TaxTMI 
TaxTMI 
2021 (9) TMI 701
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....n, ignoring the fact that these cost were capitalized in the books, thereby increasing the long term capital gain by Rs. 569723/-. 3. The Learned CIT(A) erred in charging interest U/s 234A, 234B, 234C of the I.T.Act, 1961. 3. In ground 1 assessee has challenged the addition of Rs. 23,30,694/- under section 56(2)(vii)(b) of the Income Tax Act, 1961. 4. Briefly the facts are, the assessee, an individual, is stated to be engaged in the business of trading in imitation jewellery. For the assessment year under dispute, assessee filed his return of income on 30-09-2015 declaring total income of Rs. 6,28,420/-. The assessee also declared current year loss of Rs. 76,18,500/-. Subsequently, on 30-09-2016 assessee filed a revised return of income declaring total income of Rs. 6,20,650/- and current year's loss of Rs. 79,43,584/-. In course of assessment proceedings, the assessing officer, based on information available on record, noticed that in the year under consideration the assessee had purchased four immovable properties. From the details furnished, he found that the declared sale consideration shown by the assessee is lesser than the stamp duty value (market value) deter....
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....ip Patil vs ITO ITA 924/Bang/2019 dt 09-09-2020 3. M/s John Flower (India) Pvt Ltd vs DCIT ITA 7545/Mum/2014 4. Pankaj Anilkumar Pitale vs ACIT ITA 6813/Mum/2017 dt 19-03-2019 6. Strongly relying upon the observations of learned Commissioner (Appeals), the learned departmental representative submitted, unlike the third proviso to section 50C(1) of the Act, there is no such provision in section 56(2)(vii)(b)(ii) of the Act. Therefore, the assessee cannot be allowed the benefit of the less than 10% difference in value between the stamp duty authority and declared sale consideration. In any case of the matter, she submitted, even assuming that the third proviso to section 50C(1) of the Act would be applicable; however, it cannot apply retrospectively and particularly to the impugned assessment year. 7. We have considered rival submissions in the light of decisions relied upon and perused materials on record. The undisputed facts emanating from record are, during the year under consideration, the assessee had purchased four movable properties. Admittedly, there is a difference in value of the properties as declared in the sale agreement and as determined by the stamp ....
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....le asset by an assessee is less than the value determined by the stamp valuation authority, the value so determined would be deemed to be the full value of consideration received or accruing as a result of such transfer, for computing capital gain. By Finance Act, 2018, the third proviso to section 50C(1) of the Act was introduced to the statute with effect from 01-04-2019, which reads as under:- "50C. (1) Where the consideration received or accruing as a result of the transfer by an assessee of 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 (hereafter in this section referred to as the "stamp valuation authority") for the purpose of payment of stamp duty in respect of such transfer, the value so adopted or assessed or assessable shall, for the purposes of section 48, be deemed to be the full value of the consideration received or accruing as a result of such transfer : xxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxx Provided also that where the value adopted or assessed or assessable by the stamp valuation authority does not exceed one hundred and five per cent ....
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....ransaction undertaken between 1st day of October, 2009 and before 1st day of April, 2017. This amendment was effective from 01-04-2017. Simultaneously with the aforesaid amendment made to section 56(2)(vii), the Finance Act, 2017 also introduced clause (x) to section 56(2) to bring within its ambit the transactions referred to in section 56(2)(vii) undertaken after 1st day of April, 2017. Clause (x) of section 56(2) was subsequently amended by Finance Act, 2018 with effect from 01-04-2019 and again by Finance Act, 2020 with effect from 01-04-2021. The relevant part of section 56(2) which is required for our purpose is extracted hereunder:- "(x) where any person receives, in any previous year, from any person or persons on or after the 1st day of April, 2017,- (a) any sum of money, without consideration, the aggregate value of which exceeds fifty thousand rupees, the whole of the aggregate value of such sum; (b) any immovable property,- (A) without consideration, the stamp duty value of which exceeds fifty thousand rupees, the stamp duty value of such property; 69[(B) for a consideration, the stamp duty value of such property as exceeds s....
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....slature did not felt the necessity of introducing such an exception to section 56(2)(vii)(b)(ii) simply for the reason that such provision was applicable for a period between 1st October, 2009 to 1st April, 2017. Therefore, non-introduction of similar exception to section 56(2)(vii(b)(ii) cannot be held against the assessee. Rather, section 56(2)(vii)(b)(ii) has to be harmoniously construed along with sections 50C, 56(2)(x) and 43CA and the exceptions provided in the later three provisions have to be read into section 56(2)(vii)(b)(ii) to provide true meaning to the intention of the legislature. This, according to us, clearly answers submissions of learned departmental representative regarding absence of a provision identical to third proviso to section 50C(1) in section 56(2)(vii)(b)(ii). 16. Thus, in our considered opinion, the assessee would be eligible to get the benefit of ten per cent margin difference in the valuation between the value determined by the stamp duty authority and the declared sale consideration. Thus, if the variation between the aforesaid two values falls within the range of ten per cent, no addition can be made. 17. It is further relevant to observe, s....