2024 (8) TMI 1166 - AT - Income Tax

Applicability of the amendment made in section 50C - retrospective or prospective effect - dispute of valuation of the property for stamp duty purposes - HELD THAT - Based on the set of evidence furnished by the assessee in the proceeding before the ld. CIT(A) has considered the plea of the assessee that the Hon'ble High Court of Rajasthan had decided the matter and directed the stamp duty valuation authority to make assessment of value for the purpose of stamp duty and accordingly Collector (Stamps), Jaipur Circle Third ( Raj.) had assessed the property for the purpose of stamp duty at Rs. 67,81,105/-. The appellant further submitted that after considering the stamp duty value at Rs. 67,81,105/- as determined by Collector (Stamps), Jaipur, the difference between sale consideration and value adopted for the purpose of stamp duty remained only 1.045% (Difference in value Rs 70,105/-, i.e. Stamp duty value Rs. 67,81,105/- minus Sale consideration Rs. 67,11,000/-). Hence it was requested to accept the stated sale consideration i.e. 6711000/- at face value and not to invoke the provisions of section 50C. In this regard the appellant relied on order of Smt. Cheryl Maria Fernandes 2021 (1) TMI 620 - ITAT MUMBAI . The bench noted that the difference in the valuation remain after the direction of the High Court is only 1.04% and therefore, considering the specific exclusion provision which is benefit in nature and ld. CIT(A) has already considered the judicial decisions cited by the assessee has granted the benefit to the assessee. Decided against revenue.

Summary

Issues involved:
1. Applicability of amended section 50C of the Income Tax Act for the assessment year 2013-14.
2. Justification of allowing retrospective benefits to the assessee by directing the AO to consider actual sale consideration of immovable property while calculating LTCG.

Detailed Analysis:
Issue 1: The appeal was filed by the revenue challenging the order of the National Faceless Appeal Centre, Delhi, regarding the applicability of the amended section 50C of the Income Tax Act for the assessment year 2013-14. The dispute arose from the valuation of a property for stamp duty purposes, where different valuations were provided by various authorities. The appellant contended that the amendment to section 50C was effective from 01.04.2019 and should not be applied retrospectively. However, the appellant argued that the amendment was curative in nature and should be allowed retrospectively to mitigate hardships to taxpayers.

Issue 2: The main contention revolved around allowing retrospective benefits to the assessee by considering the actual sale consideration of the immovable property while calculating Long Term Capital Gains (LTCG). The Assessing Officer had initially valued the property based on the stamp duty valuation, leading to a higher taxable income for the assessee. The assessee, supported by judicial decisions, argued that the stamp duty valuation had been finalized by the High Court, and the difference between the sale consideration and stamp duty value was minimal (1.04%). The assessee requested not to invoke the provisions of section 50C and to accept the stated sale consideration. The appellate authority, considering the finality of the stamp duty valuation and the minimal difference, directed the AO to re-compute the LTCG based on the actual sale consideration.

In conclusion, the appellate tribunal dismissed the revenue's appeal, upholding the decision to allow retrospective benefits to the assessee by considering the actual sale consideration for calculating LTCG. The tribunal emphasized the finality of the stamp duty valuation and the minimal difference between the sale consideration and stamp duty value as key factors in granting relief to the assessee.