TaxTMI 
TaxTMI 
2026 (7) TMI 36
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....n Page 4 of the Deed of Settlement, which clearly provides that the retiring partners were required to collect from the prospective purchasers and remit to the firm the common infrastructure and amenities cost of Rs. 3,50,000 per flat and a corpus fund of Rs 50,000 per flat. The aggregate amount of Rs 4,00,000 per flat, being Rs. 3,50,000 plus Rs 50,000, forms an integral part of construction expenses and does not represent any income accrued to the Assessee. Hence, it cannot be treated as income. We pray to consider the facts and merits of the case and allow the Appeal. 3. The brief facts of the case are that the assessee is an individual and had filed his original return of income for Assessment Year 2016-17 on 31.03.2017 declaring total income of Rs. 8,14,50,770/-. The case of the assessee was selected for scrutiny under CASS and assessment was completed under section 143(3) of the Income-tax Act, 1961 ("the Act") on 27.12.2018 determining the total income at Rs. 8,14,94,360/-. Thereafter, reassessment proceedings under section 147 of the Act were initiated by the Learned Assessing Officer ("Ld. AO") and accordingly notice under section 148 of the Act dated 16.03.202....
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....(1) of the Act which was inserted by the Finance Act, 2018 w.e.f. 01.04.2019 and submitted that where the value adopted by the stamp valuation authority does not exceed the prescribed tolerance band of 105% of the actual consideration, the actual consideration received by the assessee should be accepted as the full value of consideration. He also submitted that the Finance Act, 2020 enhanced the tolerance limit from 105% to 110% with effect from 01.04.2021. According to the Ld. AR, the said amendments made by the Finance Act, 2018 and 2020 are curative and beneficial in nature and therefore deserves to be applied retrospectively w.e.f. 01.04.2003 i.e. w.e.f. the date of introduction of section 50C of the Act. The Ld. AR also submitted that since the market value of Rs. 15,25,47,875/- is less than 110% of the actual sale consideration of Rs. 13,99,10,731/-, the actual sale consideration should be accepted for the purpose of computing capital gains. In support of the above contention, reliance was placed by the assessee upon the decision of the Mumbai Bench of the Tribunal in the case of Padmavati Developers Vs. ITO in ITA No.2616/Mum/2026 for Assessment Year 2018-19 dated 22.05.2026....
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....h is to the following effect: "16. We have heard the rival submissions and perused the material available on record. The short issue arising for our consideration is whether the addition of Rs. 11,16,500/- made under section 56(2)(x)(b)(B) of the Act, being the difference between the purchase consideration of Rs. 1,50,00,000/- and the stamp duty value of Rs. 1,61,16,500/-, can be sustained where the variation is admittedly only 7.44% of the purchase consideration. 17. The Assessing Officer has proceeded on the footing that, for A.Y. 2018-19, the tolerance limit of 10% introduced by Finance Act, 2020 was not applicable and that the amendment was prospective. The CIT(A) has also confirmed the said view by holding that the amendment increasing the tolerance limit from 5% to 10% was applicable only from A.Y. 2021-22. The assessee, on the other hand, has submitted that the amendment is curative, beneficial and intended to remove hardship arising from marginal difference between stamp duty value and actual consideration. The assessee has placed reliance on various decisions of the coordinate benches. 18. We find that the issue is squarely covered in favour of t....
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....band limit of 10 % in the impugned assessment year also and thereby deleting the addition of Rs 1,51,20,900/-. 19. The aforesaid decision was thereafter followed by another coordinate bench in the case of Glory Shipmanagement Private Limited(supra). In the said case, the variation between purchase consideration and fair market value was 9.14% and the Tribunal deleted the addition under section 56(2)(x)(b)(B). The relevant findings are as under: 10. Consistent with the view taken by the Tribunal in the above decisions, we hold that the benefit of tolerance band of 10% shall be available to the Appellant for the Assessment Year 2018-19. Since, in the present case, admittedly the variation is purchase consideration and the fair market value is 9.14%, no addition was warranted in terms of Section 56(2)(x)(b)(B)(ii) of the Act. Accordingly, addition of INR 3,86,000/- made by the Assessing Officer, which was confirmed by the CIT(A), is deleted. Accordingly, Ground No. 1 raised by the Appellant is allowed. 20. The coordinate bench in Glory Shipmanagement Private Limited, after reproducing the relevant paras from the decision of Co-ordinate Bench in case of Josep....
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....inciple laid down by the Hon'ble Supreme Court. However, the same judgment also carves out an exception in respect of beneficial and curative provisions. The relevant observations of the Hon'ble Supreme Court are reproduced below: "31. Of the various rules guiding how a legislation has to be interpreted, one established rule is that unless a contrary intention appears, a legislation is presumed not to be intended to have a retrospective operation. The idea behind the rule is that a current law should govern current activities. Law passed today cannot apply to the events of the past... This principle of law is known as lex prospicit non respicit : law looks forward not backward..." 25. The Hon'ble Supreme Court further held: "33. We would also like to point out, for the sake of completeness, that where a benefit is conferred by a legislation, the rule against a retrospective construction is different. If a 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....
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....on the ground that the amendment is prospective from A.Y. 2021-22. The CIT(A) has not pointed out any distinguishing feature in the facts of the present case vis-a-vis the coordinate bench decisions relied upon by the assessee. Judicial discipline requires us to follow the consistent view taken by coordinate benches, particularly where the same provision, same assessment year and identical controversy are involved. 30. In view of the foregoing discussion, we hold that the assessee is entitled to the benefit of 10% tolerance band under section 56(2)(x)(b)(B) of the Act for A.Y. 2018-19. Since the difference between the purchase consideration and stamp duty value is only 7.44%, the addition of Rs. 11,16,500/- made by the Assessing Officer and confirmed by the CIT(A) is directed to be deleted." 8. On perusal of the above, we find that the Tribunal, while dealing with the provisions of section 56(2)(x) of the Act, held that the tolerance band of 5% inserted by the Finance Act, 2018 w.e.f. 1.4.2019 and the enhancement of the tolerance band from 5% to 10% by the Finance Act, 2020 with effect from 01.04.2021 are curative and beneficial in nature and therefore deserves to be ap....