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TMI Blog2024 (9) TMI 450X X X X Extracts X X X X X X X X Extracts X X X X ..... ill have no application in the matter. Appeal of the assessee is allowed. - Shri. Aakash Deep Jain, VP And Shri. Vikram Singh Yadav, AM For the Assessee : Shri Tejmohan Singh, Advocate For the Revenue : Shri Vivek Vardhan, JCIT, Sr. DR ORDER PER VIKRAM SINGH YADAV, A.M. : This is an appeal filed by the Assessee against the order of the Ld. CIT(A)/NFAC, Delhi dt. 25/10/2023 pertaining to Assessment Year 2016-17. 2. In the present appeal Assessee has raised the following grounds: 1. That the Ld. Commissioner of Income Tax (Appeals) has erred in passing an ex-parte order without affording a proper opportunity of hearing which is against the Principles of Natural Justice and as such the order passed is arbitrary and unjustified. 2. Without prejudice to the above, the learned Commissioner of Income Tax (Appeals) has erred in law as well as on facts in upholding the addition of Rs. 23,57,085/- made by applying the provisions of section 56(2)(vii)(b) which is arbitrary and unjustified. 3. That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that (rectification) was carried out vide order dt. 9th April 2019 whereby the addition was reduced from Rs. 23,57,085/- t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed copies of various sales deed of the nearby area to justify that the circle rate are higher than the actual rate at that areas. The objection raised by the assessee was at the very later stage of the year and obtaining report from the valuation officer before the time barring date was not possible in his case. Therefore, assessment was completed by making addition of Rs. 23,57,085/-. However, in the interest of justice matter was referred to DVO for valuation. The assessee was also provided liberty keeping in view of the provisions of Section 56(2)(vii)(b) read with Section 155(15) of the Act that necessary amendment in the assessment order shall be made u/s 155(15) after the receipt of the report of the DVO. The Distt. Valuation Officer vide his letter No. 89 dated 05.12.2018 has ascertained the FMV of the property in question to Rs. 1,05,05,791/- as compared to Rs. 99,75,000/- where circle rate was Rs. 1,23,32,085/-. Therefore, keeping in view the detailed report provided by the DVO, the revised computation of the assessee's income tax liability is computed as under: Assessed Income u/s 143(3) Rs. 1,44,95,850/- Less: Addition u/s 56(2)|vii)(b) made into the assessment o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... later in our analysis, this situation needs to be addressed in entirety for the entire period in which such legal provisions had effect, and not for a specific time period only. There is no good reason for holding the curative amendment to be only as prospective in effect. Dealing with a somewhat materially identical situation in the case of Rajeev Kumar Agarwal v. Addl. CIT [2014] 45 taxmann.com 555/149 ITD 363 (Agra) wherein a coordinate bench was dealing with the question whether insertion of a proviso to Section 40(a)(i) to cure intended consequence could have retrospective effect, even though not specifically provided for, and speaking through one of us (i.e. the Vice President), the coordinate bench had, after a detailed analysis of the legal position, observed that, Now that the legislature has been compassionate enough to cure these shortcomings of provision, and thus obviate the unintended hardships, such an amendment in law, in view of the well settled legal position to the effect that a curative amendment to avoid unintended consequences is to be treated as retrospective in nature even though it may not state so specifically, the insertion of second proviso must be given ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , on a conceptual note, is a provision to address capital gains tax evasion on account of understatement of the consideration. Of course, the law provides, under section 50C(2), that wherever an assessee claims that the actual market rate is less than the stamp duty valuation, he can have the matter referred to a Departmental Valuation Officer for the ascertainment of the market value, but then it is a cumbersome procedure and, at the end of the day, every valuation, whether by the departmental valuation officer or under the stamp duty valuation notification, is an estimate, and there can always be bonafide variations, though to a certain limited extent, in these estimations. Unless, therefore, some kind of a tolerance band or a safe harbour provision, in respect of such bonafide variations, is implicit in the scheme of law, the assessees are bound to face undue hardships. The mechanism under section 50C proceeds on the assumption that when the sale consideration is less than the stamp duty valuation, the sale consideration is to be treated as understated. This assumption is, however, laid to rest when the variations between the stated consideration and the stamp duty valuation fig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the stakeholders for enhancement in the tolerance band. Once the Government acknowledged this genuine hardship to the taxpayer and addressed the issue by a suitable amendment in law, the next question was what should be a fair tolerance band for variations in these values. As a responsive Government, which is truly the hallmark of the present Government, even though the initial tolerance band level was taken at 5%, in response to the representations by the stakeholders, this tolerance band, or safe harbour provision, was increased to 10%. There is no particular reason to justify any particular time frame for implementing this enhancement of tolerance band or safe harbour provision. The reasons assigned by the CBDT, i.e., the variation between stamp duty value and actual consideration received can occur in respect of similar properties in the same area because of a variety of factors, including the shape of the plot or location, was as much valid in 2003 as it is in 2021. There is no variation in the material facts in this respect in 2021 vis- -vis the material facts in 2003. What holds good in 2021 was also good in 2003. If variations up to 10% need to be tolerated and need not b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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