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TMI Blog2020 (10) TMI 517X X X X Extracts X X X X X X X X Extracts X X X X ..... ere is an Agreement for Sale, agreeing to sell the property at ₹ 19 Crores and a sum of ₹ 6 Crores has been received as advance sale consideration. The proviso to Section 50C(1) deals with cases where the date of the agreement, fixing the amount of consideration and the date of registration for the transfer of the capital assets are not the same, the value adopted or assessed or assessable by the stamp valuation authority on the date of agreement may be taken for the purposes of computing full value of consideration for such transfer. Thus an amendment by insertion of proviso seeks to relieve the assessee from undue hardship. No hesitation to hold that the proviso to Section 50C(1) of the Act should be taken to be retrospective from the date when the proviso exists. The assessee's consistent case was that the sale consideration agreed to be paid to him by the purchaser was ₹ 19 crores and ₹ 6 crores was received as advance on the date of entering into the Agreement for Sale. AO disbelieved the same and applied the guideline value at ₹ 27 crores on the date when the Sale Deed was executed and registered. - Decided against revenue. - T.C.A.No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and in terms of the conditions contained therein, the assessee had received a sum of ₹ 6 Crores as advance consideration and the same was effected by Cheque payment by the purchaser. The Assessing Officer found that on the date of execution and registration of the Sale Deed i.e., on 02.05.2013, the guideline value of the property as fixed by the State Government was ₹ 27 Crores. Thus, the Assessing Officer came to the conclusion that since the assessee had not parted with possession and had received only ₹ 6 Crores as advance which was not disclosed during the relevant financial year, held that the Agreement for Sale cannot be regarded as a transfer for the purpose of Section 2(47)(V) of the Act. The assessee while computing Capital Gain had taken the sale consideration for the property at ₹ 19 crores. This according to the Assessing Officer was not a full value of consideration because on the date when the property was sold, i.e., date on which the Deed of conveyance was executed and registered, the guideline value was much higher than the agreed sale price and therefore, the said amount should be reckoned for all purposes as a full value of consideration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... immovable property. It is submitted that CBDT has clarified that the amendment shall take effect from 01.04.2017 and would accordingly apply from assessment year 2017-18 and subsequent years. Further it is submitted that the language of the proviso is clear and it does not indicate it is either clarificatory to be held to argue that the proviso would have retrospective effect . Reliance was placed on the decision of the Hon'ble Supreme Court in the case of Commissioner of Income Tax, (Central)-1, New Delhi Vs. Vatika Township Private Limited [2014 (367) ITR 466 (SC)] and our attention was drawn to paragraph no.39 of the judgment, in support of his contention that the Statute has to be held to be prospective from the date fixed by the legislature. 6. Reliance was also placed on the decision of the High Court of Calcutta in the case of Bagri Impex (P.) Ltd., Vs. Assistant Commissioner of Income-tax, Circle-9, Kolkata;2013 (31) Taxmann.com 39 (Calcutta), in support of his contention that where the date of Sale was registered in the year, subsequent to the year in which consideration was received, applying Section 50(C) of the Act, value assessed by stamp valuation aut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... guideline value has relevance only in the context of Section 47A of the Indian Stamp Act (as amended by Tamil Nadu Act 24 of 1967) which provides for dealing with instruments of conveyance which are undervalued. The guideline value is a rate fixed by the authorities under the Stamp Act for the purpose of determining the true market value of the property disclosed in an instrument requiring payment of stamp duty. Thus the guideline value fixed is not final but only a prima facie rate prevailing in an area to ascertain the true or correct market value. It is open to the Registering Authority as well as the person seeking registration to prove the actual market value of the property. The authorities cannot regard the guideline valuation as the last word on the subject of market value but only a factor to be taken note of, if at all available in respect of an area in which the property transferred lies . It was further pointed out that this position is made clear in the explanation to Rule 3 of the Tamil Nadu Stamp (Prevention of Under valuation of Instruments) Rules, 1968; this explanation also will have to be read in conjunction with explanation to Section 47(A) of the Indian Stamp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent. There are other types of transaction where the vendor executes Power of Attorney in favour of the intending purchaser empowering him to sell the property at any time he proposes to do so. In fact this was also a subject matter of consideration, when the legislature though to introduce the amendment to Section 50C of the Act. There may be cases where the sale consideration will be taken as deferred payment subject to certain contingencies. However the case on hand is very straight forward case, where there is an Agreement for Sale, agreeing to sell the property at ₹ 19 Crores and a sum of ₹ 6 Crores has been received as advance sale consideration. The proviso to Section 50C(1) of the Act deals with cases where the date of the agreement, fixing the amount of consideration and the date of registration for the transfer of the capital assets are not the same, the value adopted or assessed or assessable by the stamp valuation authority on the date of agreement may be taken for the purposes of computing full value of consideration for such transfer. Thus an amendment by insertion of proviso seeks to relieve the assessee from undue hardship. 11. The Hon'ble Supreme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te when the proviso exists. The CIT(A) while allowing the assessee's appeal vide order dated 25.07.2019, took note of the submissions made by the assessee wherein they placed reliance on the decision of the Ahmadabad Bench of the Tribunal in the case of Dharamshi bhai Sonani Vs. ACIT [2016 75 taxmann.com 141 (Ahmedabad- Trib)] ; order of the Delhi Bench of the ITAT in the case of Income Tax officer Vs. Modipon Limited [2015 (57) taxmann.com 360 (Delhi Tribunal)]. 13. On a reading of the order passed by the CIT(A), it is interesting to note the report submitted by the Income Tax Simplification Committee set up in 2015, headed by a Former Judge of the High Court, Delhi. 14. Mr.T.Ravikumar, learned Senior Standing Counsel is right in a submission that this report is not binding or cannot be taken to have a statutory force. Nevertheless Simplification Committee was consisted of experts in the field of taxation and it would be worthwhile and interesting to note as to why they have considered the insertion of the proviso to Section 50(C) of the Act should be held to be retrospective; In the report there is an extract of Memorandum explaining provisions of Finance Bill 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enue, the decision in Bagri Impex (P.) Ltd., supra is distinguishable on facts as the assessee therein contended that the date of agreement should be taken as date on which the property was transferred by bringing the same within the ambit of Section 2(47) of the Act, which is not the case before us. In Ambattur Clothing Company Limited, the assessee contended that since the buyer wanted the Sale Deed to be released after registration, they had paid stamp duty as per the guideline value which is higher than the sale consideration agreed to be paid on the instruments. This explanation offered by the assessee was found to be factually incorrect and rejected and in the background of the said facts, the Honble Supreme Court observes that the Assessing Officer was justified in treating the value adopted by the stamp valuation authority as the deemed sale consideration, received / accruing as a result of transfer. 17. On going through the facts of the case on hand, we find that no such observation was made by the Assessing Officer. The assessee's consistent case was that the sale consideration agreed to be paid to him by the purchaser was ₹ 19 crores and ₹ 6 c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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