduced by the Finance Act, 2018; hence it is not applicable for the year under consideration. We note the plea that the amendment was intended to cure a ha....