TaxTMI 
TaxTMI 
2026 (3) TMI 1188
X X X X Extracts X X X X
X X X X Extracts X X X X
....ring the impugned year being less than its stamp duty value. The property was purchased by the assessee for a consideration of Rs. 83,66,400/- and as per the Stamp Valuation Authority, the stamp value of the property was Rs. 90,77,000/-. The difference of Rs. 7,10,000/- was added to the income of the assessee in terms of the provisions of Section 56(2)(x) of the Act. 4. The solitary contention of the Ld. Counsel for the assessee before me was that the difference between actual consideration and the stamp duty value was less than 10% of the consideration received and in terms of the provisions of Section 56(2)(x) of the Act, no addition needed to be made to the income of the assessee. He contended that this argument was raised before the AO who rejected the same stating that for the impugned assessment year adjustment only to the extent of 5% of the consideration was required to be made and was increased to 10% only by Finance Act, 2020 w.e.f. 01.04.2021. That the amendment was prospective and, thus, not applicable to the case of the assessee. He contended that the Ld. CIT(A) did not adjudicate this particular ground raised by the assessee before him. The Ld. Counsel for the asse....
X X X X Extracts X X X X
X X X X Extracts X X X X
...., the coordinate bench had, after a detailed analysis of the legal position, observed that, "Now that the legislature has been compassionate enough to cure these shortcomings of provision, and thus obviate the unintended hardships, such an amendment in law, in view of the well settled legal position to the effect that a curative amendment to avoid unintended consequences is to be treated as retrospective in nature even though it may not state so specifically, the insertion of second proviso must be given retrospective effect from the point of time when the related legal provision was introduced". Referring to this decision, and extensively reproducing from the same, including the portion extracted above, Hon'ble Delhi High Court, in the case of CIT Vs Ansal Landmark Township Pvt Ltd [(2015) 61 taxmann.com 45 (Del)], has approved this approach and observed that "(t)he Court is of the view that the above reasoning of the Agra Bench of ITAT as regards the rationale behind the insertion of the second proviso to Section 40(a)(ia) of the Act and its conclusion that the said proviso is declaratory and curative and has retrospective effect from 1st April 2005, merits acceptance". The s....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rbour provision, in respect of such bonafide variations, is implicit in the scheme of law, the assessees are bound to face undue hardships. The mechanism under section 50C proceeds on the assumption that when the sale consideration is less than the stamp duty valuation, the sale consideration is to be treated as understated. This assumption is, however, laid to rest when the variations between the stated consideration and the stamp duty valuation figure are treated as explained. 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 stated consideration of an immovable property. In other words, as long as the variations are within the permissible limits, the anti-avoidance provisions of Section 50C do not come into play. As we have noted earlier, the CBDT itself accepts that there could be various bonafide reasons explaining the small variations between the sale consideration of immovable property as disclosed by the assessee vis-à-vis the stamp duty valuation for the said immovable property. Obviously, therefore, disturbing the actual sale consideration, fo....
X X X X Extracts X X X X
X X X X Extracts X X X X
...."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-à-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 the scheme of Section 50 C(1), by inserting the third proviso thereto and by enhancing the tolerance band for variations between the stated sale consideration vis-à-vis stamp duty valuation to 10%, are curative in nature, and, therefore, these provisions, even though stated to be prospective, must be held to relate back to the date when the related statutory provision of Section 50C, i.e. 1st April 2003. In plain words, what is means is that even if the valuation of a property, for the purpose of stamp duty val....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e relief accordingly. 10. As we have decided the appeal on the short issue regarding the retrospective effect of the third proviso to Section 50C(1), as elaborated above, we see no need to deal with other issues raised in the appeal before us. As of now, those issues are infructuous and do not call for any adjudication at this stage." 5. My attention was further invited to several other decisions of the ITAT, which had deleted addition made following the proposition laid down by the ITAT in the case of Maria Fernandes Cheryl (supra) in the case of Joseph Mudaliar vs. DCIT, CC-4(3), Mumbai in ITA No.6912/Mum/2019, dated 14.09.2021 and Sri Sandeep Patil vs. ITO in ITA No.924/Bang/2019, dated 09.09.2020, copies of the all the orders were placed before me. 6. Ld. DR relied, however, on the order of the AO though he was unable to bring our notice to any contrary to the decision of either ITAT or any higher judicial authority holding to the contrary as submitted by the Ld. Counsel for the assessee before me. 7. In view of the above, it is patently clear that the amendment to Section 56(2)(x) of the Act enhancing the limit from 5% to 10% for the difference in the value o....