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TMI Blog2023 (3) TMI 1539X X X X Extracts X X X X X X X X Extracts X X X X ..... e ld. AO in the assessment falls below the tolerance band of 10% and hence, by applying the proviso to Section 43CA of the Act, no addition is required to be made in the instant case u/s. 43CA. Thus the amendment made to section 43CA is retrospective in nature. Accordingly, as per the proviso the percentage range up to 10% are outside the provisions of section 40CA of the Act . Accordingly, Sl. No. 3, 4 5 8 are outside the provisions of this section considering the fact the difference is less than 10%. In Sl. No. 9 for Flat No. 302 the difference is 10.06% which is near to the specified limit fixed at 10%, since the difference is very meager we direct the Assessing Officer to exclude Sl. No. 9 also. We are inclined to partly allow the ground raised by the assessee. - SHRI AMIT SHUKLA, HON'BLE JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, HON'BLE ACCOUNTANT MEMBER For the Assessee : Shri Akshay Jain For the Department : Shri Ashish Kumar ORDER PER S. RIFAUR RAHMAN (AM) 1. This appeal is filed by the assessee against order of the Learned Commissioner of Income Tax (Appeals), Pune-11 [hereinafter in short Ld.CIT(A) ] dated 10.06.2022 for the A.Y. 2014-15. 2. Brief facts of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,000 1,000 TOTAL 7,49,33,000 6,74,18,160 75,14,840 4. In response, to the above show cause notice assessee has submitted that the section 43CA came into effect from 01.04.2013 and it is applicable for flats sold and documents registered on or after 01.04.2013. The assessee has submitted that the properties were already allotted to the parties prior to 01.04.2013. Therefore, provisions of section 43CA is not applicable and it has given a detailed submissions in this regard. 5. After considering the submissions made by the assessee Assessing Officer by relying on the provisions of section 43CA and he observed that on further verification of additional details and evidence submitted by the assessee, he observed that provisions of section 43CA of the Income Tax Act are not applicable to the flats mentioned at Serial No. 1 to 3 of the show cause notice, however, he observed that flats mentioned at Serial No. 4 to 19 of the above said show cause notice the provisions of section 43CA are applicable on these flats and the difference in the sale consideration and stamp duty valuation, the amount of ₹. 27,81,340/- is treated as income of the assessee for the current Assessment Year. 6. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. The provisions of sec. 50C(2) of the Act provides that where the assessee claims before the Assessing Officer that the value adopted or assessed or assessable by the stamp valuation authority exceeds the fair market value of the property, the Assessing Officer may refer the matter to the valuation officer. In the present case, the submissions filed before the Assessing Officer as reproduced in the assessment order, nowhere suggests that the appellant made a claim before the Assessing Officer that the flats sold had market value lower than the value adopted by the stamp valuation authority. In fact, the claim of the appellant before the Assessing Officer was that in order to generate cash flow, it sold the flats by taking immediate/one stroke payment which had led to agreement value lower than the market value. Thus, before the Assessing Officer the appellant has agreed that market value of flats was not lower than the value adopted by the stamp valuation authorities but the contention was that it sold flats at a lower value in order to generate cash flow 7.2 Moreover, a perusal of chart reproduced in the assessment order clearly suggests that almost all flats are situated in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the DVO was less than 10% and should be ignored. 8.2 I have considered this argument of the appellant and the provisions of the Act. It is seen that w.e.f. 01/04/2019, proviso to sec. 43CA(1) was inserted which provided that where the value adopted for the purpose of stamp duty does not exceed 105 percent of the consideration received, the considerations so received shall be deemed to be full value of the consideration. The appellant has argued that the provisions of sec. 50C and the provisions of sec. 43CA are parimateria and in the context of sec, 50C of the Act, various benches of Hon. Tribunal have held that the said proviso is retrospective. In this connection, the appellant has relied on the decision of Hon'ble ITAT Kolkata bench in the case of Chanderprakash Jhunjhunwala vs DCIT ITA No. 2351/Kol/2017. A perusal of said decision suggests that the Hon'ble ITAT has held that the third proviso to section 50C of the Act is declaratory and curative in nature and the said amendment should be retrospective in nature. However, it may be mentioned that at the time of introduction of the said proviso, the tolerance limit provided in the statute was 5% which was later enhan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowing the proposition that the proviso to sec. 43CA(1) should be applied retrospectively, only this flat can be excluded. Therefore, the addition made by the Assessing Officer for all remaining 8 flats is upheld. In this manner the appellant gets a relief of Rs. 2,24,240/- (1,98,000+ 26,240). The remaining addition of Rs. 25,57,100/- is upheld. The ground No. 1 raised by the appellant is PARTLY ALLOWED. 8. Aggrieved assessee preferred appeal before us raising following grounds in its appeal: -. 1. On the facts and circumstances of the case and in law, Ld. CIT (A) erred in upholding the addition of the Ld. A.O. to the extent of Rs. 2,32,000/- on the ground of violation of provision of section 40A(3) being aggregate of payment made to the labour contractors. That on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in confirming the action of the Ld. A.O. by making an addition of Rs. 25,57,100/- under section 43CA and in adding the same to the total income of appellant-assessee. 2. That on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in upholding the Ld. A.O.'s action in rejecting the valuation of property as adopted by the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xtent assessee should be given relief. 11. On the other hand, Ld.DR relied on the orders of the lower authorities. 12. Considered the rival submissions and material placed on record, we observe from the submissions made by the Ld. AR that assessee has sold various flats and the sale consideration declared by them and registered stamp duty are different having a difference between 5.37% to 28.7%. The same is disclosed in the chart at Page No. 7 of the Ld.CIT(A) order. Ld.AR made a submissions that the amendment made to section 43CA are retrospective in nature and in this regard he relied on the decision of the Shri Harish H Gandhi v. ACIT (supra) for the sake of clarity it is reproduced below:- 3.3. But we find that there is a proviso introduced by the Finance Act 2018 w.e.f. A.Y. 2019-20 onwards and which was later amended by the Finance Act 2020 applicable from A.Y. 2021-22, which states that if the difference between the stamp duty value and the reported sale consideration is not more than 10% then, the reported sale consideration shall have to be accepted and no addition in terms of 43CA is required to be made. We find that this amendment has been held to be retrospective in ope ..... X X X X Extracts X X X X X X X X Extracts X X X X
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