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TMI Blog2024 (9) TMI 1700X X X X Extracts X X X X X X X X Extracts X X X X ..... 2016-17. 2. In this appeal, the assessee has raised the following grounds: - "1) In the facts and circumstances of the case, the Assessment Unit-NFAC has erred in making an addition of Rs.7,37,505/- even though the difference between the market value as per Stamp Duty Authority and Agreement value was 3.79 percent. 2) In the facts and circumstances of the case the Assessment Unit-NFAC has not considered the amendment brought in by the Finance Act, 2018 which provided for relief of 5% between the SDA value and Agreement value which was applicable retrospectively and not prospectively as held by several Income Tax Appellate Tribunals. 3) In the facts and circumstances of the case and in law, National Faceless Appeal Centre/ CIT(A) has passed the ex-parte order on 26/07/2024 in haste without giving any opportunity of hearing. The notice dated 06/06/2024 was not received and the notice dated 11/07/2024 sent by NFAC has gone to the spam folder and hence could not be responded to. Adjournment to the third notice dated 19/07/2024 could not be sought on account of C.A. being caught up with return filing deadline. 4) In the facts and circumstances of the case and in law, Nationa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ifference between the sale consideration and the stamp duty value of the said property. 4. The learned CIT(A), vide ex parte impugned order, dismissed the appeal filed by the assessee and confirmed the addition of ₹ 7,37,505 made by the AO by applying the provisions of section 43CA of the Act. Being aggrieved, the assessee is in appeal before us. 5. Before proceeding further, it is pertinent to note the relevant provisions of section 43CA of the Act, as existing during the year under consideration, and the same reads as follows: - "Special provision for full value of consideration for transfer of assets other than capital assets in certain cases. 43CA. (1) Where the consideration received or accruing as a result of the transfer by an assessee of an asset (other than a capital asset), being land or building or both, is less than the value adopted or assessed or assessable by any authority of a State Government for the purpose of payment of stamp duty in respect of such transfer, the value so adopted or assessed or assessable shall, for the purposes of computing profits and gains from transfer of such asset, be deemed to be the full value of the consideration received or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is prospective in its application. 9. We find that the coordinate bench of the Tribunal in Maria Fernandes Cheryl v/s ITO, reported in [2021] 123 taxmann.com 252 (Mum.-Trib) held that amendment made in scheme of section 50C(1), by inserting third proviso thereto and by enhancing tolerance band for variations between stated sale consideration vis-à-vis stamp duty valuation from 5% to 10% are effective from the date on which section 50C, itself was introduced, i.e. 1-4-2003. The relevant findings of the coordinate bench, in the decision mentioned above, are reproduced as follows: - "7. These submissions, however, do not impress us. As noted by the Central Board of Direct Taxes circular # 8 of 2018, explaining the reason for the insertion of the third proviso to Section 50C(1), has observed that "It has been pointed out that 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". Once the CBDT itself accepts that these variations could be on account of a variety of factors, essentially bonafide factors, and, for this reas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 27 which has been approved by Hon'ble Madras High Court in the judgment reported as CIT v. VummudiAmarendran [2020] 120 taxmann.com 171/429 ITR 97]. 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 for unintended consequences of the main provision, we must hold that the third proviso to section 50C(1) comes into force with effect from the same date on which the main provision, unintended provisions of which are sought to be nullified, itself was brought into effect. Let us understand what the nature of the provisions of section 50C is. In terms of this provision, if the property is sold below the stamp duty valuation rate, which is often called circle rate, this stamp duty valuation report is assumed as sale consideration for the property in question, and, accordingly, capital gains tax is levied. This deeming fiction to substitute apparent sale considerations by notional consideration computed on the basis of a stamp duty valuation rate, was thus to address the issue with respect to potential evasion of taxes by understating the sale cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 of Section 50C(1) was thus relaxed, and very thoughtfully so, to take these bonafide cases of small variations between the stated sale consideration vis-à-vis stamp duty valuation, out of the scope of adjustments contemplated in the computation of capital gains under this anti-avoidance provision. In our humble understanding, it is a case of a curative amendment to take care of unintended consequences of the scheme of Section 50C. It makes perfect sense, and truly reflects a very pragmatic approach full of compassion and fairness, that just because there is a small variation between the stated sale consideration of a property and stamp duty valuation of the same property, one cannot proceed to draw an inference against the assessee, and subject the assessee to practically prove his being truthful in stating the sale consideration. Clearly, therefore, this insertion of the third proviso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alue 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 50C in the sense that even in the cases of genuine variations between the stated consideration and the stamp duty valuation, anti-avoidance provisions under section 50C could be pressed into service, and thus remedied the law, there is no escape from holding that these amendments are effective with effect from the date on which the related provision, i.e., Section 50C, itself was introduced. These amendments are thus held to be retrospective in effect. In our considered view, therefore, the provisions of the third proviso to Section 50C (1), as they stand now, must be held to be effective with effect from 1st April 2003. We order accordingly. Learned Departmental Representative, however, does not give up. Learned Departmental Representative has suggested that we may mention in our order that "relief is being provided as a special case and this decision may not be considered as a precedent". Nothing can be farther from a judicious approach to the process of d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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