TaxTMI 
TaxTMI 
2024 (8) TMI 486
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....n though transacted amount was within tolerance limit." 3. When the appeal was taken up for hearing, none was present on behalf of the Appellant. After examining the issue raised in the present appeal we proceeded to adjudicate the grounds raised in the present appeal on merits after hearing the Ld. Departmental Representative and on the basis of material available on record. 4. On perusal of record, it emerges that the Appellant filed return of income for the Assessment Year 2018-19 on 16/01/2018 declaring total income of INR 12,33,870/. The case of the Appellant was selected for scrutiny. During the assessment proceedings, the Assessing Officer noted that the Appellant had purchased an immovable property for a consideration of INR 41,00,000/- whereas the stamp duty valuation of the aforesaid property was INR 66,64,200/-. Since, the Appellant did not accept the stamp duty value, a reference was made to District Valuation Officer (DVO) under Section 55A of the Act. As per the report of the DVO, the fair market value of the aforesaid immovable property as on 30/06/2017 was INR 44,86,000/-. Thus, there was a difference of INR 3,86,000/- in the consideration paid by the Appellant f....
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....en per cent is not available to the appellant for this assessment year. Under these circumstances, the assessing officer was right in making an addition of Rs. 3,86,000/-." (Emphasis Supplied) 6. Being aggrieved by the above order passed by the CIT(A), the Appellant has carried the issue in appeal before us. 7. The Ld. Departmental Representative supported the order passed by the Assessing Officer and the CIT(A) and submitted that it was admitted position that the difference between the consideration paid by the Appellant for acquiring the property and fair market value determined by the DVO was 9.14% of the purchase consideration. For the relevant assessment year, the Appellant could have been granted in terms of Section 56(2)(x)(b)(B)(ii) of the Act provided the difference was less than 5% of purchase consideration. The rate of 5% in Section 56(2)(x)(b)(B)(ii) of the Act was increased to 10% with effect from 01/04/2021 and was, therefore, not applicable to the Assessment Year 2018-19 before us. 8. We have given thoughtful consideration to the submission advanced by the Learned Departmental Representative. However, we find that identical contentions raised by the Revenue stand....
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....ty value of which exceeds fifty thousand rupees, the stamp duty value of such property; (ii) for a consideration which is less than the stamp duty value of the property by an amount exceeding fifty thousand rupees, the stamp duty value of such property as exceeds such consideration: ** ** **" 11. As could be seen from section 56(2)(vii)(b)(ii), it empowers the assessing officer to treat the excess value determined by the stamp duty authority over and above the declared sale consideration as the deemed sale consideration and add it as income at the hands of the person buying the property. Thus, by the aforesaid provision, a buyer of the property was also brought at par with the seller of the property as per section 50C(1) of the Act. Prima facie, section 56(vii)(b)(ii) would get triggered once the stamp duty authority determines the value of a property in excess of the declared sale consideration. However, the crucial issue which needs to be considered is, whether the third proviso to section 50C(1) of the Act providing exception in case the difference in value is less than 10%, would be applicable to section 56(2)(vii)(b)(ii) of the Act. In this context, the argument of the ....
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.... However, this provision is applicable to an asset other than a capital asset. It will be further interesting to note, in the first proviso to section 43CA(1) of the Act which was introduced by Finance Act, 2018 with effect from 1- 4-2019, similar exception as provided in third proviso to section 50C(1) and section 56(2)(x)(b)(B)(ii) of the Act was introduced. It will be further relevant to observe, by the Finance Act 2020, the permissible limit of variation in the value has been enhanced to ten per cent from five per cent. Of course, in case of section 43CA further benefit has been granted to the assessee by enhancing the limit of variation to 20%. 14. On a conjoint reading of sections 50C, 43CA and 56(2)(x) of the Act, the legislative intention becomes absolutely clear that wherever the statute provides for adoption of the value determined by the stamp valuation authority as the deemed sale consideration, in case, it exceeds declared sale consideration, exceptions have also been provided not to adopt the market value if the difference between the value declared by the assessee and determined by the stamp duty authority is within a permissible limit. 15. The reason for not p....
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....value determined by the stamp duty authority and the declared sale consideration is less than 10%, no addition can be made under section 56(2)(vii)(b)(ii) of the Act. 18. Having held so, the second aspect of the issue which requires consideration is whether the exception to section 50C(1) by way of third proviso and section 56(2)(x)(b)(B) would apply prospectively or retrospectively. The issue is no more res integra in view of a number of decisions of different benches of the Tribunal. The Tribunal has consistently expressed the view that since the aforesaid amendments made by Finance Act, 2018 with effect from 1-4-2019 are curative in nature and beneficial provisions, it would apply retrospectively. In this context, we get support from the following decisions:- 1. Sandip Patil (supra) 2. Maria Fernandes Cheryl (supra) 19. Thus, keeping in view the discussions hereinabove, we delete the addition of Rs. 23,30,694/-. This ground is allowed." 9. On perusal of the above it can be seen that it was held by the Tribunal that the permissible limit of variation in the value specified in the third proviso to Section 50C(1) and Section 56(2)(x)(b)(B) of the Act, which was enhanc....
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....reed consideration and stamp duty value is approximately 6%. In the 7th property, such difference was 14.50 %. Therefore, he confirmed the addition of 7th properties and deleted the addition with respect to 6 properties holding that Proviso to section 50C inserted with effect from 1-4-2019 by the Finance Act 2018 allowed the tolerance band of 5%. It was held to be applicable retrospectively. Further, by the Finance Act 2020 with effect from 1-4-2021 in the same proviso the tolerance band is replaced by increasing it to 10%. Therefore, when there is no change in the wording of the proviso but only tolerance band is increased it should also apply retrospectively. 19. Coordinate bench in case of Maria Fernandes Cheryl (supra) has already held that the amendment made by Introducing proviso [Introduction of tolerance band of 5 % and later on 10%] applies with effect from 1-4-2003 when the provision of section 50C were introduced. 20. Further introduction of tolerance band is for removing the hardship in the section. 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 effec....