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TMI Blog2024 (6) TMI 674X X X X Extracts X X X X X X X X Extracts X X X X ..... viso exists. As amendment to Section 50C should be applied retrospectively, and the capital gain should be recomputed considering the stamp duty value as on the date of the agreement. Decided against revenue. X X X X Extracts X X X X X X X X Extracts X X X X ..... as on the date of the agreement. 06. The learned Assessing Officer disagreed with the assessee and issued show cause notice on 6th February, 2014. The assessee replied to the same on 11th March, 2014, raising several contentions. The learned Assessing Officer rejected the same and found that stamp duty value should be applied as on the date of conveyance deed wherein the stamp duty value of the property is ₹ 11,76,87,500/- against the sale consideration declared of ₹ 2,72,00,000/- and ₹ 44,60,500/- against the sale consideration disclosed of ₹ 8,70,000/-. He rejected specifically the contention of the assessee that the market value for the purpose of Section 50C of the Act should be taken as on the date of agreement to Sale entered by the assessee in 2006. Consequently, the total income of the assessee was assessed at ₹ 4,96,71,277/- by passing an assessment order under Section 143(3) of the Act dated 20th March, 2014. 07. The assessee preferred an appeal before the learned CIT (A), who passed an order on 12th October, 2023, wherein after obtaining the remand report of the learned Assessing Officer upholding the applicability of Section 50C of the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ely for the A.Y. 2010-11 or not. Now this issue has been decided by the Hon'ble Madrass High Court in case of Vummudi Amarendran (supra), holding 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 the assessee, since the Assessing Officer accepted the fact that the assessee had entered into an Agreement for Sale of the property in question vide Agreement for Sale dated 4-8-2012, wherein agreed sale consideration was Rs. 19 Crores and the assessee had received Rs. 6 Crores by way of account payee cheque on the date of signing the Agreement. This fact was noted by the CIT(A) and held that the Agreement cannot be treated to be ante-dated as the assessee had received Rs. 6 crores as advance on the date of Agreement through banking channel. The only reason for the Assessing Officer to adopt higher value is based upon the guideline value fixed by the State Government. The question would be as to what is the effect of the guideline value fixed by the Government and the purpose behind fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f 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 whether the proviso to Section 50C could be read to be prospective or retrospective. Section 50C(1) proviso reads as follows: "Provided that where the date of the agreement fixing the amount of consideration and the date of registration for the transfer of the capita asset 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.'' 10. Reading of the above proviso would show that the legislature took note of the fact that there are several occasions where the Agreements are entered into between a willing vendor and willing purchaser on an agreed sale consideration, the Agreement is reduced into writing and in many a cases a substantive portion of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 remove undue hardship to the assessee or held to be retrospective. 12. The Hon'ble Supreme Court in Kolkata Export Company took note of the earlier decisions on the same issue in the case of Allied Motors (P.) Ltd. v. CIT [1997] 91 Taxman 205/224 ITR 677, Whirlpool of India Ltd. v. CIT [2000] 245 ITR 3, CIT v. Amrit Banaspati Co. Ltd. [2002] 123 Taxman 74/255 ITR 117 (SC) and CIT v. Alom Enterprises [2009] 185 Taxman 416/319 ITR 306 and held that the new proviso should be given retrospective effect from the insertion on the ground that the proviso was added to remedy unintended consequences and supply an obvious omission. The proviso ensured reasonable interpretation and retrospective effect would serve the object behind the enactment. Thus by taking note of the above decisions, we have no hesitation to hold that the proviso to Section 50C(1) of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 therein, or a part thereof, has been paid by way of an account payee cheque or account payee bank draft or use of electronic clearing system through a bank account, on or before the date of the agreement for the transfer of such immovable property. These amendments are proposed to be made effective from the 1st day of April, 2017 and shall accordingly apply in relation to assessment year 2017-18 and subsequent years.'' 15. Taking note of the above Memorandum, it was pointed out that once a statutory amendment is being made to remove an undue hardship to the assessee or to remove an apparent incongruity, such an amendment has to be treated as effective from the date on which the law, containing such an undue hardship or incongruity, was introduced. The report also referred to the decision in the case of Alom Enterprises (supra). 16. Reverting back to the decisions relied on by the Revenue, t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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