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2024 (6) TMI 1271 - AT - Income TaxIssues: 1. Retrospective application of safe harbor limit of 5% under section 50C of the Income Tax Act, 1961. Analysis: The appeal involved a challenge to an order passed by the Assessing Officer for A.Y. 2016-17, where the appellant, engaged in property management, had a property sold for Rs. 90 crores, while the ready reckoner rates valued it at Rs. 91,05,55,000. The Assessing Officer added the difference to the appellant's income under section 50C of the Income Tax Act. The appellant contended that the benefit of the proviso, allowing a variance of up to 5%, should be extended to them, citing a co-ordinate Bench decision. The CIT (A) had denied this benefit, stating that the proviso applied from A.Y. 2019-20 onwards. The Tribunal considered the circumstances and submissions, noting that the difference in this case was less than 5% of the consideration received. Section 50C deems the value assessed by the stamp valuation authority as the full consideration received upon transfer of a property. The Tribunal referred to Circular 8 of 2018 by the CBDT, which rationalized sections related to property transactions, acknowledging variances in values due to factors like location and dimensions. The proviso, introduced in 2018 and later amended in 2020, aimed to provide a safe harbor limit of 5% initially, later increased to 10%. The Tribunal held that the amendment was curative in nature to address unintended consequences of section 50C, making it retrospective. Citing precedents, the Tribunal emphasized that curative amendments are treated as retrospective, even if not explicitly stated. The decision in the case of Maria Fernandes Cheryl was noted, where the retrospective application of the amendment was upheld. Consequently, the appellant was entitled to the benefit of section 50C, and the impugned addition to their income was set aside. In conclusion, the Tribunal ruled in favor of the appellant, allowing the benefit of the proviso under section 50C retrospectively, leading to the setting aside of the addition made by the Assessing Officer.
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