TaxTMI 
TaxTMI 
TaxTMI 
2025 (10) TMI 699
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....e income from house property and from business & profession. The assessee filed its return of income on 31.03.2019, declaring a total income of Rs. 2,95,31,700/-. The return filed by the assessee was selected for scrutiny, and statutory notices under sections 143(2) and 142(1) of the Act were issued and served on the assessee. During the assessment proceedings, it was noticed that during the year under consideration, the assessee entered into a registered agreement for the sale of immovable properties where the sale consideration was less than the value fixed by the stamp authorities. Accordingly, the assessee was asked to show cause as to why the difference between the sale consideration and stamp value should not be added to its total income under section 43CA of the Act. After considering the submissions of the assessee, the Assessing Officer ("AO"), vide order dated 24.04.2021 passed under section 143(3) of the Act, made an addition of Rs. 14,95,43,115/- being the difference between the agreement value and value adopted by the stamp authority and added the same to the total income of the assessee as per section 43CA of the Act. 4. During the pendency of appellate proceedings....
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....t that the assessee sold three immovable properties in its premises, being Trade Link, situated at Kamala Mill Compound, Lower Parel, Mumbai, during the year for a consideration which was less than the stamp duty value. Pursuant to the request by the assessee during the assessment proceedings, the AO referred the matter to the DVO for valuation of the immovable properties sold by the assessee during the year under consideration. As of the date of passing of the assessment order, the report from DVO was not received, the AO, considering the value as determined by the stamp duty authority, made the addition under section 43CA of the Act, subject to rectification on receipt of the valuation report from the DVO. During the pendency of the appellate proceedings before the learned CIT(A), the report from the DVO was received, and therefore, the addition under section 43CA was reduced to Rs. 2,22,44,000/- vide order passed under section 154 read with section 143(3) of the Act. 6. It is the plea of the assessee that the fair market value determined by the DVO in respect of the three properties does not exceed 110% of the consideration received and therefore, the consideration as receive....
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....fer 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 of such asset, be deemed to be the full value of the consideration: Provided further that in case of transfer of an asset, being a residential unit, the provisions of this proviso shall have the effect as if for the words "one hundred and ten per cent", the words "one hundred and twenty per cent" had been substituted, if the following conditions are satisfied, namely:- (i) the transfer of such residential unit takes place during the period beginning from the 12th day of November, 2020 and ending on the 30th day of June, 2021; (ii) such transfer is by way of first time allotment of the residential unit to any person; and (iii) the consideration rece....
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.... 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. 38. 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 considered for the purpose of calculation of the profit. Prior to 1 April 2021, the proviso provided tolerance band of 105% of the sale consideration it was submitted that the enhancement of the tolerance band should apply retrospectively as it is amended to remove the genuine hardship faced by the stakeholders and therefore it should be applied retrospectively. The assessee relied upon several judicial precedents. Accordingly, it was argued that the addition requires to be deleted. 39. The learned departmental representative supported the orders of the lower authorities and submitted that such tolerance bench should not be appli....
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....l 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 proviso to this section states that if there is a difference of such value within 10% margin then there cannot be any addition on the pretext of deemed income and this 10% margin has been inserted by Finance Act, 2020 w.e.f. 1-4-2021. The assessment year under consideration before us is A.Y. 2015-16 that is prior to the date when the amendment look place and such 10% margin was inserted. The question therefore, arises whether this amendment effective from 1-4-2021 can even apply to prior assessment years as well. The assessee had relied on Pune Tribunal decision i....
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.... 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 retrospectively or by necessary implications retrospectively. The Hon'ble Apex Court also opined that there cannot be any imposition of tax without the authority of law and such law has to be unambiguous and should prescribe liability to pay taxes in clear terms. This very principle is based on the doctrine, which means that if a particular provision of statute is not clear regarding imposition of tax or because of persons from whom the tax has to be collected, in such case the persons should not be fastened with any liability to pay tax. It was further observed that ....
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....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 but without inflicting a corresponding detriment on some other person or on the public generally and where to confer such benefit appears to have been the legislators object, then the presumption would be that such legislation, giving it a purposive construction, would warrant it to be given a retrospective effect". The net effect of this judgment is that if a fresh benefit is provided by the Parliament in an existing provision, then such an amendment should be given retrospective effect. Therefore, even without going into the merits of the case by the applic....
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....een held by the Hon'ble Supreme Court in the case CIT v. Vatika Township (P) Ltd. [2014] 49 taxmann.com 249/227 Taxman 121/367 ITR 466 (SC). 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 v. ITO(IT) [2021] 123 taxmann.com 252/187 ITD 738 (Mumbai - Trib.) in the context of section 50C has elaborated the legislative intent of introducing the tolerance band and held that the amendment providing the tolerance band is retrospective in nature and relates back to the date of insertion of statutory section to the Act. The relevant extract of the observations made by the coordinate bench are extracted here under - 7. ........... The insertion of the third proviso to Section 50C(1) provides for this tolerance band with respect to a certain degree of variations between the stamp duty valuation and the ....
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....as 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 location," was as much valid in 2003 as it is in 2021. There is no variation in the material facts in this respect in 2021 vis-a-vis the material facts in 2003. What holds good in 2021 was also good in 2003. If variations up to 10% need to be tolerated and need not be probed further, under section 50C, in 2021, there were no good reasons to probe such variations, under section 50C, in the earlier periods as well. We are, therefore, satisfied that the amendment in t....
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....,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-a-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 in nature, hence, having retrospective application. In our considered view the same analogy would apply to the provisions of Section 43CA of the Act also since both the sections are similarly worded with the difference being that section 50C is applicable in case of transfer of capital asset being land or building or both and section 43CA is for the transfer of asset (other than capital asset) being land or building or both. We further notice that in Circular 8 of 2....