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TMI Blog2022 (4) TMI 1171X X X X Extracts X X X X X X X X Extracts X X X X ..... AY) 2009-10 arises out of the order of Learned Commissioner of Income Tax (Appeals)-13, Chennai dated 22-09-2020 in the matter of assessment framed by Ld. Assessing Officer [AO] u/s. 143(3) of the Act on 30-12- 2011. The grounds raised by the revenue read as under: 1 . Order of CIT(A) is erroneous both on law and facts. 2 Whether the CIT(A) is correct in holding that the proviso to Sec 50 made applicable w.e.f. 01/04/2017 is applicable retrospectively?. 3 Whether the CIT(A) is correct in applying the amended provisions in favour of the assessee which is contrary to the settled legal proposition that while interpreting the beneficial provisions, the same should be interpreted strictly and when there is any ambiguity, it should be done in favour of Revenue? 4 Whether the CIT(A) is correct in holding that capital gains are to computed by considering the fair market value of the property as on date of sale agreement i/e 24/1/2005 and not as per date of registration i.e 5.11.2008 by interpreting provision to sec 50C in a liberal manner though the proviso came into force w.e.f, 01/04/2017 only? As evident, the sole subject matter of revenue s appeal is computatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee, it was noted that agreement to sale was entered on 24.10.2005 and the assessee received cheque payment of ₹ 112.60 Lacs on the date of agreement. Accordingly, Ld. AO was directed to recompute the capital gains based on the value that prevailed on the date of agreement i.e., 24.10.2005 and not on the date of registration after making reference to valuation cell of the department to determine the fair market value. Aggrieved, the revenue is in further appeal before us. 6. We find that the short question that arises for our consideration is whether Ld. CIT(A) was correct in granting the benefit of proviso to Sec.50C(1) to the assessee during this year. This proviso has been inserted by Finance Act, 2016 w.e.f. 01.04.2017. We find that the proviso has been held to be retrospective in nature by Hon ble Madras High Court in CIT V/s Vummudi Amarendran (120 Taxmann.com 171; 28.09.2020) wherein it has been held as under: - 7. Before we proceed to consider as to whether proviso inserted in Section 50C of the Act has to be read retrospective or prospective, we need to point out that the Assessing Officer did not doubt the bona fides of the transaction done by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Stamp Act, guideline value alone is not a factor to determine the value of the property, its worth will not be any higher in the context of assessing the true market value of the properties in question to ascertain whether the transaction has resulted in any offense so as to give a pecuniary advantage to one party or other. 8. Thus, the Assessing Officer could not have based his conclusion solely based on the guideline value which has been held to be only a prima facie rate prevailing in the area to ascertain the true or correct market value and it is not the last word on the subject of market value but only a factor to be taken note of. As pointed out earlier, the genuinity of the transaction done by the assessee was not doubted and the receipt of advance was through banking channel by way of a demand draft. 9. Therefore, in our considered view the Assessing Officer could not have based his finding solely relying upon the guideline value especially when the Assessing Officer is not a person who is computing stamp duty under the provisions of Indian Stamp Act on the Deed of conveyance. Having observed so we need to take note of the next issue would be as to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tive operation from the date of insertion of the said proviso i.e., with effect from Assessment Year 2005-06. It was pointed out that the purpose of the amendment made by the Finance Act 2010 is to solve the anomalies with the instrument of section 40( a )( ia ) of the Act, caused to the bona fide tax payer. It was further held that the amendment even if not given any operation retrospectively, may not materially to be of consequence to the Revenue when the tax rates are stable and uniform or in cases of big assesses having substantial turnover and equally huge expenses and necessary cushion to absorb the effect; however a marginal and medium tax payer who work at low gross product rate and when expenditure becomes subject matter of an order under section 40( a )( ia ) is substantial, can suffer severe adverse consequence if the amendment made in 2010 is not given retrospective operation i.e., from the date of substitution of the provision. Thus, the amendment made by the Finance Act 2010 being curative in nature was held to be retrospective in operation. In the above decision, the Hon'ble Supreme Court took note of the fact that the statutory amendment was being made to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsfer of a capital asset being land or building on both, the value adopted or assessed by the stamp valuation authority for the purpose of payment of stamp duty shall be taken as the full value of consideration for the purposes of computation of capital gains. The Income-tax Simplification Committee (Easwar Committee) has in its first report, pointed out that this provision does not provide any relief where the seller has entered into an agreement to sell the property much before the actual date of transfer of the immovable property and the sale consideration is fixed in such agreement, whereas similar provision exists in section 43CA of the Act i.e. When an immovable property is sold as a stock-in-trade. It is proposed to amend the provisions of section 50C so as to provide that where the date of the agreement fixing the amount of consideration for the transfer of immovable property and the date of registration are not the same, the stamp duty value on the date of the agreement may be taken for the purposes of computing the full value of consideration. It is further proposed to provide that this provision shall apply only in a case where the amount of consideration referred to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view, the decision in Ambattur Clothing Co. Ltd. ( supra ) cannot be applied with the facts and circumstances of the case on hand. 18. Mr. T. Ravikumar, learned counsel is right in a submission that the observations made by the Tribunal qua the decision of the Honble Supreme Court in Vatika Township ( supra ) is incorrect. In fact we find that the Tribunal did not assign any reasons as to why the decision in Vatika Township do not apply to the facts of the case. In fact the decision in Vatika Town Ship should be referred for the purpose as to when a Statute can be treated to be clarificatory and when not?. The legal principle laid down therein ought to have been taken note of by the Tribunal. Therefore, the Tribunal may not be fully right in stating that the judgment in Vatika Township ( supra ) will not be applicable to the facts as the judgment needs to be looked into to consider the legal principle of retrospectivity, retro activity or prospectivity. In any event, the ultimate conclusion arrived at by the Tribunal confirming the above order passed by the CIT(A) cannot be found faulted with. 19. For all the above reasons, the appeal filed by the Revenue is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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