RUDRAPRATAP TRIPATHI , THANE V. CIT, (APPEALS)-II, PUNE

ITA 1731/MUM/2020

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 2157 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-07-2022
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: D
• Assessment Year: 2014-2015
• Appeal Filed On: 10-08-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Principle of natural justice; Fair market value; Capital Gains
• Section: 271(1)(c); 43CA; 43B; 143(3); 50C; 40(a)(ia); 250; 143(2); 191; 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, MUMBAI BEFORE SHRI AMIT SHUKLA, JM & SHRI S. RIFAUR RAHMAN, AM 1. आयकरअपीलसं./ I.T.A. No. 1731/Mum/2020 (ननधधारणवर्ा / Assessment Year: 2014-15) Rudra Pratap Tripathi Prop. M/s Indian Corporation, 502, Modi House, 5 th Floor Opp. RTO Office Eastern Express Highway, Thane West, Maharashtra Pin-400 602 बनाम/ Vs. DCIT Cir-3, R. No. 2, B-Wing, 6 th floor, Ashar IT Park, Road No. 16, Wagle Indl. Estate, Thane, Maharashtra, Pin-400 604 स्थधयीलेखधसं./जीआइआरसं./PAN No. ACTPT0115A (अपीलधथी/Appellant) : (प्रत्यथी / Respondent) अपीलधथीकीओरसे/ Appellant by : Shri S. K. Garg, Ld. AR प्रत्यथीकीओरसे/Respondent by : Smt. Mahita Nair, Ld. DR सुनवधईकीतधरीख/ Date of Hearing : 12.07.2022 घोर्णधकीतधरीख / Date of Pronouncement : 28.07.2022 आदेश / O R D E R Per Amit Shukla, Judicial Member: The foresaid appeal has been filed by the assessee against order dated 11.06.2018, passed by Ld. CIT(A) –2 Pune, for the quantum of assessment for the A.Y. 20114-15. At the outset appeal 2 I.T.A. No. 1731/Mum/2020 Rudra Pratap Tripathi of the assessee is belated by nearly two years, before the Income tax Appellate Tribunal, Mumbai. 2. For condonation of delay, Shri Rudra Pratap Tripathi, the proprietor of Indian Corporation (belonging to Indian Logistics Group), Thane Maharashtra and the assessee before us, had filed an affidavit, as per which the related appellate order dated 11.06.2018, had been in the custody of one Shri J.P. Tiwari, who had been attending to the proceedings, before the Income Tax Authorities at various stages (as was evident from the copy of order sheet entries as had been provided to the assessee, and as referred to by us, supra. Suddenly, Shri J.P. Tiwari had left the job, without handing over his „charge‟, either to Shri Rudra Pratap Tripathi (the assessee here) and/or to any other person in the office of the appellant. The assessee was not aware of any such order, till he had been served with show cause notice (reminder) for levy of penalty under section 271(1)(c) of the Income Tax Act, 1961, hereinafter referred to as the Act (for the sake of brevity) and for the above referred assessment year itself. Shri S.K. Garg of M/s S.K. Garg & Co. (Advocates), appearing on behalf of the assessee, narrated the 3 I.T.A. No. 1731/Mum/2020 Rudra Pratap Tripathi above mentioned facts and supported the „petition for condonation of delay‟ by relying upon to the decision of Hon‟ble Supreme Court in the case of Senior Bhosale Estate (HUF) vs. Asstt. CIT, reported in (2019) 419 ITR 732. Ld. Senior DR appearing on behalf of the Respondent, she did not much objected for condonation of delay. Considering the uncontroverted plea of the assessee, and in view of the reasons given above and the principle laid down in the decision of Hon‟ble Supreme Court, we find that there was no latches on part of the assessee in filing appeal and there was reasonable cause in filing of the appeal as mentioned above, and accordingly in the interest of substantial justice we condone the of delay in filing the appeal and proceed to hear the appeal on merits. 3. Against the Appellate order dated 17.06.2018, the assessee had taken, as many as 14 (fourteen) grounds, initially speaking, but later on an „Additional ground‟, being ground no.15 was taken. Thus, in all, there are fifteen „grounds of appeal‟, reading as under:- “BECAUSE, 4 I.T.A. No. 1731/Mum/2020 Rudra Pratap Tripathi (1) the regular assessment order dated 31.12.2016, as had been passed, after selection of the „return‟, under computer Aided Scrutiny Scheme (CASS) without there being any expression of opinion by the Assessing Officer, was null and void at the very outset; (2) the “CIT(A)” has erred in law and on facts in sustaining an addition of Rs.79,67,750/-, as per particulars given below:- S. No. Unit No. Actual sale Consideration as had been agreed to by the buyers at the time of allotment of their favour (Rs.) Market value as per stamp valuation Authority, on the date of registration of related sale deeds. (Rs.) Addition made in the Assessment (Rs.) Valuation as per DVO’s, report as had been called for by the Assessing Officer in pursuance of directions of ld. CIT(A) given during the course of appellate proceedings (Rs.) Difference for which additions had been sustained by CIT(A) (Rs.) 0% Variation Between A & C (Rs.) (A) (B) (A-B) (C) (A-C) 1 208/1 90,00,000 1,72,79,974 - 82,79,974 99,96,000 9,96,000 9.96 2 208/4B 42,00,000 86,39,987 -44,39,987 44,04,000 2,04,000 4.63 3 208/4A 42,00,000 86,39,987 -44,39,987 44,04,000 2,04,000 4.63 4 177/2 37,56,000 86,39,987 -48,83,987 45,16,000 7,60,000 16.83 5 207/5B 60,00,000 86,36,733 -26,36,733 65,91,000 5,91,000 8.97 6 207/5A 60,00,000 86,36,733 -26,36,733 65,91,000 5,91,000 8.97 7 207-A/1 1,75,00,000 1,72,79,974 2,20,026 1,79,36,000 4,36,000 2.43 8 207-A/2 1,75,00,000 1,72,79,974 2,20,026 1,79,36,000 4,36,000 2.43 9 194/5 64,50,000 86,39,987 -21,89,987 69,23,000 4,73,000 6.83 10 153A/4 21,45,000 21,59,919 -14,919 21,45,000 - - 11 208A/2A 60,00,000 86,39,987 -26,39,987 65,59,000 5,59,000 8.52 12 207/3 1,26,00,000 1,72,79,794 -46,79,794 1,31,30,000 5,30,000 4.04 13 194/3B 37,50,000 43,19,994 -5,69,994 38,09,000 59,000 1.55 14 194/3A 37,50,000 43,19,994 -5,69,994 38,09,000 59,000 1.55 15 207A/1 1,20,00,000 1,72,73,621 -52,73,621 1,26,30,000 6,30,000 4.99 16 194/6 50,00,000 86,39,987 -36,39,987 54,14,000 4,14,000 7.65 5 I.T.A. No. 1731/Mum/2020 Rudra Pratap Tripathi 17 153A/6 29,06,250 53,99,953 -24,93,703 32,00,000 2,93,750 9.18 18 229A/6 47,00,000 86,39,987 -39,39,987 52,14,000 5,14,000 9.86 19 207/1 1,26,00,000 1,72,79,974 -46,79,974 1,27,09,000 1,09,000 0.86 20 207/2 1,26,00,000 1,72,79,974 -46,79,974 1,27,09,000 1,09,000 0.86 15,26,57,250 21,49,06,520 -6,22,49,270 16,06,25,000 79,67,750 in terms of the appellate order dated 11.06.2018, as had been passed by him, after upholding the applicability of provisions of section 43CA(3), as had earlier been invoked by the Assessing Officer, while completing the assessment order under section 143(3), so to say; (3) during the course of regular assessment proceedings, the had made available to the Assessing Officer (seized with the regular assessment proceedings), all the relevant details, like – (i) allotment of units in the calendar year 2012; and (ii) part of the consideration as had been received through „account payee‟ cheques (by the appellant), in the calendar year 2012 itself, at the time of allotment of units; and accordingly the provisions of sub-section (3) of section 43CA could not be said to be applicable, in relation to the sales made during the financial year 2013-14, relevant to the assessment year 2014-15, so as to sustain an addition of Rs.79,67,750/- as aforesaid; (4) it is a trite law that valuation for the purposes of collection of stamp duty, does not necessarily mean the „market value‟ of the property sold and accordingly, the provision as contained in section 43CA(3), are merely in the nature of „deeming provisions‟ falling in the category of „fiction‟, and such a „fiction‟ could not have been made the basis of assessment and for consequent addition of Rs.79,67,750/- as had been sustained by the ld.CIT(A), as per working given in the ground No.2, as aforesaid; 6 I.T.A. No. 1731/Mum/2020 Rudra Pratap Tripathi (5) in any case, sale consideration actually worked out to be realizable by the appellant, on allotment of „UNITS‟ in the calendar year 2012 (at the time of booking) represented the market value at that time and no addition could have been made/sustained by the authorities below, by invoking the provisions of section 43CA(3) as a whole; (6) the “CIT(A)” could not have sustained the addition of Rs.79,67,750/-, based on DVO‟s report [to whom a reference had been directed to be made during the course of appellate proceedings, by the CIT(A)] as such reports are invariably based on „estimates‟, which could not be said held to be representing the „market value‟ of the UNITS that had been subject matter of sales; (7) market valuation of a property/properties booked at a particular time, depends upon large number of factors, which included market sentiments, location of property(ies) and host of other factors, which the stamp valuation officer could not be said to have been concerned with, and no assessment could have lawfully been made on the basis of such a „valuation‟ and that too on the date of registration of sale deeds; (8) on a due consideration of attendant facts and circumstances of the case, as have been put forth by the appellant, before the Assessing Officer himself, during the course of assessment proceedings, the appellant‟s version was liable to be accepted, particularly for the reasons that a) full particulars about the buyers were available with the Assessing Officer; b) complete and all necessary enquiries could have been made from the buyers/customers themselves, who had been the allottees of „units‟ in question; and 7 I.T.A. No. 1731/Mum/2020 Rudra Pratap Tripathi c) in any case, for determination of „market value‟, the rates prevailing at the time of booking/allotment, alone were relevant and no such addition as had been made/sustained by the „CIT(Appeals)‟ was called for and justified; (9) in any case, the “CIT(A)” has erred in law and on facts in not allowing due margin for the „estimates‟ made by the DVO, as such valuation itself was based on mere estimates; (10) looking to the chart as has been given in ground no.2 hereinfore, variation between appellant‟s version and version of DVO, was less than 10% except one case, and no addition was called for in relation to such cases, in view of large number of judicial pronouncements available on the issue, particularly in the context of applicability of section 50C of the „Act‟; (11) otherwise also, the addition made, to the extent the same had been sustained by the ld. First Appellate Authority, was much too high and excessive, keeping in view the provisions contained in the proviso below sub-section (1) of section 43CA which itself provides a margin of 5%, on the consideration received or accruing, as a result of transfer, although with effect from 1.4.2019; (12) although such a proviso had been inserted w.e.f. 1.4.2019, the same had full retrospective application from 1.4.2014 itself, when the main provision of section 43CA had been inserted by the Finance Act 2013, in keeping with the principal laid down by Hon‟ble Supreme Court in the case of Allied Motors (P) Ltd Vs. CIT reported in (1997) 224 ITR 677; (13) the appellant‟s version of agricultural income was fully supported by the evidences that had been brought on record and the “CIT(A)” had erred in law and on facts is not giving full credence to the same; 8 I.T.A. No. 1731/Mum/2020 Rudra Pratap Tripathi (14) the order appealed against is contrary to the facts, law and principles of natural justice. (15) regular assessment order dated 31.12.2016 had been void ab-initio, as the same was passed under section 143(3), without service of notice under section 143(2). 4. So far as the issue of admission of Additional ground, being ground no.15 as above, is concerned, it was pleaded by Sri S.K. Garg, the Ld. AR for the assessee, that it was purely a jurisdictional ground which could be taken at any stage. He further submitted with the support of „order sheet entries‟ (duly certified by the Assessing Officer), that the assessee could not have taken such ground originally, as it had been stated by the Assessing Officer that notice under section 143(2) had been issued and served on the assessee on 29.08.2015, whereas the very first entry in that order sheet entries referred to supra was 24.12.2016. However, at the time of hearing Ld. AR did not wish to contest the additional ground, therefore, without dwelling upon any further on the „controversy‟, we decline to admit the „Additional ground‟ and proceed to decide the appeal being ITA No.1731/Mum/2020, on merits of various other grounds, with the consent of the parties 9 I.T.A. No. 1731/Mum/2020 Rudra Pratap Tripathi before us. Our stand is similar on the issue of selection of the “return” (filed by the assessee) through Computer Aided Scrutiny Scheme (CASS), which is ground no.1 of the Grounds of appeal. 5. In consequence of the discussion as aforesaid, the grounds that survive for our consideration are grounds no.2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13 and 14, out of grounds as have been reproduced in para 2 above 6. In ground No.2, it has been stated that the “CIT(A)” has erred in law and on facts in sustaining an addition of Rs.79,67,750/-, as per particulars given therein and has been noted by us, in para 2 herereinfore. 7. It is relevant to take note of the fact that said section 43CA as a whole had been inserted on the statute book by the finance Act 2013, w.e.f. 01.04.2014 and later on various amendments had been made therein, the said section 43CA, as amended from time to time is reproduced hereunder:- 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 10 I.T.A. No. 1731/Mum/2020 Rudra Pratap Tripathi 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 accruing as a result of such transfer: Provided that where the value adopted or assessed or assessable by the authority for the purpose of payment of stamp duty does not exceed one hundred and [ten] per cent of the consideration received or accruing as a result of the transfer, the consideration so received or accruing as a result of the transfer shall, for the purposes of computing profits and gains from transfer of such asset, be deemed to be the full value of the consideration. (Inserted by the Finance Act, 2018, w.e.f. 1.4.2019 and again amended by the Finance Act, 2020, w.e.f.1.4.2021). Inserted by the Finance Act, w.e.f. 1.4.2021. Substituted for ―by any mode other than cash‖ by the Finance Act, 2018, w.e.f. 1.4.2019. xxxxxx xxxxxx xxxx Provided further that in case of transfer of an asset, being a residential unit, the provisions of this proviso shall have the effect as if for the words "one hundred and ten per cent", the words "one hundred and twenty per cent" had been substituted, if the following conditions are satisfied, namely:— 11 I.T.A. No. 1731/Mum/2020 Rudra Pratap Tripathi (i) the transfer of such residential unit takes place during the period beginning from the 12th day of November, 2020 and ending on the 30th day of June, 2021; (ii) such transfer is by way of first time allotment of the residential unit to any person; and (iii) the consideration received or accruing as a result of such transfer does not exceed two crore rupees. (such section as a whole had been inserted by the Finance Act 2021 w.e.f. 01.04.2021) (2) The provisions of sub-section (2) and sub-section (3) of section 50C shall, so far as may be, apply in relation to determination of the value adopted or assessed or assessable under sub-section (1). (3) Where the date of agreement fixing the value of consideration for transfer of the asset and the date of registration of such transfer of asset are not the same, the value referred to in sub- section (1) may be taken as the value assessable by any authority of a State Government for the purpose of payment of stamp duty in respect of such transfer on the date of the agreement. (4) The provisions of sub-section(3) shall apply only in a case where the amount of consideration or a part thereof has been received by way of an account payee cheque or an account payee bank draft or by use of electronic clearing system through a bank account or 12 I.T.A. No. 1731/Mum/2020 Rudra Pratap Tripathi through such other electronic mode as may be prescribed on or before the date of agreement for transfer of the asset. Explanation.—For the purposes of this section, "residential unit" means an independent housing unit with separate facilities for living, cooking and sanitary requirement, distinctly separated from other residential units within the building, which is directly accessible from an outer door or through an interior door in a shared hallway and not by walking through the living space of another household (Inserted by the Finance Act 2021, w.e.f. 1.4.2021) 8. Crux of grounds No.2, 3, 4, 5, 6, 7, 8, 9, 10, 11 & 12 above, is applicability of section 43CA and addition of Rs.79,67,750/- as had been sustained there under, by the ld. CIT (Appeals), which was based on DVO‟s report, as had been directed by the ld. CIT(Appeals) during the course of appellate proceedings, to be obtained by the Assessing Officer himself and submit the same (before the Appellate Authority) along with his Remand Report. 9. The facts of the case are that the appellant had been carrying on that business activities connected with construction of godowns (colloquially known as galas in this region) and selling the same, as stock-in-trade, in his proprietary concern namely Indian 13 I.T.A. No. 1731/Mum/2020 Rudra Pratap Tripathi Corporation as belonging to Indian Logistic Group. The facts of the case, so far as the addition of Rs.79,67,750/- is concerned, are enumerated hereinbelow. (i) in the assessment year 2014-15 (under consideration here), the appellant namely, Sri Rudra Pratap Tripathi had filed “return” in his „individual‟ status on 21.11.2014 at an income of Rs.3,52,03,500/- which had been accepted also, as such, (by implication) without making any „adjustment‟ thereto as was permissible in the new regime of taxation, as contained in various clauses of section 143(1). (ii) In the regular assessment made under section 143(3) on 31.12.2016 wherein an addition of Rs.6,26,98,502/- had been made (by the Assessing Officer), by invoking the provisions contained in section 43CA. (iii) Aggrieved by the said assessment order dated 31.12.2016 passed under section 143(3) of the Act, the appellant preferred an appeal before the ld. CIT(A), who decided the same vide appellate order dated 11.06.2018, passed under section 250 of the Act. During the course of appellant proceedings, the ld. CIT(A) had given direction to the Assessing Officer vide his letter dated 12.02.2018, to refer the matter for valuation, by the District Valuation Officer (DVO for short). (iv) The Assessing Officer had submitted his remand report dated 17.04.2018 alongwith copy of valuation report, as had been 14 I.T.A. No. 1731/Mum/2020 Rudra Pratap Tripathi received from DVO. The copy of the said report (alongwith DVOs report) had been forwarded to the appellant on 10.05.2018 and to the said remand report the appellant had made written submission dated 29.05.2018. (v) In terms of DVO‟s report, as had been obtained (by the Assessing Officer and as a part of his „remand report‟ wherein the DVO had determined „galla wise fair market value‟ in the following manner:- Property:19 Nos, Industrial Galas (Scattered) at Survey No.39, Hissa No.3, Survey No. 23/15, 2/5/1 & Others, at Village Gundavali, Tal Bhiwandi, Dist Thane. (A) The Fair Market Value of the Properties as on Date of Agreement given below: Sl. No. Name of Property Date of Valuation BUA in Sqm Derived Rate per Sqm on D.O.V. Fair Market Value in Rs. Say FMV in Rs. 2 Gala No.6, Building No.153-A 18.12.201 3 348.51 9182 3200019 32,00,000 3 Gala No.2, Building No.177 20.05.201 3 557.62 8098 4515607 45,16,000 4 Gala No.3/A, Building No.194 03.12.201 3 278.81 13661 3808823 38,09,000 5 Gala No.3/B, Building No.194 03.12.201 3 278.81 13661 3808823 38,09,000 6 Gala No.5, Building No.194 19.09.201 3 557.62 12415 6922852 69,23,000 7 Gala No.6, Building No.194 17.12.201 3 557.62 9709 5413933 54,14,000 8 Gala No.1, Building No.207-A 19.07.201 3 1115.24 16083 17936405 1,79,36,000 9 Gala No.1, Building No.207-A 19.07.201 3 1115.24 16083 17936405 1,79,36,000 10 Gala No.1, 12.12.2011114.83 11329 12629909 1,26,30,000 15 I.T.A. No. 1731/Mum/2020 Rudra Pratap Tripathi Building No.207-A 3 11 Gala No.1, Building No.207 24.12.201 3 1115.24 11396 12709275 1,27,09,000 12 Gala No.3, Building No.207 12.08.201 3 1115.24 11773 13129721 1,31,30,000 13 Gala No.5A, Building No.207 28.05.201 3 557.41 11825 6591373 65,91,000 14 Gala No.5B, Building No.207 28.05.201 3 557.41 11825 6591373 65,91,000 15 Gala No.1, Building No.208 26.04.201 3 1115.24 8963 9995896 99,96,000 16 Gala No.2/A, Building No.208-A 26.08.201 3 557.62 11762 6558726 65,59,000 17 Gala No.64/A, Building No.208 12.04.201 3 557.62 7898 4404083 44,04,000 18 Gala No.64/B, Building No.208 12.04.201 3 557.62 7898 4404083 44,04,000 19 Gala No.6, Building No.229-A 17.01.201 4 557.62 9351 5214305 52,14,000 (B) I am of the opinion that the Fair Market Value of the following Galas has been correct declared in the return made by the Assessee. 1 Gala No.4, Building No.153- A 19.07.2 013 Rs.21,45,000/- 10. On receipt of the DVOs report (along with Remand report of the Assessing Officer) the ld. CIT(Appeals) had worked out the difference between the valuation as per DVO‟s report and „sale 16 I.T.A. No. 1731/Mum/2020 Rudra Pratap Tripathi consideration‟ (as shown by the appellant) at Rs.79,67,750/-, as against difference of Rs.6,26,98,502/- as had been determined earlier by the Assessing Officer in his order under section 143(3) dated 31.12.2016, as per findings given in paras 4.11 and 4.12 of the appellate order dated 11.06.2018 as reproduced herein below:- 4.11 In view of the above discussion and the cited case laws, I hold that the same are distinguishable and has no application in the present case. On the other hand, I draw support from the following decisions where Hon’ble Courts have held that the report of the DVO is binding: (i) CIT –vs- Dr. Indra Swaroop Bhatnagar, 349 ITR 210 (All) (2012) (ii) Mrs. Nandita Khosla –vs- ITO, 46 Sot 90 (Mum) (2011) (iii) Smt. Bharti Jayesh Sangani –vs- ITO, 128 345 (Mum) (2011) 4.12 In the light of the aforesaid discussion on the facts of the present case, I hold that the addition u/s 43CA of the IT Act is to be restricted to the difference between the valuation as per the DVO and sale consideration as shown by the appellant which comes to Rs.79,67,750/- as against the addition made by the AO in the assessment order at Rs.6,26,98,502/- The AO is directed accordingly. The ground is therefore treated as partly allowed. 11. Although, it has not been argued by any side, we ourselves have perused the order of the ld. CIT(A), and we find that he had 17 I.T.A. No. 1731/Mum/2020 Rudra Pratap Tripathi referred to and relied upon the DVOs report dated 10.04.2018 and upheld the addition to the extent of Rs.79,67,750, as per particulars, noted by us in para 2 hereinfore. 12. In short, the ld. CIT (A) had, before him the following set of figures:- Rs. (a) Actual sale consideration as had been agreed to by the buyers at the time of allotment in their favour. 15,26,57,250 (b) Market value as per stamp valuation authority at the time of registration of related sale deeds. 21,49,06,520 (c) Addition made in the assessment (by the ld. Assessing Officer [different between (a) & (b)] 6,22,49,270 (d) Valuation as per DVOs report, as obtained by the Assessing Officer as per direction of ld. CIT(A) 16,06,25,000 (e) Addition sustained by the ld. CIT(A) [(d) – (a)] 79,67,750 18 I.T.A. No. 1731/Mum/2020 Rudra Pratap Tripathi While passing the appellate order dated 11.06.2018, and the appellant is aggrieved by the said addition of Rs.79,67,750/- as mentioned at serial (e) above. 13. Sri Garg, the ld. AR invited our attention to the table as has been extracted from grounds of appeal‟ and noted by us in para 2 hereinfore and submitted that the figures of addition of Rs.79,67,750 had been sustained by the ld. CIT(A) by invoking the provisions of section 43CA, which were undisputedly applicable for the assessment year 2014-15. The difference between the „sale consideration‟ as received by the appellant on execution of sale deeds of galas, and „market value‟ thereof as had been determined by DVO, in his report had been varying from 0.86% to 9.96%, excepting that in the case of item no.(iv) there was a difference of Rs.7,60,000/- which worked out to 16.8% the sale consideration as had been received by the appellant. For the purposes of sustaining the addition to the extent of Rs.79,67,750/-, the ld. CIT(A) has referred to various case laws in paras 4.11 of his order. Particulars of the case laws, as referred to by the ld.CIT(Appeals) are given hereunder:- 19 I.T.A. No. 1731/Mum/2020 Rudra Pratap Tripathi (i) CIT vs. Dr. Indra Swaroop Bhatnagar reported in (2012) 349 ITR 210 : The said case law is related to the assessment year 2003- 04 and the judgment is dated 29 th September 2011. (ii) Mrs. Nandita Khosla vs. ITO reported in (2011) 46 SOT 90 (Mum Trib.) : This order is related to assessment year 2006-07 and the same is dated 13 th May 2011. (iii) Smt. Bharti Jayesh Sangani vs. ITO reported in (2011) 128 ITD 345 (Mum Trib.) 345 : This order is related to assessment year 2005-06 and is dated 4rth November, 2011 14. From the said particulars it is obvious that the same related to assessment year s 2003-04, 2006-07 and 2005-06 and all are dated 29.09.2011, 13 th May, 2011 and 04.11.2011 respectively, i.e. prior to insertion of section 43CA, as had been brought on the statute book, much later and made applicable for the assessment year 2014-15 onwards. Moreover, proviso permitting variation of 10% had come into force by the Finance Act 2016, in section 50C of the Act and in consequence of insertion of such proviso, amendment had been made in section 43CA also, which reads as under:- Provided that where the value adopted or assessed or assessable by the authority for the purpose of payment of stamp duty does not exceed one hundred and [ten] per cent of the consideration received or accruing as a result of the transfer, the consideration so received 20 I.T.A. No. 1731/Mum/2020 Rudra Pratap Tripathi or accruing as a result of the transfer shall, for the purposes of computing profits and gains from transfer of such asset, be deemed to be the full value of the consideration 15. At this stage, it is relevant to note the distinction between section 50C and section 43CA (as had been inserted by the Finance Act 2013, w.e.f. 1.4.2014). Whereas section 50C is relevant for transfer of „capital asset‟, consequence of which is exigible to Long Term Capital Gain or Loss, as the case may be, but section 43CA is applicable to the assets other than „capital asset‟, which may be in the form land and building or both, which represent stock-in-trade of an assessee and the effect is assessable as business income. This is the major difference between the two sections. Otherwise the tenor, letter and spirit of two sections are the same. Now the question is, as to what is the scope of such proviso, whether it is retrospective or prospective. Though, there are contradictory judgments decided by various benches of the ITAT, some judgments say that such an amendments have no prospective application and on the contrary some judgments say that such proviso is/are retrospective in nature. Normally, looking to the difference of 21 I.T.A. No. 1731/Mum/2020 Rudra Pratap Tripathi opinion, we would have referred the matter to the Hon‟ble President of ITAT, for constituting a Special Bench for deciding the issue as per the decision of Hon‟ble Madras High Court in the case of CIT Vs. N.G. Ramamurthi reported in (1970) 110 ITR 454. But, looking into the background of the said proviso which was to the effect that the same had been brought on the statute book to reduce the rigours of law, we ourselves proceed to decide the issue from our end in view of the decision of Hon‟ble Supreme Court in the case of Allied Motors (P) Ltd Vs. CIT reported in (1997) 224 ITR 677, rendered in the case of section 43B, wherein at pages 686 and 687, their lordships have observed and held as under:- ―In the case of Goodyear India Ltd. v. State of Haryana and Anr. (188 ITR 402) this court said that he rule of reasonable construction must be applied while construing a statute. Literal construction should be avoided if it defeats the manifest object and purpose of the Act. Therefore, in the well known words of Judge learned Hand, one cannot make a fortress out of the dictionary; and should remember that statutes have some purpose and object to accomplish whose sympathetic and imaginative discovery is the surest guide to their meaning. In the case of R.B. Jodha Mal Kuthiala v. Commissioner of Income-tax, Punjab, jammu & Kashmir and Himachal Pradesh 22 I.T.A. No. 1731/Mum/2020 Rudra Pratap Tripathi (82 ITR 570), this Court said that one should apply the rule of reasonable interpretation. A proviso which is inserted to remedy unintended consequences and to made the provision workable, a proviso which supplies an obvious omission in the section and is required to be read into the section to give the section a reasonable interpretation, requires to be treated as retrospective in operation so that a reasonable interpretation can be given to the section as a whole. This view has been accepted by a number of High Court. In the case of Commissioner of Income-Tax v. Chandulal Venichand ([1994] 209 ITR 7), the Gujarat High Court has held that he first proviso to section 43B is retrospective and sales-tax for the last quarter paid before the filing of the return for the assessment year is deductable. This decision deals with assessment year 1984-85. The Calcutta High Court in the case of Commissioner of Income-tax v. Sri Jagannath Steel Corporation ([1991] 191 ITR 676), has taken a similar view holding that the statutory liability for sales-tax actually discharge after the expiry of accounting year in compliance with the relevant stature is entitled to deduction under Section 43B. The High Court has held the amendment to be clarificatory and, therefore, retrospective. The Gujarat High Court in the above case held the amendment to be curative and explanatory and hence retrospective. The Patna High Court has also held the amendment inserting the first proviso to be explanatory in the case of Jamshedpur Motor Accessories Stores v. union of India and Ors. 23 I.T.A. No. 1731/Mum/2020 Rudra Pratap Tripathi ([1991] 189 ITR 70.), It was held that amendment inserting first proviso to be retrospective. The special leave petition from this decision of the Patna High Court was dismissed. The view of the Delhi High Court, therefore, that the first proviso to section 43Bwill be available only prospectively does not appear to be correct. As observed by G.P. Singh in his Principles of statutory Interpretation, 4th Edn. Page 291, "It is well settled that if a statute curative or merely declaratory of the previous law retrospective operation is generally intended." In fact the amendment would not serve its object in such a situation unless it is construed as retrospective. The view, therefore, taken by the Delhi High Court cannot be sustained.‖ 16. In view of the said decision of Hon‟ble Supreme Court, we are of the considered opinion that various case laws as have been referred to by the ld. CIT(A) in para 4.11 of the appellate order dated 11.06.2018 (under reference here) and noted by us in para 11 hereinfore, are not applicable for various reasons. First and foremost reason is that such case laws had been decided in the year 2011 and 2012 when no such provision was on the statute book in section 43CA of the Act. Secondly the assessment years, involved in such case laws are assessment years 2003-04, 2005-06 and 2006-07 whereas section 43CA itself had come into force w.e.f. 24 I.T.A. No. 1731/Mum/2020 Rudra Pratap Tripathi 1.4.2014 and is applicable to the assessment year 2014-15 onwards. Moreover, ITAT Mumbai Bench in the case of Maria Fernandes Cheryl vs. Income Tax Officer reported in 187 ITD 738 has explained the rationalization of provisions of section 50C and section 43CA in the following manner:- 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 reason, Section 50C(1) should not come into play, it was an "unintended consequence" of Section 50(1) that even in such bonafide situations, this provision, which is inherently in the nature of an anti- avoidance provision, is invoked. Once this situation is sought to be addressed, as is the settled legal position- as we will see a little 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 25 I.T.A. No. 1731/Mum/2020 Rudra Pratap Tripathi 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 retrospective effect from the point of time when the related legal provision was introduced". Referring to this decision, and extensively reproducing from the same, including the portion extracted above, Hon'ble Delhi High Court, in the case of CIT v. Ansal Landmark Township (P.) Ltd. [2015] 61 taxmann.com 45/234 Taxman 825/377 ITR 635 (Delhi), has approved this approach and observed that "the Court is of the view that the above reasoning of the Agra Bench of ITAT as regards the rationale behind the insertion of the second proviso to section 40(a)(ia) of the Act and its conclusion that the said proviso is declaratory and curative and has retrospective effect from 1st April 2005, merits acceptance". The same was the path followed by another bench of this Tribunal in the case of Dharamashibhai Sonani v. Asstt. CIT 26 I.T.A. No. 1731/Mum/2020 Rudra Pratap Tripathi [2016] 75 taxmann.com 141/161 ITD 627 which has been approved by Hon'ble Madras High Court in the judgment reported as CIT v. Vummudi Amarendran [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 consideration amount in a sale deed. As noted by the CBDT, while explaining the justification for insertion of section 50C, "(t)he Finance Act, 2002, has inserted a new section 50C in the Income-tax Act to make a special provision for determining the full value of consideration in cases of transfer of immovable property". Section 50C, thus, on a conceptual note, is a provision to address capital gains tax evasion on account of understatement of the consideration. Of course, the 27 I.T.A. No. 1731/Mum/2020 Rudra Pratap Tripathi 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 figure are treated as explained. The insertion of the third proviso to Section 50C(1) provides for this tolerance band with respect to a certain degree of variations between the stamp duty valuation and the stated consideration of an immovable property. In other words, as long as the variations are within the permissible limits, the anti-avoidance provisions of Section 50C do not come into play. As we have noted earlier, the CBDT itself accepts that there could be various bonafide reasons explaining the small variations between the sale consideration of immovable property as disclosed by the assessee vis-à-vis the 28 I.T.A. No. 1731/Mum/2020 Rudra Pratap Tripathi stamp duty valuation for the said immovable property. Obviously, therefore, disturbing the actual sale consideration, for the purpose of computing capital gains, and adopting a notional figure, for that purpose, will not be justified in 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 to Section 50C(1) is in the nature of a remedial measure to address a bonafide situation where there is little justification for invoking an anti-avoidance provision. Similarly, so far as enhancement of tolerance band to 10% by the Finance Act 2020, is concerned, as 29 I.T.A. No. 1731/Mum/2020 Rudra Pratap Tripathi noted in the CBDT circular itself, it was done in response to the representations of 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-àvis 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 be probed further, under section 50C, in 2021, there were no good reasons to probe such variations, under section 50C, in the earlier periods as well. We are, therefore, satisfied that the amendment in the scheme of Section 50 C(1), by inserting the third proviso thereto and by enhancing the tolerance band for variations between the stated sale consideration vis-à-vis stamp duty valuation to 10%, are 30 I.T.A. No. 1731/Mum/2020 Rudra Pratap Tripathi curative in nature, and, therefore, these provisions, even though stated to be prospective, must be held to relate back to the date when the related statutory provision of Section 50C, i.e. 1st April 2003. In plain words, what is means is that even if the valuation of a property, for the purpose of stamp duty valuation, is 10% more than the stated sale consideration, the stated sale consideration will be accepted at the face value 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 dispensation of justice, and such an approach, as is prayed for, is 31 I.T.A. No. 1731/Mum/2020 Rudra Pratap Tripathi an antithesis of the principle of "equality before the law," which is one of our most cherished constitutional values. Our judicial functioning has to be even-handed, transparent, and predictable, and what we decide for one litigant must hold good for all other similarly placed litigants as well. We, therefore, decline to entertain this plea of the assessee. 17. We are in tandem with the above proposition which we follow here in this appeal also in the context of section 43CA. Otherwise, no doubt, the DVO‟s report is very detailed one but the same merely represented „estimates‟ made by him, but does not constitute an information as per the decision of Hon‟ble Supreme Court in the case of ACIT vs. Dhariya Construction Co reported in (2010) 328 ITR 515. In view of such an analysis, we proceed to decide the issue from our end itself. 18. From the table given by the ld. CIT(A) in para 2 of the appellate order, it would be seen that excepting item no.(iv), in all other cases, the range of variation is from 0.86% to 9.96%. Therefore, such difference in valuation deserves to be ignored in view of the proviso below section 43CA, as have been inserted by the Finance Act 2018 and the amendments made therein by various Finance 32 I.T.A. No. 1731/Mum/2020 Rudra Pratap Tripathi Acts from time to time, wherein the permissible limit has been introduced as 10% of the consideration received. Looking to this aspect of the matter, we work out the addition to be sustained at Rs.7,22,500/- as per estimate as given herein below:- Rs. a) Actual sale consideration, as per agreement 37,56,000 b) Valuation as per DVO‟s report 45,16,000 c) Permissible variation @ 10% of Rs.37,56,000/- 4,51,600 d) Addition that should have been sustained by the CIT(A) (b) 3,08,000 e) Addition as worked out by us at Rs.1,48,400 (d)-(c) 1,43,600 19. Accordingly, such an addition as had been sustained by the ld. CIT(A) in relation to Unit No.177/2 as referred to at sl. No.(iv) of the table, is hereby sustained and the appellant gets relief of Rs.74,55,100/- (out of Rs.79,67,500). 20. Another issue involved in the appeal, relates to estimate of agricultural income. As per the version of ld. CIT (A) himself, the appellant had been having 48.59 acres of land under cultivation of his own and his minor children. The appellant‟s contention is that 33 I.T.A. No. 1731/Mum/2020 Rudra Pratap Tripathi the agricultural land had been situated at Satna, his home district and in his absence his close relative Sri Phanindra Bhushan Garg (brother of his wife Smt. Vandana Tripathi) had been looking after the cultivation and other incidental activities. Sri Phanindra Bhushan Garg himself. He has been incurring expenditure on „inputs‟ and selling the crops that were being grown on such agricultural land. The net remittances received from Sri Phanindra Bhushan Garg, were being credited to the capital account of the appellant as appearing in the books of account of his proprietary concern namely Indian Corporation. The remittances so received, after being credited in the capital account of the proprietor i.e. Sri Rudra Pratap Tripathi‟s (the appellant here) capital account, used to be deposited in his bank account. Undisputedly, the appellant himself did not have the details of crops produced, sale of agricultural produce, proof of expenses incurred, proof of storage and proof of transportation of agricultural produce as all such activities were being handled by Sri Phanindra Bhushan Garg and only net of the sale proceeds were being remitted by him. The matter has come up for consideration in the case of Smt. Vandana 34 I.T.A. No. 1731/Mum/2020 Rudra Pratap Tripathi Tripathi (wife of the appellant for the assessment year 2011-12) and the issue was decided by the ld. CIT(Appeals) then after considering the Inspectors report who had been specifically deputed for the purpose. He had met the revenue officials and apprised himself about the crops grown there and after that he had submitted his report. Relying on such reports and information, the ld. CIT(A) had deleted the addition made, out of agricultural income shown by Smt. Vandana Tripathi, as undisclosed income of Smt. Vandana Tripathi. It was pleaded by Sri Garg that same concept could be applied in the case of present appellant also and instead of asking for voluminous details, his version of agricultural income, should be accepted. 21. Proceeding further, Sri Garg submitted that books of account maintained by the appellant for his proprietary concern, namely Indian Corporation (belonging to Indian Logistic Group) had been accepted and no infirmity therein had been found out by the authorities below. The books of account belonging to the proprietary concern of the appellant (wherein net agricultural income had been recorded) had been accepted also by the Authorities below. Under 35 I.T.A. No. 1731/Mum/2020 Rudra Pratap Tripathi these circumstances, no such disallowance and/or treatment given by the ld. Assessing Officer, was called for. 22. Ld. DR on the other hand has relied upon the order of CIT(A) and further submitted that in absence of any details and evidences the agricultural income shown by the assessee is not proved and in any case substantial relief has been given on estimate basis by the Ld. CIT(A). 23. We have given our careful consideration to the matter in its entirety and we find that even the Ld. CIT(A) has accepted that assessee was having agricultural income, from his land holding 48.59 acres in the state of Madhya Pradesh and the books of account wherein net of the agricultural income had been credited. It has been brought on record that in the case of Smt. Vandana Tripathi (wife of the appellant) for the assessment year 2011-12 the issue was decided by the ld. CIT(Appeals) then after considering the Inspectors report who had been specifically deputed for the purpose and had met the revenue officials and apprised himself about the crops grown there and after that he had submitted his report. 36 I.T.A. No. 1731/Mum/2020 Rudra Pratap Tripathi Relying on such reports and information, the ld. CIT(A) had deleted the addition made, out of agricultural income shown by Smt. Vandana Tripathi, as undisclosed income of Smt. Vandana Tripathi. SO it is not in dispute that assessee has been hyaving huge agricultural income from year to year which has been accepted. Accordingly, the income shown by the appellant under the head „agricultural income‟ cannot be disbelieved nor the quantum as it is in consonance with the past years and subsequent assessment years where it has been accepted and future is accepted. Thus, the additions sustained by the ld. CIT (A), to the extent of Rs.4,09,348/- as per para 6 of the appellate order is hereby deleted. 24. Before parting with the matter, it is stated that agriculture in India is dependable on climatic conditions and monsoon and therefore no „yardstick‟ can be laid down for estimating/determining agricultural income. Once it is found that „net agricultural income‟ as had been remitted by Sri Phanindra Bhushan Garg, had duly been recorded in the books of account of the „proprietary concern‟ of 37 I.T.A. No. 1731/Mum/2020 Rudra Pratap Tripathi the appellant, no variation whatsoever is called for, unless anything to the contrary is found. 27. In the result, the appeal is partly allowed in the manner indicated above. Orders pronounced in the open court on 28 th July, 2022. Sd/- Sd/- (S. Rifaur Rahman) (Amit Shukla) Accountant Member Judicial Member मुंबई Mumbai;नदनधंक Dated : 28/07/2022 Sr.PS. Dhananjay आदेशकीप्रतितितिअग्रेतिि/Copy of the Order forwarded to : 1. अपीलधथी/ The Appellant 2. प्रत्यथी/ The Respondent 3. आयकरआयुक्त(अपील) / The CIT(A) 4. आयकरआयुक्त/ CIT- concerned 5. नवभधगीयप्रनतनननध, आयकरअपीलीयअनधकरण, मुंबई/ DR, ITAT, Mumbai 6. गधर्ाफधईल / Guard File आदेशानुसार/ BY ORDER, .उि/सहायकिंजीकार (Dy./Asstt.Registrar) आयकरअिीिीयअतिकरण, मुंबई/ ITAT, Mumbai