TaxTMI 
TaxTMI 
TaxTMI 
2022 (4) TMI 1171
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....he same should be interpreted strictly and when there is any ambiguity, it should be done in favour of Revenue? 4 Whether the CIT(A) is correct in holding that capital gains are to computed by considering the fair market value of the property as on date of sale agreement i/e 24/1/2005 and not as per date of registration i.e 5.11.2008 by interpreting provision to sec 50C in a liberal manner though the proviso came into force w.e.f, 01/04/2017 only? As evident, the sole subject matter of revenue's appeal is computation of capital gains in the hands of the assessee. 2. The Ld. Sr. DR supported the assessment framed by Ld. AO and submitted that proviso to Sec. 50C(1) was applicable prospectively. The Ld. AR, on the other hand, relied on the decision of Hon'ble High Court of Madras in CIT V/s Vummudi Amarendran (120 Taxmann.com 171; 28.09.2020) to support the impugned order. 3. Having hard rival submissions and after due consideration of material facts, our adjudication would be as under. 4. The assessee, as joint owner of a vacant land measuring 66242 Square Feets, R.S.No.35/153 in Block No.6 and R.S. No. 36/49 in Block No. 7 situated at Mackey Garden, Chennai, sold the same duri....
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.... by Finance Act, 2016 w.e.f. 01.04.2017. We find that the proviso has been held to be retrospective in nature by Hon'ble Madras High Court in CIT V/s Vummudi Amarendran (120 Taxmann.com 171; 28.09.2020) wherein it has been held as under: - 7. Before we proceed to consider as to whether proviso inserted in Section 50C of the Act has to be read retrospective or prospective, we need to point out that the Assessing Officer did not doubt the bona fides of the transaction done by the assessee, since the Assessing Officer accepted the fact that the assessee had entered into an Agreement for Sale of the property in question vide Agreement for Sale dated 4-8-2012, wherein agreed sale consideration was Rs. 19 Crores and the assessee had received Rs. 6 Crores by way of account payee cheque on the date of signing the Agreement. This fact was noted by the CIT(A) and held that the Agreement cannot be treated to be ante-dated as the assessee had received Rs. 6 crores as advance on the date of Agreement through banking channel. The only reason for the Assessing Officer to adopt higher value is based upon the guideline value fixed by the State Government. The question would be as to what is the e....
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....as not doubted and the receipt of advance was through banking channel by way of a demand draft. 9. Therefore, in our considered view the Assessing Officer could not have based his finding solely relying upon the guideline value especially when the Assessing Officer is not a person who is computing stamp duty under the provisions of Indian Stamp Act on the Deed of conveyance. Having observed so we need to take note of the next issue would be as to whether the proviso to Section 50C could be read to be prospective or retrospective. Section 50C(1) proviso reads as follows: "Provided that where the date of the agreement fixing the amount of consideration and the date of registration for the transfer of the capita 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.'' 10. Reading of the above proviso would show that the legislature took note of the fact that there are several occasions where the Agreements are entered into between a willing vendor and willing purchaser on an agreed sale consideration, the Agreeme....
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....stantial, can suffer severe adverse consequence if the amendment made in 2010 is not given retrospective operation i.e., from the date of substitution of the provision. Thus, the amendment made by the Finance Act 2010 being curative in nature was held to be retrospective in operation. In the above decision, the Hon'ble Supreme Court took note of the fact that the statutory amendment was being made to remove undue hardship to the assessee or held to be retrospective. 12. The Honble Supreme Court in Kolkata Export Company took note of the earlier decisions on the same issue in the case of Allied Motors (P.) Ltd. v. CIT [1997] 91 Taxman 205/224 ITR 677, Whirlpool of India Ltd. v. CIT [2000] 245 ITR 3, CIT v. Amrit Banaspati Co. Ltd. [2002] 123 Taxman 74/255 ITR 117 (SC) and CIT v. Alom Enterprises [2009] 185 Taxman 416/319 ITR 306 and held that the new proviso should be given retrospective effect from the insertion on the ground that the proviso was added to remedy unintended consequences and supply an obvious omission. The proviso ensured reasonable interpretation and retrospective effect would serve the object behind the enactment. Thus by taking note of the above decisions, w....
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....t of consideration for the transfer of immovable property and the date of registration are not the same, the stamp duty value on the date of the agreement may be taken for the purposes of computing the full value of consideration. It is further proposed to provide that this provision shall apply only in a case where the amount of consideration referred to therein, or a part thereof, has been paid by way of an account payee cheque or account payee bank draft or use of electronic clearing system through a bank account, on or before the date of the agreement for the transfer of such immovable property. These amendments are proposed to be made effective from the 1st day of April, 2017 and shall accordingly apply in relation to assessment year 2017-18 and subsequent years.'' 15. Taking note of the above Memorandum, it was pointed out that once 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, containing such an undue hardship or incongruity, was introduced. The report also referred to the decision in the case of Alom Enterprises (....