TaxTMI 
TaxTMI 
2024 (6) TMI 674
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....he A.Y. 2010-11. 2. Whether on the facts and in the circumstances of the case and in the law, the Ld. CIT(A) erred in not appreciating that unless explicitly stated a piece of legislation is presumed not be intended to have retrospective operation based on the principle "lex prospicit non respicit" meaning that the law look forwards and not backwards?" 03. The fact clearly shows that the assessee is an individual deriving income from salaries and earned Long Term Capital Gain during the year. The assessee jointly holds two plots of land at Bhandup East, Mumbai. These lands were inherited and were acquired in the year 1965, by the grandfather of the assessee and his brothers. Therefore, the assessee was in a receipt of his share through inheritance. The assessee entered into a development agreement with a Developer M/s Horizon Enterprises on 19th August, 2006, for the transfer of above two plots for a consideration of Rs. 2,57,77,000/- and Rs. 8,70,000/- but the possession of the same plot was not handed over to the developer. The assessee contended this consideration fixed in the year 2006 and received the sum of Rs. 1,00,000/- on entering into an agreement. As on the date of th....
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....t by Finance Act, 2016, the deemed full value of consideration should be taken as on the date of agreement executed i.e. in 2006. He relied upon several judicial precedents. Further, as during the course of assessment proceedings, itself the valuation was referred to the District Valuation Officer, who held that the Stamp Duty Value of the respective plots as on 25th August, 2006 is Rs. 2,79,86,000/- and Rs. 11,40,000/- respectively , wherein the consideration is Rs. 2,57,77,000/- and Rs. 8,70,000/- respectively for both the plots. Accordingly, he held that amendment to Section 50C is retrospective in nature and therefore, for the consideration of capital gain the stamp duty value as on 19th August, 2006, shall be considered. He directed the learned Assessing Officer to recompute the capital gain after due verification. The learned Assessing Officer is aggrieved with the same and is in appeal before us. 08. The only grievance of the learned Assessing Officer is that amended provisions of Section 50C of the Act were introduced with effect from A.Y. 2017-18, prospectively and is not applicable retrospectively for the A.Y. 2010-11 and therefore, such amended provision could not have ....
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....ed out that the guideline value has relevance only in the context of section 47A of the Indian Stamp Act (as amended by Tamil Nadu Act 24 of 1967) which provides for dealing with instruments of conveyance which are undervalued. The guideline value is a rate fixed by the authorities under the Stamp Act for the purpose of determining the true market value of the property disclosed in an instrument requiring payment of stamp duty. Thus the guideline value fixed is not final but only a prima facie rate prevailing in an area to ascertain the true or correct market value. It is open to the Registering Authority as well as the person seeking registration to prove the actual market value of the property. The authorities cannot regard the guideline valuation as the last word on the subject of market value but only a factor to be taken note of, if at all available in respect of an area in which the property transferred lies. It was further pointed out that this position is made clear in the explanation to Rule 3 of the Tamil Nadu Stamp (Prevention of Undervaluation of Instruments) Rules, 1968; this explanation also will have to be read in conjunction with explanation to section 47(A) of the ....
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....re are other types of transaction where the vendor executes Power of Attorney in favour of the intending purchaser empowering him to sell the property at any time he proposes to do so. In fact this was also a subject matter of consideration, when the legislature though to introduce the amendment to section 50C of the Act. There may be cases where the sale consideration will be taken as deferred payment subject to certain contingencies. However the case on hand is very straight forward case, where there is an Agreement for Sale, agreeing to sell the property at Rs. 19 Crores and a sum of Rs. 6 Crores has been received as advance sale consideration. The proviso to Section 50C(1) of the Act deals with cases where the date of the agreement, fixing the amount of consideration and the date of registration for the transfer of the capital assets 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. Thus an amendment by insertion of proviso seeks to relieve the assessee from undue hardship. 11. The Hon'ble Supreme Court in CIT v. C....
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....g the assessee's appeal vide order dated 25-7-2019, took note of the submissions made by the assessee wherein they placed reliance on the decision of the Ahmadabad Bench of the Tribunal in the case of Dharamshibhai Sonani v. Asstt. CIT [2016] 75 taxmann.com 141/161 ITD 627, order of the Delhi Bench of the ITAT in the case of Income tax Officer v. Modipon Ltd. [2015] 57 taxmann.com 360/154 ITD 369. 13. On a reading of the order passed by the CIT(A), it is interesting to note the report submitted by the Income-tax Simplification Committee set up in 2015, headed by a Former Judge of the High Court, Delhi. 14. Mr. T. Ravikumar, learned Senior Standing Counsel is right in a submission that this report is not binding or cannot be taken to have a statutory force. Nevertheless Simplification Committee was consisted of experts in the field of taxation and it would be worthwhile and interesting to note as to why they have considered the insertion of the proviso to section 50(C) of the Act should be held to be retrospective; In the report there is an extract of Memorandum explaining provisions of Finance Bill 2016 which reads as follows: ''Rationalization of section 50C in c....
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....nded that the date of agreement should be taken as date on which the property was transferred by bringing the same within the ambit of section 2(47) of the Act, which is not the case before us. In Ambattur Clothing Co. Ltd. (supra), the assessee contended that since the buyer wanted the Sale Deed to be released after registration, they had paid stamp duty as per the guideline value which is higher than the sale consideration agreed to be paid on the instruments. This explanation offered by the assessee was found to be factually incorrect and rejected and in the background of the said facts, the Hon'ble Supreme Court observes that the Assessing Officer was justified in treating the value adopted by the stamp valuation authority as the deemed sale consideration, received/accruing as a result of transfer. 17. On going through the facts of the case on hand, we find that no such observation was made by the Assessing Officer. The assessee's consistent case was that the sale consideration agreed to be paid to him by the purchaser was Rs. 19 crores and Rs. 6 crores was received as advance on the date of entering into the Agreement for Sale. However, the Assessing Officer disbelieved ....