TaxTMI 
TaxTMI 
2025 (5) TMI 1389
X X X X Extracts X X X X
X X X X Extracts X X X X
....ts and circumstances of the case and in law, the learned Commissioner of Income Tax(Appeal)-50, Mumbai, erred in confirming the addition of Rs. 4,46,63,000/- u/s.43CA in this assessment year, whereas the plain reading of section 43CA suggests, that this addition can be made only in the year in which the project is completed. 3. On the facts and in circumstances of the case and in law, the learned Commissioner of Income (Appeal)-50, Mumbai erred in confirming the addition u/s.43CA in respect of property whose agreement value was only 6.6% less than the value fixed for stamp purposes ignoring the fact, that, the amendment to section 43CA by finance acts of 2018 and 2020, being curative in nature had retrospective effect from the day 43CA was introduced in the act. 4. On the facts and circumstances of the case and in law, the learned Commissioner of Income Tax (Appeal)-50, Mumbai failed to take note of the fact, that the value arrived at by the DVO was only 2.46% and 1.55% more than the agreement values of the two properties and such small differences should be ignored when applying the provisions of section 43CA." 2. The assessee is a partnership firm and engaged in the busin....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ial action may be taken by the assessee as per law after receiving the report of the DVO. Aggrieved the assessee filed further appeal before the CIT(A). The CIT(A) upheld the AO's finding that the proviso to section 43CA containing the tolerance band for the difference between the stamp duty value and sale consideration is not applicable to the assessee. But the CIT(A) gave relief to the assessee by considering the valuation of both the properties as per the DVO report whereby the addition was reduced to Rs. 77,80,000/-. 5. There is a delay of 45 days in filing the appeal before the Tribunal and the ld. AR filed application for condoning the delay. Having heard both the parties and perused the material on record, we are of the view that there is a reasonable and sufficient cause for the delay in filing the appeal before the Tribunal. Therefore following the Hon'ble Supreme Court decision in the case of Collector, Land Acquisition Vs. MST.Katiji & Ors., (167 ITR 471) (SC) we condone the delay of 45 days in filing the appeal and admit the appeal for adjudication. 6. The ld AR submitted that the said tolerance bands were introduced in section 43CA to remove the hardships faced b....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sale consideration. Therefore before proceeding further we will look at the provisions of section 43CA which read as under - 43CA. - Special provision for full value of consideration for transfer of assets other than capital assets in certain cases. (1) 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 duty in respect of such transfer, the value so adopted or assessed or assessable shall, for the purposes of computing profits and gains from transfer of such asset, be deemed to be the full value of the consideration received or accruing as a result of such transfer: Provided that where the value adopted or assessed or assessable by the authority for the purpose of payment of stamp duty does not exceed one hundred and ten per cent of the consideration received or accruing as a result of the transfer, the consideration so received or accruing as a result of the transfer shall, for the purposes of computing profits and gains from transfer....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ch of the Tribunal in the case of Macrotech Developers Ltd. (supra) has considered a similar issue where it has been held that - "037. Ground number 4 of the appeal is with respect to the addition of Rs 2,03,051/- by invoking the provisions of section 43CA of the act. During the year, the assessee has sold a commercial property to a customer for the sale consideration of Rs. 47,500,000/-. The stamp duty value of the flat as determined by the stamp duty authority is 47,703,051/- which exceeded the value of the sale consideration by Rs. 2,03,051/-. Thus, the difference between the sale consideration and stamp duty value is merely 0.43% The learned assessing officer has made the addition of the above sum by invoking the provisions of section 43CA of the act. This was also upheld by the learned dispute resolution panel. 038. The learned authorized representative submitted that first proviso to section 43CA (1) of the act states that where the difference between the sale consideration and value adopted for the purpose of stamp duty does not exceed 110% of the sale consideration, the deeming provisions of this section will not apply and the actual sale consideration will be consider....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... officer. Even otherwise, he submitted that the several judicial precedents have held that it is retrospective in nature. He further referred to the central board of direct taxes Circular number 8 of 2018 dated 26/12/2018 wherein the tolerance band of 5% was provided which is enhanced to 10% with effect from 1/4/2021. He therefore submitted that there is no reason why assessee should not be given a benefit of the above tolerance band. 041. We have carefully considered the rival contention and perused the orders of the lower authorities. 042. We find that identical issue arose before the coordinate bench in case of Sai Bhargavanath Infra v Assistant Commissioner of Income-tax [2022] 144 taxmann.com 168 (Pune Trib.) For assessment year 2015-16 wherein it has been held that- "4. We observe from plain reading of sec. 43CA that it provides in a case where consideration received or accruing as a result of the transfer by an assessee of an asset other than the capital asset being land or building is lesser than the value adopted or assessed by any Government authority for the purpose of payment of stamp duty then the difference will taxed as deemed income. At the same time, the p....
X X X X Extracts X X X X
X X X X Extracts X X X X
....aid amendment was prospective in nature and did not apply to block period falling before 01-06-2002. However, the plea of the assessee was rejected by the Hon'ble Supreme Court in CIT v. Suresh N. Gupta [2008] 166 Taxman 313/297 ITR 322 also held that the proviso to section 113 is clarificatory and hence, should be read into block assessment scheme under Chapter XIV-B with retrospective effect. Similar view was reiterated by the Hon'ble Supreme Court in CIT v. Rajiv Bhatara (2009) 178 Taxman 285/310 ITR 105 by holding the proviso u/s 113 to be retrospective in nature. Then the Supreme Court was of the view that the issue ought to be referred to a larger Bench of Five Judges. In this decision, the Hon'ble Supreme Court has given fundamental doctrine of retrospective applicability of provision. It has been held that no statute shall be construed to have a retrospective operation unless such a construction appears very clearly in terms of the Act or arises by necessary and distinct implication. The assessment creates a vested right on the assessee. The assessee cannot be subjected to re-assessment unless the provision to that effect is inserted by amendment either retrospe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ase is analysed. Now, the intent of the legislature is to provide relief to the assessee in case such difference is less than 10% which has been brought into effect from 1-04-2021 thereby providing benefit to the assessee. This being the beneficial provision therefore will even have retrospective effect and would apply to the present assessment year 2015-16. At this juncture we would also refer to the decision of Pune Tribunal in Dinar Umeshkumar More v. ITO [IT Appeal No. 1503 (Pune) of 2015, dated 25-1-2019], where the said proposition of applicability of a beneficial provision was considered in light of Hon'ble Apex Court decision in the case of Vatika Township (P) Ltd. (supra). In the said Tribunal order, the Bench observed that if the legislature is going to confer a benefit then such an averment will have a retrospective effect. The Tribunal observed that while discussing this issue in para 33 of the said judgment, the Hon'ble Apex Court held that "We would also like to point out, for the sake of completeness, that where a benefit is conferred by legislation, the rule against a retrospective construction is different. If legislation confers a benefit on some persons b....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ition in the hands of the assessee. Accordingly, we direct the learned assessing officer to delete the addition of Rs. 2,03,051/- made under section 43CA of the act. Ground umber 4 of the appeal of the assessee is allowed." 12. From the perusal of the above decision, it is noticed that the coordinate bench has held that the proviso to section 43CA providing relief to the assessee to the extent of the difference being less than 10% is applicable retrospectively for the reason that it is a beneficial provision as has been held by the Hon'ble Supreme Court in the case Vatika Township Pvt. Ltd. (supra). It is relevant to notice here that the coordinate bench has distinguished the decision relied on by the ld DR in the case of welfare properties private limited (supra). We further notice that a similar view has been held by the Co-ordinate Bench in other cases which are relied on by the ld. AR as listed in the earlier part of this order. 13. We also notice that the coordinate bench in the case of Maria Fernandes Cheryl vs ITO(IT) [2021] 123 taxmann.com 252 (Mumbai - Trib.) in the context of section 50C has elaborated the legislative intent of introducing the tolerance band and he....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tion where there is little justification for invoking an antiavoidance provision. Similarly, so far as enhancement of tolerance band to 10% by the Finance Act 2020, is concerned, as noted in the CBDT circular itself, it was done in response to the representations of the stakeholders for enhancement in the tolerance band. Once the Government acknowledged this genuine hardship to the taxpayer and addressed the issue by a suitable amendment in law, the next question was what should be a fair tolerance band for variations in these values. As a responsive Government, which is truly the hallmark of the present Government, even though the initial tolerance band level was taken at 5%, in response to the representations by the stakeholders, this tolerance band, or safe harbour provision, was increased to 10%. There is no particular reason to justify any particular time frame for implementing this enhancement of tolerance band or safe harbour provision. The reasons assigned by the CBDT, i.e., "the variation between stamp duty value and actual consideration received can occur in respect of similar properties in the same area because of a variety of factors, including the shape of the plot or ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e principle of "equality before the law," which is one of our most cherished constitutional values. Our judicial functioning has to be even-handed, transparent, and predictable, and what we decide for one litigant must hold good for all other similarly placed litigants as well. We, therefore, decline to entertain this plea of the assessee. 9. We have noted that as against the stated consideration of Rs. 75,00,000/-, the stamp duty valuation of the property is Rs. 79,91,500/-. The difference is just Rs. 4,91,500/-, which is about 6.55% of the stated sale consideration. As the difference between the stated consideration vis-à-vis the stamp duty valuation is admittedly less than 10% of the stated consideration in this case, and in the light of the above discussions, we are of the considered view that section 50C will have no application in the matter. The enhancement in capital gain computation, as made by the Assessing Officer, thus stands disapproved. The assessee gets the relief accordingly. (emphasis supplied) 14. The ratio laid down in the above decision is that the rational for holding newly inserted proviso to sub-section (1) to section 50C of the Act as curative ....