Dulari Devi Hetamsaria, Legal heir of Late Shyam Sunder Hetamsaria, Ranchi V. ACIT, Circle - 3, Asansol, Asansol

ITA 1290/KOL/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 0704 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-06-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2008-2009
• Appeal Filed On: 12-06-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUPRIYO PAUL
• Assessee Lawyers: K M ROY
• Keywords: Unexplained investment; Sale consideration of property below Jantri Value; Business income; Retrospective amendment; Valuation report; Assessment record
• Section: 43B; 143(3); 50C; 205; 43; 22; 69; 28

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C, BENC H KOLKATA BEFORE SHRI S.S.GODARA, JM &DR. A.L.SAINI, AM ./ITA NO.1290/KOL/2018 ( / ASSESSMENT YEAR:2008-09) DULARI DEVI HETAMSARIA (L/H OF SHYAM SUNDAR HETAMSARIA) C/O, M/S PRATIK AUTOMOBILES, OLD H. B. ROAD, NEAR GOVERNMENT BUS STAND, PATEL CHOWK, RANCHI, JHARKHAND- 834001. VS. ACIT, CIRCLE-3, ASANSOL ./ ./PAN/GIR NO.: AASPH 9789 F (APPELLANT) .. (RESPONDENT) APPELLANT BY : SHRI K. M . ROY, FCA RESPONDENT BY :SHRI SUPRIYO PAUL, JCIT / DATE OF HEARING : 27/02/2020 /DATE OF PRONOUNCEMENT : 12/06/2020 / O R D E R PER DR. A.L. SAINI, AM: THE CAPTIONED APPEAL FILED BY THE ASSESSEE, PERT AINING TO ASSESSMENT YEAR 2008-09, IS DIRECTED AGAINST THE ORDER PASSED BY TH E COMMISSIONER OF INCOME TAX (APPEAL)-ASANSOL, IN APPEAL NO. 16/CIT(A)/ASL/CIR-3 /ASL/17-18, WHICH IN TURN ARISES OUT OF AN ASSESSMENT ORDER PASSED BY THE ASS ESSING OFFICER U/S 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) DATED 29/12/2010. DULARI DEVI HETAMSARIA ITA NO. 1290/KOL/2018 ASSESSMENT YEAR:2008-09 P PP PA AA AG GG GE EE E | || | 2 22 2 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE AS FOLLOWS: 1. THAT THE LD. ASSESSING OFFICER IS NOT JUSTIFIED IN SENDING THE MATTER TO VALUATION OFFICER TO FIND THE VALUE IN BUILDING AND THE LD. CIT(APPEALS) IS NOT JUSTIFIED IN AGREEING TO THE VIEW OF THE LD. ASSESSING OFFICER. 2. THAT THE LD. ASSESSING OFFICER IS NOT JUSTIFIED IN SENDING THE MATTER TO VALUATION OFFICER TO FIND THE VALUE IN BUILDING WIT HOUT REJECTION OF THE BOOKS OF ACCOUNTS AND POINTING OUT SPECIFICALLY IN WHICH YEAR THE VALUATION IS ABOVE BOOK VALUE. 3. BRIEF FACTS QUA THE ISSUE ARE THAT AS PER VALUAT ION REPORT OF THE VALUATION OFFICER (DVO), THE VALUE OF THE BUILDING (ASSET) WAS TO THE TUNE OF RS. 1,76,55,900/- AS AGAINST RS.1,66,52,805/- SHOWN BY THE ASSESSEE. LEA RNED CIT(A) WAS OF THE VIEW THAT ASSESSEE HAS INVESTED AN AMOUNT OF RS. 1,76,55 ,900/-, AS REPORTED BY DVO AS AGAINST RS. 1,66,52,805/- SHOWN BY THE ASSESSEE IN RETURN OF INCOME. THEREFORE, THE EXCESS INVESTMENT OF RS. 10,03,095/- (1,76,55,9 00 1,66,52,805) WAS TREATED BY THE LD. CIT(A) AS AN UNEXPLAINED INVESTMENT U/S 69 OF THE ACT AND THE SAID AMOUNT HAD BEEN ENHANCED BY THE LD. CIT(A) OBSERVIN G THE FOLLOWING: THE ASSESSING OFFICER VIDE REMAND REPORT NO. ACIT/ CIR-3/ASL/2011- 12/AASPH9787M/12 DT. 18.04.2012 FURTHER STATED AS U NDER: ASSESSMENT UNDER SECTION 143(3) OF THE ACT FOR THE A.Y. 2008-09 WAS COMPLETED ON 29.12.2010 AT RS. 1,48,99,130/- AGAINST RETURNED I NCOME OF RS. 10,17,810/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS FOR THE SAID ASSESSMENT YEAR A REFERENCE UNDER SECTION 142A/131 (D) OF THE INCOME TAX ACT, 1961 TO THE DIVISIONAL VALUATION OFFICER, RAFI AHMED KIDWAI ROA D, 2ND FLOOR, ROOM NO. 07, KOLKATA-700016 HAS BEEN MADE VIDE THIS OFFICE LETTE R NO. DCIT/CIRCLE- 3/ASL/2010-11/VO/534 DTD. 22.12.2010 TO VALUE THE C OST OF CONSTRUCTION OF HOUSE BUILDING/SHOWROOM. THE ASSESSEE HAS SHOWN THE TOTAL INVESTMENT IN THE SAID PROPERTIES AT RS.75,50,406/- IN THE SCHEDULE-4 OF T HE BALANCE SHEET AS ON 31.03.2008. THE VALUATION OFFICER HAS SENT THE DOSSIER OF VALUA TION REPORT OF THE PROPERTIES TO THIS OFFICE FILE NO-20/EE/VAL/RANCHI/IT/2010-11/203 DATED 06.06.2011 (I.E. AFTER COMPLETION OF ASSESSMENT UNDER SECTION 143(3) FOR T HE A.Y. 2008-09) ASSESSING THE VALUE OF THE ASSETS AT RS. 1,76,55,900/-. IN VIEW OF THE ABOVE, THE VALUATION REPORT OF THE P ROPERTIES OF THE ASSESSEE MAY EFFECT THE ASSESSMENT MADE UNDER SECTION 143(3) ON 29.12.2010. MORE SO, AS THE CASE IS PENDING IN APPEAL BEFORE YOUR HONOUR, THE V ALUATION DOSSIER SENT BY THE VALUATION OFFICER TO THIS OFFICE IS ENCLOSED NECESSARY FURTHER ACTION. IT IS IM PLIED THAT THE PURPOSE OF THE REPORT IS FOR ENHANCE MENT OF INCOME. TO TAKE A DECISION IN THIS REGARD CLARIFICATION WAS SOUGHT BY THIS OFFICE FROM THE ASSESSING OFFICER REGARDING : - A) EXTENT OF ENHANCEMENT, B) REASONS C) COPY OF REASONS RECORDED TO MAKE REFERENCE TO DVO. IN RESPONSE, ASSESSING OFFICER REPORTED AS UNDER: IN THE INSTANT CASE, DURING THE COURSE OF ASSESSME NT PROCEEDINGS FOR THE A.Y. 2008- 09 REFERENCE UNDER SECTION 142A/131 (D) OF T DIVISIONAL VALUATION OFFICER, KOLKATA HAS BEEN MADE VIDE THIS OFFICE LETTER NO. DCIT/CIRCLE- 3/ASANSOL/2010 CONSTRUCTION OF HOUSE BUILDING/SHOW ROOM (COPY OF T HE LETTER HAS ALREA SENT). THE DVO HAS SENT THE DOSSIER OF VALUATION REPORT OF THE PROPERTIES TO THIS OFFICE VIDE FILE NO. 20/EE/VAL/RANCHI/IT/2010 COMPLETION OF ASSESSMENT UNDER SECTION 143 COMPARATIVE CHART SHOWING VALUE OF THE ASSET ASSESSED BY THE DV O AND DECLARED BY THE ASSESSEE IS TABLED ASUNDER: HENCE THE DIFFERENCE AMOUNT OF RS. 10,03,095/ ASSESSEE AND ASSESSMENT MAY BE ENHANCED TO THAT AMO UNT. ON VERIFICA TION OF ASSESSMENT RECORD, NO SUCH RECORDED REASONS BEFORE MAKING REFERENCE TO THE DVO HAVE BEEN FOUND. THE ABOVE VALUATION REPORT BY THE DVO SHOWS THAT TH E APPELLANT HAS INVESTED AN AMOUNT OF RS. 1,76,55,900/ SHOWN BY THE APPELLANT. THUS, THERE IS AN VISIBLE E XCESS INVESTMENT OF RS. 10,03,095/- MADE BY THE APPELLANT, WHICH HAS NOT BEEN SHOWN BY THE APPELLANT IN DULARI DEVI HETAMSARIA ITA NO ASSESSMENT YEAR: VALUATION OFFICER TO THIS OFFICE IS ENCLOSED HEREBY FOR YOUR KIND NECESSARY FURTHER ACTION. PLIED THAT THE PURPOSE OF THE REPORT IS FOR ENHANCE MENT OF INCOME. TO TAKE A DECISION IN THIS REGARD CLARIFICATION WAS SOUGHT BY THIS OFFICE FROM THE ASSESSING - EXTENT OF ENHANCEMENT, IF ANY COPY OF REASONS RECORDED TO MAKE REFERENCE TO DVO. IN RESPONSE, ASSESSING OFFICER REPORTED AS UNDER: - IN THE INSTANT CASE, DURING THE COURSE OF ASSESSME NT PROCEEDINGS FOR THE A.Y. 09 REFERENCE UNDER SECTION 142A/131 (D) OF T HE INCOME TAX ACT, 1961 TO THE DIVISIONAL VALUATION OFFICER, KOLKATA HAS BEEN MADE VIDE THIS OFFICE LETTER NO. 3/ASANSOL/2010 - LL/VO/534 DATED 22.12.2010 TO VALUE THE COST OF CONSTRUCTION OF HOUSE BUILDING/SHOW ROOM (COPY OF T HE LETTER HAS ALREA THE DVO HAS SENT THE DOSSIER OF VALUATION REPORT OF THE PROPERTIES TO THIS OFFICE VIDE FILE NO. 20/EE/VAL/RANCHI/IT/2010 - 11 /203 DATED 06.06.2011 AFTER COMPLETION OF ASSESSMENT UNDER SECTION 143 ( 3) OF THE INCOME TAX ACT, 1961. A CHART SHOWING VALUE OF THE ASSET ASSESSED BY THE DV O AND DECLARED BY THE ASSESSEE IS TABLED ASUNDER: - HENCE THE DIFFERENCE AMOUNT OF RS. 10,03,095/ - IS UNDISCLOSED INVESTMENT OF THE ASSESSEE AND ASSESSMENT MAY BE ENHANCED TO THAT AMO UNT. TION OF ASSESSMENT RECORD, NO SUCH RECORDED REASONS BEFORE MAKING REFERENCE TO THE DVO HAVE BEEN FOUND. THE ABOVE VALUATION REPORT BY THE DVO SHOWS THAT TH E APPELLANT HAS INVESTED AN AMOUNT OF RS. 1,76,55,900/ - AS REPORTED BY THE DVO AS AGAINST RS. 1,66, SHOWN BY THE APPELLANT. THUS, THERE IS AN VISIBLE E XCESS INVESTMENT OF RS. MADE BY THE APPELLANT, WHICH HAS NOT BEEN SHOWN BY THE APPELLANT IN DULARI DEVI HETAMSARIA ITA NO . 1290/KOL/2018 ASSESSMENT YEAR: 2008-09 P PP PA AA AG GG GE EE E | || | 3 33 3 FOR YOUR KIND PERUSAL AND PLIED THAT THE PURPOSE OF THE REPORT IS FOR ENHANCE MENT OF INCOME. TO TAKE A DECISION IN THIS REGARD CLARIFICATION WAS SOUGHT BY THIS OFFICE FROM THE ASSESSING IN THE INSTANT CASE, DURING THE COURSE OF ASSESSME NT PROCEEDINGS FOR THE A.Y. HE INCOME TAX ACT, 1961 TO THE DIVISIONAL VALUATION OFFICER, KOLKATA HAS BEEN MADE VIDE THIS OFFICE LETTER NO. LL/VO/534 DATED 22.12.2010 TO VALUE THE COST OF CONSTRUCTION OF HOUSE BUILDING/SHOW ROOM (COPY OF T HE LETTER HAS ALREA DY BEEN THE DVO HAS SENT THE DOSSIER OF VALUATION REPORT OF THE PROPERTIES TO THIS OFFICE 11 /203 DATED 06.06.2011 AFTER 3) OF THE INCOME TAX ACT, 1961. A CHART SHOWING VALUE OF THE ASSET ASSESSED BY THE DV O AND DECLARED IS UNDISCLOSED INVESTMENT OF THE TION OF ASSESSMENT RECORD, NO SUCH RECORDED REASONS BEFORE MAKING THE ABOVE VALUATION REPORT BY THE DVO SHOWS THAT TH E APPELLANT HAS INVESTED AN AS REPORTED BY THE DVO AS AGAINST RS. 1,66, 52,805/- SHOWN BY THE APPELLANT. THUS, THERE IS AN VISIBLE E XCESS INVESTMENT OF RS. MADE BY THE APPELLANT, WHICH HAS NOT BEEN SHOWN BY THE APPELLANT IN DULARI DEVI HETAMSARIA ITA NO. 1290/KOL/2018 ASSESSMENT YEAR:2008-09 P PP PA AA AG GG GE EE E | || | 4 44 4 HIS BOOKS OF ACCOUNT. IN VIEW OF THIS, I TREAT THE AMOUNT OF RS. 10,03,095/- AS UNEXPLAINED INVESTMENT U/S 69 OF THE I T ACT AND EN HANCE THE INCOME OF THE APPELLANT BY RS. 10,30,095/-. HENCE APPEAL PARTLY A LLOWED. 4. AGGRIEVED BY THE ORDER OF LD. CIT(A) THE ASSESSE E IS IN APPEAL BEFORE US. 5. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY GON E THROUGH THE SUBMISSION PUT FORTH ON BEHALF OF THE ASSESSEE ALONG WITH THE DOCU MENTS FURNISHED AND THE CASE LAWS RELIED UPON, AND PERUSED THE FACT OF THE CASE INCLUDING THE FINDINGS OF THE LD CIT(A) AND OTHER MATERIALS AVAILABLE ON RECORD. WE NOTE THAT AS PER DVO, THE VALUATION OF THE PROPERTY IS AT RS. 1,76,55,900/- W HEREAS AS PER THE ASSESSEE, THE VALUE OF SAID INVESTMENT WAS SHOWN AT RS. 1,66,52,8 05/-. THE DIFFERENCE BETWEEN THE TWO FIGURES IS AT RS. 10,03,095/- (1,78,55,900 -1,66,52,805) THAT IS LESS THAN RS. 16,65,280/-, WHICH IS 10% OF RS. 1,66,52,805/-. TH E LD COUNSEL SUBMITTED BEFORE US THAT SINCE THE DIFFERENCE IN VALUATION IS BELOW 10% THEREFORE IT SHOULD BE IGNORED. WE NOTE THAT THE VARIATION BETWEEN THE VALUE OF DVO AND VALUE SHOWN BY THE ASSESSEE IS LESS THAN 10% AND SUCH VARIATION IN VAL UE MAY BE IGNORED AS HELD BY THE VARIOUS BENCHES OF THE TRIBUNAL.WE RELY ON THE JUDGMENT OF CO-ORDINATE BENCH OF ITAT KOLKATA IN THE CASE OF CHANDRA PRAKAS H JHUNJHUNWALA VS. DCIT IN ITA NO. 2351/KOL/2017 DATED 09.08.2019 WHEREIN THE TRIBUNAL HELD AS FOLLOWS: 10.WE NOTE THAT N OW THE LEGISLATURE HAS BEEN COMPASSIONATE ENOUGH T O CURE THESE SHORTCOMINGS OF PROVISION, AND THUS OBVIATE THE UNI NTENDED 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 STAT E SO SPECIFICALLY. HENCE THE INSERTION OF THIRD PROVISO TO SECTION 50C MUST BE G IVEN RETROSPECTIVE EFFECT FROM THE POINT OF TIME WHEN THE RELATED LEGAL PROVISION WAS INTRODUCED, AS THIS AMENDMENT IS PROCEDURAL ONE TO COMPUTE THE VALUE OF PROPERTY. AT THE COST OF REPETITION, WE AGAIN REPRODUCE THE THIRD PROVISO TO SECTION 50C AS FOLLOWS: THE FOLLOWING PROVISO SHALL BE INS. BY FINANCE ACT, 2018 (W.E.F. 1-4-2019): PROVIDED ALSO THAT WHERE THE VALUE ADOPTED OR ASSESSED OR ASSESS ABLE BY THE STAMP VALUATION AUTHORITY DOES NOT EXCEED ONE HUNDR ED AND FIVE PER CENT OF THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF T HE TRANSFER, THE CONSIDERATION SO RECEIVED OR ACCRUING AS A RESULT OF THE TRANSFER SH ALL, FOR THE PURPOSES OF SECTION 48, BE DEEMED TO BE THE FULL VALUE OF THE CONSIDERA TION. DULARI DEVI HETAMSARIA ITA NO. 1290/KOL/2018 ASSESSMENT YEAR:2008-09 P PP PA AA AG GG GE EE E | || | 5 55 5 WE NOTE THAT THIS THIRD PROVISO RELATES TO DETERMIN ATION OF VALUE OF PROPERTY THEREFORE IT CANNOT BE A SUBSTANTIVE AMENDMENT. NOR MALLY SUBSTANTIVE AMENDMENTS IN LAW IN APPLICABLE PROSPECTIVE. IN VIE W OF THESE DISCUSSIONS, AS ALSO FOR THE DETAILED REASONS SET OUT EARLIER, IT IS A P ROCEDURAL AMENDMENT IN LAW TO HELP THE ASSESSEE TO DETERMINE THE VALUE OR TO COMP UTE THE VALUE OF PROPERTY HENCE THIS AMENDMENT IS NOT TO PUNISH THE ASSESSEE JUST B ECAUSE THERE IS MINOR VARIATION BETWEEN STAMP DUTY VALUE AND THE SALE CONSIDERATION . WE NOTE THAT THE STATUTE SUCH AN AMENDMENT IN LAW, IN VIEW OF THE WELL SETTL ED LEGAL POSITION TO THE EFFECT THAT A CURATIVE AMENDMENT TO AVOID UNINTENDED CONSE QUENCES IS TO BE TREATED AS RETROSPECTIVE IN NATURE EVEN THOUGH IT MAY NOT STAT E SO SPECIFICALLY, FOR THAT WE RELY ON THE JUDGMENT OF THE HON`BLE SUPREME COURT I N THE CASE OF ALOM EXTRUSIONS LTD 185 TAXMAN 416 (SC) WHEREIN IT WAS H ELD AS FOLLOWS: 8. ON READING THE ABOVE PROVISIONS, IT BECOMES CLEAR THAT THE ASSESSEE(S)- EMPLOYER(S) WOULD BE ENTITLED TO DEDUCTION ONLY IF THE CONTRIBUTION STANDS CREDITED ON OR BEFORE THE DUE DATE GIVEN IN THE PROVIDENT FU ND ACT. HOWEVER, THE SECOND PROVISO ONCE AGAIN CREATED FURTHER DIFFICULTIES. IN MANY OF THE COMPANIES, FINANCIAL YEAR ENDED ON 31ST MARCH, WHICH DID NOT C OINCIDE WITH THE ACCOUNTING PERIOD OF R.P.F.C. FOR EXAMPLE, IN MANY CASES, THE TIME TO MAKE CONTRIBUTION TO R.P.F.C. ENDED AFTER DUE DATE FOR FILING OF RETURNS . THEREFORE, THE INDUSTRY ONCE AGAIN MADE REPRESENTATION TO THE MINISTRY OF FINANC E AND, TAKING COGNIZANCE OF THIS DIFFICULTY, THE PARLIAMENT INSERTED ONE MORE A MENDMENT VIDE FINANCE ACT, 2003, WHICH, AS STATED ABOVE, CAME INTO FORCE WITH EFFECT FROM 1-4-2004. IN OTHER WORDS, AFTER 1-4-2004, TWO CHANGES WERE MADE, NAMEL Y, DELETION OF THE SECOND PROVISO AND FURTHER AMENDMENT IN THE FIRST PROVISO, QUOTED ABOVE. BY THE FINANCE ACT, 2003, THE AMENDMENT MADE IN THE FIRST PROVISO EQUATED IN TERMS OF THE BENEFIT OF DEDUCTION OF TAX, DUTY, CESS AND FEE ON THE ONE HAND WITH CONTRIBUTIONS TO EMPLOYEES' PROVIDENT FUND, SUPERANNUATION FUND AND OTHER WELFARE FUNDS ON THE OTHER. HOWEVER, THE FINANCE ACT, 2003, BRINGING ABO UT THIS UNIFORMITY CAME INTO FORCE WITH EFFECT FROM 1-4-2004. THEREFORE, THE ARG UMENT OF THE ASSESSEE(S) IS THAT THE FINANCE ACT, 2003, WAS CURATIVE IN NATURE, IT W AS NOT AMENDATORY AND, THEREFORE, IT APPLIED RETROSPECTIVELY FROM 1-4-1988 , WHEREAS THE ARGUMENT OF THE DEPARTMENT WAS THAT FINANCE ACT, 2003, WAS AMENDATO RY AND IT APPLIED PROSPECTIVELY, PARTICULARLY WHEN THE PARLIAMENT HAD EXPRESSLY MADE THE FINANCE ACT, 2003, APPLICABLE ONLY WITH EFFECT FROM 1-4-200 4. IT WAS ALSO ARGUED ON BEHALF OF THE DEPARTMENT THAT EVEN BETWEEN 1-4-1988 AND 1- 4-2004, PARLIAMENT HAD MAINTAINED A CLEAR DICHOTOMY BETWEEN PAYMENT OF TAX , DUTY, CESS OR FEE ON ONE HAND AND PAYMENT OF CONTRIBUTIONS TO THE WELFARE FU NDS ON THE OTHER. ACCORDING TO THE DEPARTMENT, THAT DICHOTOMY CONTINUED UP TO 1-4- 2004, HENCE, LOOKING TO THIS ASPECT, THE PARLIAMENT CONSCIOUSLY KEPT THAT DICHOT OMY ALIVE UP TO 1-4-2004, BY MAKING FINANCE ACT, 2003, COME INTO FORCE ONLY WITH EFFECT FROM 1-4-2004. HENCE, ACCORDING TO THE DEPARTMENT, FINANCE ACT, 2003 SHOU LD BE READ AS AMENDATORY AND NOT AS CURATIVE [RETROSPECTIVE] WITH EFFECT FRO M 1-4-1988. 9. WE FIND NO MERIT IN THESE CIVIL APPEALS FILED BY T HE DEPARTMENT FOR THE FOLLOWING REASONS: FIRSTLY, AS STATED ABOVE, SECTION 43B [MAI N SECTION], WHICH STOOD INSERTED BY FINANCE ACT, 1983, WITH EFFECT FROM 1-4-1984, EX PRESSLY COMMENCES WITH A NON OBSTANTE CLAUSE, THE UNDERLYING OBJECT BEING TO DIS ALLOW DEDUCTIONS CLAIMED MERELY BY MAKING A BOOK ENTRY BASED ON MERCANTILE S YSTEM OF ACCOUNTING. AT THE SAME TIME, SECTION 43B [MAIN SECTION] MADE IT MANDA TORY FOR THE DEPARTMENT TO DULARI DEVI HETAMSARIA ITA NO. 1290/KOL/2018 ASSESSMENT YEAR:2008-09 P PP PA AA AG GG GE EE E | || | 6 66 6 GRANT DEDUCTION IN COMPUTING THE INCOME UNDER SECTI ON 28 IN THE YEAR IN WHICH TAX, DUTY, CESS, ETC., IS ACTUALLY PAID. HOWEVER, P ARLIAMENT TOOK COGNIZANCE OF THE FACT THAT ACCOUNTING YEAR OF A COMPANY DID NOT ALWA YS TALLY WITH THE DUE DATES UNDER THE PROVIDENT FUND ACT, MUNICIPAL CORPORATION ACT [OCTROI] AND OTHER TAX LAWS. THEREFORE, BY WAY OF FIRST PROVISO, AN INCENT IVE/RELAXATION WAS SOUGHT TO BE GIVEN IN RESPECT OF TAX, DUTY, CESS OR FEE BY EXPLI CITLY STATING THAT IF SUCH TAX, DUTY, CESS OR FEE IS PAID BEFORE THE DATE OF FILING OF TH E RETURN UNDER THE INCOME-TAX ACT [DUE DATE], THE ASSESSEE(S) THEN WOULD BE ENTITLED TO DEDUCTION. HOWEVER, THIS RELAXATION/INCENTIVE WAS RESTRICTED ONLY TO TAX, DU TY, CESS AND FEE. IT DID NOT APPLY TO CONTRIBUTIONS TO LABOUR WELFARE FUNDS. THE REASO N APPEARS TO BE THAT THE EMPLOYER(S) SHOULD NOT SIT ON THE COLLECTED CONTRIB UTIONS AND DEPRIVE THE WORKMEN OF THE RIGHTFUL BENEFITS UNDER SOCIAL WELFARE LEGIS LATIONS BY DELAYING PAYMENT OF CONTRIBUTIONS TO THE WELFARE FUNDS. HOWEVER, AS STA TED ABOVE, THE SECOND PROVISO RESULTED IN IMPLEMENTATION PROBLEMS, WHICH HAVE BEE N MENTIONED HEREINABOVE, AND WHICH RESULTED IN THE ENACTMENT OF FINANCE ACT, 2003, DELETING THE SECOND PROVISO AND BRINGING ABOUT UNIFORMITY IN THE FIRST PROVISO BY EQUATING TAX, DUTY, CESS AND FEE WITH CONTRIBUTIONS TO WELFARE FUNDS. O NCE THIS UNIFORMITY IS BROUGHT ABOUT IN THE FIRST PROVISO, THEN, IN OUR VIEW, THE FINANCE ACT, 2003, WHICH IS MADE APPLICABLE BY THE PARLIAMENT ONLY WITH EFFECT FROM 1-4-2004, WOULD BECOME CURATIVE IN NATURE, HENCE, IT WOULD APPLY RETROSPEC TIVELY WITH EFFECT FROM 1-4- 1988. SECONDLY, IT MAY BE NOTED THAT, IN THE CASE O F ALLIED MOTORS (P.) LTD. V. CIT [1997] 224 ITR 677(SC) , THE SCHEME OF SECTION 43B OF THE ACT CAME TO BE EXAMINED. IN THAT CASE, THE QUESTION WHICH AROSE FO R DETERMINATION WAS, WHETHER SALES TAX COLLECTED BY THE ASSESSEE AND PAID AFTER THE END OF THE RELEVANT PREVIOUS YEAR BUT WITHIN THE TIME ALLOWED UNDER THE RELEVANT SALES TAX LAW SHOULD BE DISALLOWED UNDER SECTION 43B OF THE ACT WHILE COMPU TING THE BUSINESS INCOME OF THE PREVIOUS YEAR? THAT WAS A CASE WHICH RELATED TO ASSESSMENT YEAR 1984-85. THE RELEVANT ACCOUNTING PERIOD ENDED ON 30-6-1983. THE INCOME-TAX OFFICER DISALLOWED THE DEDUCTION CLAIMED BY THE ASSESSEE WH ICH WAS ON ACCOUNT OF SALES TAX COLLECTED BY THE ASSESSEE FOR THE LAST QUARTER OF THE RELEVANT ACCOUNTING YEAR. THE DEDUCTION WAS DISALLOWED UNDER SECTION 43B WHIC H, AS STATED ABOVE, WAS INSERTED WITH EFFECT FROM 1-4-1984. IT IS ALSO RELE VANT TO NOTE THAT THE FIRST PROVISO WHICH CAME INTO FORCE WITH EFFECT FROM 1-4-1988 WAS NOT ON THE STATUTE BOOK WHEN THE ASSESSMENTS WERE MADE IN THE CASE OF ALLIED MOT ORS (P.) LTD. (SUPRA). HOWEVER, THE ASSESSEE CONTENDED THAT EVEN THOUGH TH E FIRST PROVISO CAME TO BE INSERTED WITH EFFECT FROM 1-4-1988, IT WAS ENTITLED TO THE BENEFIT OF THAT PROVISO BECAUSE IT OPERATED RETROSPECTIVELY FROM 1-4-1984, WHEN SECTION 43B STOOD INSERTED. THIS IS HOW THE QUESTION OF RETROSPECTIVI TY AROSE IN ALLIED MOTORS (P.) LTD.'S CASE (SUPRA). THIS COURT, IN ALLIED MOTORS ( P.) LTD.'S CASE (SUPRA) HELD THAT, WHEN A PROVISO IS INSERTED TO REMEDY UNINTENDED CON SEQUENCES AND TO MAKE THE SECTION WORKABLE, A PROVISO WHICH SUPPLIES AN OBVIO US OMISSION IN THE SECTION AND WHICH PROVISO IS REQUIRED TO BE READ INTO THE SECTI ON TO GIVE THE SECTION A REASONABLE INTERPRETATION, IT COULD BE READ RETROSP ECTIVE IN OPERATION, PARTICULARLY TO GIVE EFFECT TO THE SECTION AS A WHOLE. ACCORDING LY, THIS COURT, IN ALLIED MOTORS (P.) LTD.'S CASE (SUPRA), HELD THAT THE FIRST PROVI SO WAS CURATIVE IN NATURE, HENCE, RETROSPECTIVE IN OPERATION WITH EFFECT FROM 1-4-198 8. IT IS IMPORTANT TO NOTE ONCE AGAIN THAT, BY FINANCE ACT, 2003, NOT ONLY THE SECO ND PROVISO IS DELETED BUT EVEN THE FIRST PROVISO IS SOUGHT TO BE AMENDED BY BRINGI NG ABOUT AN UNIFORMITY IN TAX, DUTY, CESS AND FEE ON THE ONE HAND VIS-A-VIS CONTRI BUTIONS TO WELFARE FUNDS OF EMPLOYEE(S) ON THE OTHER. THIS IS ONE MORE REASON W HY WE HOLD THAT THE FINANCE ACT, 2003, IS RETROSPECTIVE IN OPERATION. MOREOVER, THE JUDGMENT IN ALLIED MOTORS DULARI DEVI HETAMSARIA ITA NO. 1290/KOL/2018 ASSESSMENT YEAR:2008-09 P PP PA AA AG GG GE EE E | || | 7 77 7 (P.) LTD.'S CASE (SUPRA) IS DELIVERED BY A BENCH OF THREE LEARNED JUDGES, WHICH IS BINDING ON US. ACCORDINGLY, WE HOLD THAT FINANCE AC T, 2003, WILL OPERATE RETROSPECTIVELY WITH EFFECT FROM 1-4-1988 [WHEN THE FIRST PROVISO STOOD INSERTED]. LASTLY, WE MAY POINT OUT THE HARDSHIP AND THE INVID IOUS DISCRIMINATION WHICH WOULD BE CAUSED TO THE ASSESSEE(S) IF THE CONTENTIO N OF THE DEPARTMENT IS TO BE ACCEPTED THAT FINANCE ACT, 2003, TO THE ABOVE EXTEN T, OPERATED PROSPECTIVELY. TAKE AN EXAMPLE - IN THE PRESENT CASE, THE RESPONDE NTS HAVE DEPOSITED THE CONTRIBUTIONS WITH THE R.P.F.C. AFTER 31ST MARCH [E ND OF ACCOUNTING YEAR] BUT BEFORE FILING OF THE RETURNS UNDER THE INCOME-TAX A CT AND THE DATE OF PAYMENT FALLS AFTER THE DUE DATE UNDER THE EMPLOYEES' PROVIDENT F UND ACT, THEY WILL BE DENIED DEDUCTION FOR ALL TIMES. IN VIEW OF THE SECOND PROV ISO, WHICH STOOD ON THE STATUTE BOOK AT THE RELEVANT TIME, EACH OF SUCH ASSESSEE(S) WOULD NOT BE ENTITLED TO DEDUCTION UNDER SECTION 43B OF THE ACT FOR ALL TIME S. THEY WOULD LOSE THE BENEFIT OF DEDUCTION EVEN IN THE YEAR OF ACCOUNT IN WHICH T HEY PAY THE CONTRIBUTIONS TO THE WELFARE FUNDS, WHEREAS A DEFAULTER, WHO FAILS TO PA Y THE CONTRIBUTION TO THE WELFARE FUND RIGHT UP TO 1-4-2004, AND WHO PAYS THE CONTRIBUTION AFTER 1-4-2004, WOULD GET THE BENEFIT OF DEDUCTION UNDER SECTION 43 B OF THE ACT. IN OUR VIEW, THEREFORE, FINANCE ACT, 2003, TO THE EXTENT INDICAT ED ABOVE, SHOULD BE READ AS RETROSPECTIVE. IT WOULD, THEREFORE, OPERATE FROM 1- 4-1988, WHEN THE FIRST PROVISO WAS INTRODUCED. IT IS TRUE THAT THE PARLIAMENT HAS EXPLICITLY STATED THAT FINANCE ACT, 2003, WILL OPERATE WITH EFFECT FROM 1-4-2004. HOWEVER, THE MATTER BEFORE US INVOLVES THE PRINCIPLE OF CONSTRUCTION TO BE PLACED ON THE PROVISIONS OF FINANCE ACT, 2003. 10. BEFORE CONCLUDING, WE EXTRACT HEREINBELOW THE RELE VANT OBSERVATIONS OF THIS COURT IN THE CASE OF CIT V. J.H. GOTLA [1985] 156 ITR 323 , WHICH READS AS UNDER: '...WE SHOULD FIND OUT THE INTENTION FROM THE LANGU AGE USED BY THE LEGISLATURE AND IF STRICT LITERAL CONSTRUCTION LEADS TO AN ABSU RD RESULT, I.E., A RESULT NOT INTENDED TO BE SUBSERVED BY THE OBJECT OF THE LEGIS LATION FOUND IN THE MANNER INDICATED BEFORE, THEN IF ANOTHER CONSTRUCTION IS P OSSIBLE APART FROM STRICT LITERAL CONSTRUCTION, THEN THAT CONSTRUCTION SHOULD BE PREFERRED TO THE STRICT LITERAL CONSTRUCTION. THOUGH EQUITY AND TAXATION AR E OFTEN STRANGERS, ATTEMPTS SHOULD BE MADE THAT THESE DO NOT REMAIN ALWAYS SO A ND IF A CONSTRUCTION RESULTS IN EQUITY RATHER THAN IN INJUSTICE, THEN SU CH CONSTRUCTION SHOULD BE PREFERRED TO THE LITERAL CONSTRUCTION....' (P. 339) FOR THE AFORE-STATED REASONS, WE HOLD THAT FINANCE ACT, 2003, TO THE EXTENT INDICATED ABOVE, IS CURATIVE IN NATURE, HENCE, IT I S RETROSPECTIVE AND IT WOULD OPERATE WITH EFFECT FROM 1-4-1988 [WHEN THE FIRST P ROVISO CAME TO BE INSERTED]. FOR THE ABOVE REASONS, WE FIND NO MERIT IN THIS BAT CH OF CIVIL APPEALS FILED BY THE DEPARTMENT WHICH ARE HEREBY DISMISSED WITH NO ORDER AS TO COSTS. 11. SIMILARLY, THE HON`BLE SUPREME COURT IN THE CASE OF ALLIED MOTERS (P) LTD, 91 TAXMAN 205 (SC) HELD AS FOLLOWS: A PROVISO WHICH IS INSERTED TO REMEDY UNINTENDED C ONSEQUENCES AND TO MAKE THE PROVISION WORKABLE, A PROVISO WHICH SUPPLIES AN OBV IOUS OMISSION IN THE SECTION AND IS REQUIRED TO BE READ INTO THE SECTION TO GIVE THE SECTION A REASONABLE DULARI DEVI HETAMSARIA ITA NO. 1290/KOL/2018 ASSESSMENT YEAR:2008-09 P PP PA AA AG GG GE EE E | || | 8 88 8 INTERPRETATION, REQUIRES TO BE TREATED AS RETROSPEC TIVE IN OPERATION SO THAT A REASONABLE INTERPRETATION CAN BE GIVEN TO THE SECTI ON AS A WHOLE. ACCORDINGLY, THE SALES-TAX COLLECTED BY THE ASSESSE E COLLECTED IN THE LAST QUARTER OF THE RELEVANT PREVIOUS YEAR AND PAID AFTER THE END O F THE PREVIOUS YEAR BUT WITHIN THE TIME ALLOWED UNDER THE RELEVANT SALES-TAX LAW C OULD NOT BE DISALLOWED UNDER SECTION 43B, WHILE COMPUTING THE BUSINESS INCOME OF THE SAID PREVIOUS YEAR. 12. WE NOTE THAT THE COORDINATE BENCH OF ITAT MUMBA I, IN THE CASE OF M/S JOHN FLOWER ( INDIA) PVT. LTD, IN ITA NO.7545/MUM/2014, FOR A.Y. 2010-11, ORDER DATED 25.01.2017 HELD THAT IF THE DIFFERENCE BETWEE N THE VALUATION ADOPTED BY THE STAMP VALUATION AUTHORITY AND DECLARED BY THE ASSES SEE IS LESS THAN 10%, THE SAME SHOULD BE IGNORED AND NO ADJUSTMENTS SHALL BE MADE. ACCORDINGLY, WE HOLD THAT THE INSERTION OF THIRD PR OVISO (NOTED ABOVE) TO SECTION 50C OF THE ACT IS DECLARATORY AND CURATIVE IN NATUR E. THAT IS, THE THIRD PROVISO TO SECTION 50C OF THE ACT RELATES TO COMPUTATION OF VA LUE OF PROPERTY AS EXPLAINED BY US ABOVE, HENCE IT IS NOT A SUBSTANTIVE AMENDMENT, IT IS ONLY A PROCEDURAL AMENDMENT THEREFORE THE COORDINATE BENCHES OF THE I TAT USED TO IGNORE THE VARIATION UP TO 10%, THEREFORE, THE SAID AMENDMENT SHOULD BE RETROSPECTIVE. QUITE CLEARLY THEREFORE, EVEN WHEN THE STATUTE DOES NOT S PECIFICALLY STATE SO, SUCH AMENDMENTS, IN THE LIGHT OF THE DETAILED DISCUSSION S ABOVE, CAN ONLY BE TREATED AS RETROSPECTIVE AND EFFECTIVE FROM THE DATE RELATED S TATUTORY PROVISIONS WAS INTRODUCED. VIEWED THUS, THE THIRD PROVISO TO SECTI ON50C SHOULD BE TREATED AS CURATIVE IN NATURE AND WITH RETROSPECTIVE EFFECT FR OM 1ST APRIL 2003, I.E. THE DATE EFFECTIVE FROM WHICH SECTION 50C WAS INTRODUCED. WE NOTE THAT FINANCE ACT, 2018, W.E.F. 01.04.2019 P ROVIDED THAT NO ADJUSTMENTS SHALL BE MADE IN A CASE WHERE THE VARIATION BETWEEN STAMP DUTY VALUE AND THE SALE CONSIDERATION IS NOT MORE THAN 5% OF THE SALE CONSIDERATION. IN THE ASSESSEES CASE UNDER CONSIDERATION, THE STAMP DUTY VALUATION IS RS. 3,27,01,950/- AND SALE CONSIDERATION IS RS. 3,15,00,000/-. THE DIFFERENCE OF RS. 12,01,950/- IS NOT MORE THAN 5% OF THE SALE CONSIDERATION. THAT IS, IT IS A T 3.81% [12,01,950 / 3,15,00,000 X 100] OF SALE CONSIDERATION, THEREFORE, WE DELETE THE ADDITION OF RS. 12,01,950/-. WE NOTE THAT VALUATION OFFICER VALUED THE BUILDING (ASSET) AT RS. 1,76,55,900/- WHEREAS ASSESSEE HAD SHOWN IN HER BOOKS OF ACCOUNTS AT RS. 1,66,52,805/- THE DIFFERENCE OF THESE TWO FIGURES IS AT RS. 10,03,095 /- (1,76,55,900 1,66,52,805). THE SAID DIFFERENCE OF RS. 10,03,095/- IS LESS THAN 10% OF THE VALUATION SHOWN BY THE ASSESSEE, THAT IS, AT RS. 16,65,280 (10% OF RS. 2,66,52,805/-). THE SAID VARIATION OR DIFFERENCE MAY ARISE BECAUSE OF VARIOU S FACTORS AND THEREFORE CO- ORDINATION BENCH IN THE CASE OF CHANDRA PRAKASH JHU NJHUNWALA (SUPRA) TOOK THE VIEW THAT SUCH MINOR DIFFERENCE SHOULD BE IGNORED A ND NO ADDITION SHOULD BE MADE ON ACCOUNT OF SUCH MINOR VARIATIONS. WE NOTE THAT T HE VARIATION IN VALUATION SHOWN DULARI DEVI HETAMSARIA ITA NO. 1290/KOL/2018 ASSESSMENT YEAR:2008-09 P PP PA AA AG GG GE EE E | || | 9 99 9 BY DVO AND THE VALUATION MADE BY THE ASSESSEE DOES NOT EXCEED 10% HENCE RELYING ON THE JUDGMENT OF CO-ORDINATE BENCH(SUPRA) , ON THE IDENTICAL ISSUE, AS NOTED ABOVE, WE DELETE THE ADDITION OF RS. 10,03,03 5/-. 6. BEFORE PARTING, IT IS NOTED THAT THE ORDER IS BE ING PRONOUNCED AFTER 90 DAYS OF HEARING. HOWEVER, TAKING NOTE OF THE EXTRAORDINARY SITUATION IN THE LIGHT OF THE COVID-19 PANDEMIC AND LOCKDOWN, THE PERIOD OF LOCKD OWN DAYS NEED TO BE EXCLUDED. FOR COMING TO SUCH A CONCLUSION, WE RELY UPON THE DECISION OF THE CO- ORDINATE BENCH OF THE MUMBAI TRIBUNAL IN THE CASE O F DCIT VS. JCB LIMITED IN ITA NO. 6264/MUM/2018 AND ITA NO. 6103/MUM/2018 FOR A.Y. 2013-14 ORDER DATED 14.05.2020. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE COURT ON 12.06.2020 SD/- ( S.S.GODARA ) SD/- (A.L.SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER /KOLKATA; / DATE: 12/06/2020 ( SB, SR.PS ) COPY OF THE ORDER FORWARDED TO: 1. DULARI DEVI HETAMSARIA (L/H OF LATE SHYAM SUNDAR HETAMSARIA) 2. ACIT, CIRCLE-2, ASANSOL 3. C.I.T(A)- 4. C.I.T.- KOLKATA. 5. CIT(DR), KOLKATABENCHES, KOLKATA. 6. GUARD FILE. TRUE COPY BY ORDER ASSIST ANT REGISTRAR ITAT, KOLKA TA BENCHES DULARI DEVI HETAMSARIA ITA NO. 1290/KOL/2018 ASSESSMENT YEAR:2008-09 P PP PA AA AG GG GE EE E | || | 1 11 10 00 0