2022 (8) TMI 799 - AT - Income Tax

Addition u/s 43CA - difference between sale value of the flats sold and the stamp duty value of the same - difference was less than 10% - applicability of proviso of section 43CA retrospectively covering the assessment year in question - As contended by the assessee that stamp value was at uniform rate without taking into consideration the peculiar features of a particular property - HELD THAT - If any liability has to be fastened with the assessee tax-payer retrospectively then the statute and the provision must spell out specifically regarding such retrospective applicability. However, if the provision is beneficial for the assessee, in view of the welfare legislation spirit imbibed in the Income-tax Act, such beneficial provision can be applied in a retrospective manner. In the case of the assessee before us for the preceding assessment year i.e. A.Y. 2014-15, the difference of the consideration received from transfer of asset and the value adopted for stamp duty valuation was apparently not less than 10% tolerance margin which has been brought into effect from 1-4-2021 in the first proviso to section 43CA and therefore, the Tribunal in its wisdom had restored the matter to the file of the A.O for fresh adjudication (supra). Before us, admittedly such difference of tolerance margin is less than 10%. Applicability of this proviso of section 43CA retrospectively covering the assessment year in question i.e. A.Y. 2015- 16, from the spirit of Supreme Court decision in Vatika Township Pvt. Ltd. 2014 (9) TMI 576 - SUPREME COURT case is analysed. Now, the intent of the legislature is to provide relief to the assessee in case such difference is less than 10% which has been brought into effect from 01-04-2021 thereby providing benefit to the assessee. This being the beneficial provision therefore will even have retrospective effect and would apply to the present assessment year 2015-16. If 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 would be that such legislation, giving it a purposive construction, would warrant it to be given a retrospective effect . The net effect of this judgment is that if a fresh benefit is provided by the Parliament in an existing provision, then such an amendment should be given retrospective effect. Therefore, even without going into the merits of the case by the application of first proviso to section 43CA having retrospective effect, the grounds of appeal of the assessee stands allowed.

Summary

Issues:
1. Interpretation of Section 43CA of the Income-tax Act, 1961 regarding deemed income on property transfer.
2. Retrospective application of the 10% margin proviso in Section 43CA to prior assessment years.
3. Analysis of relevant case laws and judicial decisions for retrospective applicability of tax provisions.

Analysis:
1. The case involved an appeal by the assessee against an addition made by the Assessing Officer (A.O) under Section 43CA of the Income-tax Act, 1961. The A.O added the difference between the consideration received for property transfer and the stamp duty value as deemed income. The assessee contended that the A.O ignored property-specific features and the difference was less than 10%, thus not warranting an addition.

2. Section 43CA states that if the consideration received for property transfer is less than the value assessed for stamp duty, the difference is taxed as deemed income. The proviso added a 10% margin from April 1, 2021. The question arose whether this amendment applied retrospectively to prior assessment years. The Tribunal considered precedents, including a Pune Tribunal decision, but found no direct decision on the retrospective application of the proviso.

3. The Tribunal referred to the Supreme Court's doctrine on retrospective applicability of tax provisions, citing the Vatika Township Pvt. Ltd. case. The Court emphasized that a statute must clearly indicate retrospective application for tax imposition. However, if a provision benefits the assessee, it can have retrospective effect. The Tribunal applied this principle to the case, finding that the 10% margin proviso in Section 43CA, being beneficial, applied retrospectively to the assessment year in question, providing relief to the assessee.

4. Citing a Pune Tribunal decision in another case, the Tribunal highlighted that if legislation confers a benefit without inflicting detriment, it warrants retrospective effect. Therefore, without delving into the case's merits, the Tribunal allowed the assessee's appeal based on the retrospective application of the beneficial provision in Section 43CA. The judgment concluded by allowing the appeal of the assessee, emphasizing the retrospective application of the 10% margin proviso to provide relief.

This detailed analysis of the judgment highlights the interpretation of Section 43CA, the retrospective application of tax provisions, and the Tribunal's decision to allow the assessee's appeal based on the beneficial provision's retrospective effect.