9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (4) TMI 1171 - AT - Income TaxComputation of capital gains - whether Ld. CIT(A) was correct in granting the benefit of proviso to Sec.50C(1) to the assessee during this year? - HELD THAT - This proviso has been inserted by Finance Act, 2016 w.e.f. 01.04.2017. We find that the proviso has been held to be retrospective in nature by Hon ble Madras High Court in CIT V/s Vummudi Amarendran 2020 (10) TMI 517 - MADRAS HIGH COURT In the present case, the genuineness of sale agreement is not in doubt and the earlier payments have been received through cheques. Therefore, respectfully following the binding judicial precedent, we confirm the impugned order and dismiss the appeal of the revenue.
Issues Involved:
1. Whether the CIT(A) correctly held that the proviso to Section 50C, applicable from 01/04/2017, is retrospective. 2. Whether the CIT(A) correctly applied the amended provisions in favor of the assessee. 3. Whether the capital gains should be computed based on the fair market value on the date of the sale agreement or the date of registration. Detailed Analysis: Issue 1: Retrospective Application of Proviso to Section 50C The primary issue was whether the proviso to Section 50C(1) of the Income Tax Act, inserted by the Finance Act, 2016 and effective from 01/04/2017, should be applied retrospectively. The CIT(A) held that the proviso is retrospective, allowing the value adopted by the stamp duty valuation authority on the date of the agreement to be considered for computing full value of consideration. This view was supported by the Hon'ble Madras High Court in CIT V/s Vummudi Amarendran, where it was held that the proviso is curative and should be applied retrospectively to alleviate undue hardship to the assessee. Issue 2: Application of Amended Provisions in Favor of the Assessee The CIT(A) applied the amended provisions in favor of the assessee, noting that the amendment was curative in nature and aimed at addressing discrepancies similar to those in Section 43CA. The assessee entered into an agreement on 24/10/2005 and received a cheque payment on the same date. The CIT(A) directed the AO to recompute the capital gains based on the value on the agreement date, not the registration date. The Tribunal upheld this view, emphasizing that the amendment was intended to provide relief from undue hardship. Issue 3: Computation of Capital Gains The AO initially computed the capital gains based on the registration date's value, significantly increasing the assessed amount. However, the CIT(A) and subsequently the Tribunal held that the capital gains should be computed based on the fair market value on the date of the sale agreement. The genuineness of the sale agreement was not in doubt, and the payments were received through cheques. The Tribunal cited the Hon'ble Supreme Court's decision in CIT v. Calcutta Export Co., which supported the retrospective application of amendments intended to remove undue hardship. Conclusion: The Tribunal concluded that the CIT(A) correctly applied the proviso to Section 50C retrospectively, favoring the assessee. The capital gains should be computed based on the fair market value on the date of the sale agreement, not the registration date. The appeal by the Revenue was dismissed, affirming the CIT(A)'s order and following the binding judicial precedent. The decision emphasized the curative nature of the amendment and its retrospective application to ensure fair treatment of the assessee. The appeal was dismissed, and the order was pronounced on 22nd March, 2022.
|
