TaxTMI 
TaxTMI 
2026 (2) TMI 1435
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....(A), who has allowed partial relief to the assessee, wherein addition of Rs. 54,66,408/- was deleted and the remaining addition of Rs. 27,33,204/- was upheld and against the said order and findings of the ld CIT(A), the assessee is in appeal before us. 3. During the course of hearing, the Ld.AR submitted that the assessee booked a residential premises along with two other co-owners for undivided portion in equal proportion vide allotment letter dt. 09-12-2015 for a total consideration of Rs. 8,27,54,388/-. It was submitted that payment was made by each of the co-owners in equal proportion of their 1/3rd share. Thereafter, the assessee along with co-owners registered the purchase agreement on 22-09-2016 for purchase value of Rs. 8,27,54,388/-, however, for stamp duty purposes, the value was determined at Rs. 9,09,54,000/- and the AO brought to tax the whole of the differential amount invoking the provisions of section 56(2)(vii)(b) of the Act in the hands of the assessee. It was submitted that the Ld. CIT(A) has already restricted the addition to the extent of the assessee's share amounting to Rs. 27,33,204/-. However, the assessee still being aggrieved by the said action of the ....
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....nd perused the material available on record. We find that identical issue has been decided by the Co-ordinate Bench of the Tribunal (wherein the AM herein was the author) in favour of assessee in the case of Harneet Kaur Baljeet Singh Saluja vs. ITO (in ITA No. 4012/Mum/2025 (AY.2017-18), dt. 31-07-2025), while following the earlier order of the Co-ordinate Bench of the Tribunal in the case of Maria Fernandes Cheryl vs. ITO (supra) as so referred by the Ld.AR. The operative portion of the said order is reproduced hereunder: "8. We therefore find that the limited issue basis which the assessee has been denied the benefit of enhanced tolerance limit of 10% is that the amendment to section 50C applies prospectively and cannot be applied retrospectively and in particular, for the impugned assessment year 2017-18. 9. Heard the Ld. DR and purused the material available on record. We find that it is a consistent position taken by the various Benches of the Tribunal and some of which have been referred to by the assessee before the Ld. CIT(A) that the tolerance limit of 10% which has been brought on the statute from 1st April, 2021 are curative in nature and must be held ....
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....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 same was the path followed by another bench of this Tribunal in the case of Dharmashibhai Sonani Vs ACIT [(2016) 161 ITD 627 (Ahd)] which has been approved by Hon'ble Madras High Court in the judgment reported as CIT Vs Vummudi Amarendran [(2020) 429 ITR 97 (Mad)). The question that we must take a call on, therefore, is as to what is the rationale behind the insertion of the third proviso to Section 50C(1), and if that rationale i....
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....ty 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, for the purpose of computing capital gains, and adopting a notional figure, for that purpose, will not be justified in such cases. On a conceptual note, an estimation of market price is an estimation nevertheless, even if by a statutory authority like the stamp duty valuation authority, and such a valuation can never be elevated to the status of such a precise computation which admits no variations. The rigour of Section 50C(1) was thus....
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....d 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. 1" April 2003. In plain words, what is means is that even if the valuation of a property, for the purpose of stamp duty valuation, is 10% more than the stated sale consideration, the stated sale consideration will be accepted at the face value and the anti-avoidance provisions under section 50C will not be invoked. 8. Once legislature very graciously accepts, by introducing the legal amendments in question, that there were lacunas in the provisions of Section 50 C in the sense that even in the cases of genuine variations between the stated cons....