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TMI Blog2021 (4) TMI 1160X X X X Extracts X X X X X X X X Extracts X X X X ..... T(A), Meerut dated 21.11.2016. The assessee has raised following grounds of appeal:- 1. That on the basis of circle rate in force in July 2011 when the initial payments of ₹ 5,00,000/- 15,00,000/- were received by cheque dt 06-07-2011 18-07-2011 respectively, the provision of section 50C are not even attracted in assessee's case. 2. That the Ld CIT (A) is not justified in law and on facts of the case in issuing enhancement notice by invoking section 50C and directing the AO to rework the capital gains in accordance with the Fair Market value determined by DVO at ₹ 8,89,63,168/- against the actual sales consideration of ₹ 8,78,00,000/- as per sale deed. 3. That the resulting addition of ₹ 11,63,168/- (₹ 8,89,63,168 - 8,78,00,000) in the computation of taxable capital gain in pursuance of direction of Ld CIT (A) being unwarranted and uncalled for under the facts and circumstances of the case be kindly deleted. 4. That the objections raised by the assessee vide its submissions dt 18-11-2016 with reference to valuation report of the DVO vis-a-vis valuation report of the Government approved valuer have not been properly apprec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t rate after considering the location and other factors that may influence the value of the property. In the present case, the DVO has not made any exercise to come to a justifiable conclusion. He further contended that even if it is assumed without prejudice to its contention of the assessee that the value as adopted by the DVO is the correct fair market value. In the light of the judicial pronouncement and even in that event also, Ld.CIT(A) ought not to have adopted the valuation as assessed by the DVO as the difference between the value adopted by the DVO and the value declared by the assessee is lesser than 5%. In support of this contention, Ld. Counsel for the assessee placed reliance on the decision of the Co-ordinate Bench of this Tribunal rendered in the case of Maria Fernandes Cheryl vs ITO [2021] 123 taxmann.com 252 (Mum.-Trib.). 7. On the contrary, Ld. Sr. DR, Sh. Ashok Gautam vehemently opposed these submissions and supported the order of the authorities below. 8. We have heard the rival contentions and perused the material available on record. We find that there is no dispute with regard to fact that fair market value determined by the DVO at ₹ 8,89,63,1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ally, the insertion of second proviso must be given retrospective effect from the point of time when the related legal provision was introduced . Referring to this decision, and extensively reproducing from the same, including the portion extracted above, Hon'ble Delhi High Court, in the case of CIT Vs Ansal Landmark Township Pvt Ltd [(2015) 61 taxmann.com 45 (Del)], has approved this approach and observed that (t)he Court is of the view that the above reasoning of the Agra Bench of ITAT as regards the rationale behind the insertion of the second proviso to Section 40(a)(ia) of the Act and its conclusion that the said proviso is declaratory and curative and has retrospective effect from 1st April 2005, merits acceptance . The same was the path followed by another bench of this Tribunal in the case of Dharmashibhai Sonani Vs ACIT [(2016) 161 ITD 627 (Ahd)] which has been approved by Hon'ble Madras High Court in the judgment reported as CIT Vs Vummudi Amarendran [(2020) 429 ITR 97 (Mad)]. The question that we must take a call on, therefore, is as to what is the rationale behind the insertion of the third proviso to Section 50C(1), and if that rationale is to provide a remedy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d consideration and the stamp duty valuation figure are treated as explained. The insertion of the third proviso to Section 50C(1) provides for this tolerance band with respect to a certain degree of variations between the stamp duty valuation and the stated consideration of an immovable property. In other words, as long as the variations are within the permissible limits, the anti-avoidance provisions of Section 50C do not come into play. As we have noted earlier, the CBDT itself accepts that there could be various bonafide reasons explaining the small variations between the sale consideration of immovable property as disclosed by the assessee vis- -vis the stamp duty valuation for the said immovable property. Obviously, therefore, disturbing the actual sale consideration, for the purpose of computing capital gains, and adopting a notional figure, for that purpose, will not be justified in such cases. On a conceptual note, an estimation of market price is an estimation nevertheless, even if by a statutory authority like the stamp duty valuation authority, and such a valuation can never be elevated to the status of such a precise computation which admits no variations. The rigour o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... What holds good in 2021 was also good in 2003. If variations up to 10% need to be tolerated and need not be probed further, under section 50C, in 2021, there were no good reasons to probe such variations, under section 50C, in the earlier periods as well. We are, therefore, satisfied that the amendment in the scheme of Section 50 C(1), by inserting the third proviso thereto and by enhancing the tolerance band for variations between the stated sale consideration vis- -vis stamp duty valuation to 10%, are curative in nature, and, therefore, these provisions, even though stated to be prospective, must be held to relate back to the date when the related statutory provision of Section 50C, i.e. 1st April 2003. In plain words, what is means is that even if the valuation of a property, for the purpose of stamp duty valuation, is 10% more than the stated sale consideration, the stated sale consideration will be accepted at the face value and the anti-avoidance provisions under section 50C will not be invoked. 8. Once legislature very graciously accepts, by introducing the legal amendments in question, that there were lacunas in the provisions of Section 50 C in the sense that even in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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