S.Bhuvaneswari, CHENNAI V. DCIT Corporate Circle 1(2), CHENNAI

ITA 2944/CHNY/2017

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 2343 (ITAT-CHENNAI)
• Duration Of Justice: 3 year(s) 10 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-10-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 21-04-2021
• Assessment Year: 2013-2014
• Appeal Filed On: 01-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R ANITA
• Assessee Lawyers: R SIVARAMAN
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Retrospective amendment; Set aside; Capital Gains
• Section: 43CA; 43B; 50C; 13; 22

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , D B ENCH, CHENNAI . , . , % BEFORE SHRI V.DURGA RAO, JUDICIAL MEMBER AND SHRI G.MANJUNATHA, ACCOUNTANT MEMBER ./ I.T.A.NO.2944/CHNY/2017 ( / ASSESSMENT YEAR: 2013-14) MRS. S.BHUVANESWARI HALLMARK TOWERS, 4 TH FLOOR, 550 (OLD NO.136) TTK ROAD, ALWARPET, CHENNAI-600 018. VS THE DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE-1(2) CHENNAI. PAN: AADPB 1269K ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR. R.SIVARAMAN, ADVOCATE /RESPONDENT BY : MS. R.ANITA, ADDL.CIT /DATE OF HEARING : 21.10.2021 /DATE OF PRONOUNCEMENT : 27.10.2021 / O R D E R PER G.MANJUNATHA, AM: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER PASSED BY THE LEARNED CIT(A)-1, CHENNAI DATED 27.09.2017 AND PERTAINS TO ASSESSMENT YEAR 2013-14. 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APP EAL:- 1. THE ORDER OF LEARNED CIT(A) DATED 27.09.2017 FO R THE ASSESSMENT YEAR 2013-L4 IS CONTRARY TO THE FACTS AN D CIRCUMSTANCES OF THE CASE AND IS OPPOSED TO THE PRI NCIPLES OF EQUITY, JUSTICE AND FAIR PLAY. 2. THE LEARNED CIT(A) ERRED IN MAKING AN ADDITION A MOUNTING TO RS. 2,67,34750/- BY INVOKING THE PROVISIONS OF S ECTION 50C OF THE INCOME TAX ACT, 1961 WITH RESPECT TO THE VAC ANT AGRICULTURAL LAND SOLD BY THE APPELLANT DURING THE IMPUGNED AY 2013-14. 3. THE LEARNED CIT(A) IS WRONG IN LAW IN MAKING THE ADDITION AMOUNTING TO RS.2,67,34,750/- UNDER SECTION 50C OF THE ACT WITHOUT CONSIDERING THE GUIDELINE RATE OF THE VACAN T AGRICULTURAL LAND PREVAILING AS ON THE DATE OF AGREEMENT TO SELL DATED 09.02.2012. 2 ITA NO. 2944/CHNY/2017 4. THE LEARNED CLT(A) OUGHT TO HAVE APPRECIATED THA T THE PROVISO ENACTED TO SECTION50C BY THE FINANCE ACT, 2 016 W.E.F. 01.04.2017 IS CURATIVE IN NATURE AND THEREFOREHAS T O BE APPLIED RETROSPECTIVELY IN THE CASE OF THE APPELLAN T FOR THE IMPUGNED AY 2013-14. 5. THE LEARNED CLT(A) OUGHT TO HAVE CONSIDERED THE PROVISIONS ENTAILED UNDER SECTION43CA(3) AND (4) OF THE ACT WHICH WOULD SQUARELY APPLY IN THE CASE OF THE APPEL LANT. ON THE STRENGTH OF THE ABOVEMENTIONED GROUNDS AND S UCH OTHER GROUNDS THAT MAY BE SUBMITTED BEFORE OR AT TH E TIME OF HEARING OF THE APPEAL, THE HONBLE ITAT MAY BE PLEA SED TO SET ASIDE THE ORDER OF THE CIT(A) DATED 27.09.2017 AND THUS RENDER JUSTICE. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL FILED HIS RETURN OF INCOME FOR ASSESSMEN T YEAR 2013- 14 ON 05.08.2013 ADMITTING TOTAL INCOME OF RS.4,65 ,94,980/-. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE H AD SOLD A PIECE OF AGRICULTURAL LAND SITUATED AT SHORTIUM VIL LAGE, KANATHUR REDDY KUPPAM, CHENGALPET DISTRICT, KANCHEEPURAM FOR A CONSIDERATION OF RS.5,10,00,000/- AS PER SALE AGREE MENT DATED 09.02.2012 AND RECEIVED ADVANCE SALE CONSIDERATION OF RS.1.00 CRORE THROUGH BANK. THE SAID PROPERTY WAS REGISTERE D IN FAVOUR OF THE BUYER BY EXECUTING SALE DEED IN MAY, 2012 FO R CONSIDERATION OF RS.5,10,00,000/-. HOWEVER, GUIDELI NE VALUE OF PROPERTY AS ON DATE OF SALE DEED WAS AT RS.7,76,70 ,000/-. THE ASSESSEE HAS COMPUTED LONG TERM CAPITAL GAIN DERIVE D FROM SALE OF PROPERTY BY ADOPTING SALE CONSIDERATION 3 ITA NO. 2944/CHNY/2017 OFRS.5,10,00,000/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER, HOWEVER, NOT C ONVINCED WITH LONG TERM CAPITAL GAIN COMPUTED BY THE ASSESSE E BY ADOPTING SALE CONSIDERATION AS SHOWN IN SALE AGREEM ENT. THUS, HE HAS ADOPTED GUIDELINE VALUE FIXED FOR PAYMENT O F STAMP DUTY BY THE STATE GOVERNMENT AUTHORITIES BY INVOKI NG PROVISIONS OF SECTION 50C OF THE INCOME TAX ACT, 19 61, AND DETERMINED LONG TERM CAPITAL GAIN BY ADOPTING DEEME D SALE CONSIDERATION AT RS.7,76,70,000/- AND MADE ADDITION OF RS.2,67,34,750/- TO THE TOTAL INCOME. THE RELEVANT FINDINGS OF THE ASSESSING OFFICER ARE AS UNDER:- IT IS MENTIONED IN THE SALE DEED THAT THE SOLD PRO PERTY OF THE LAND IS VACANT AGRICULTURAL LAND. HOWEVER THE SOLD PROPERTY IS NOT AN AGRICULTURAL LAND FOR THE FOLLOWING REASONS. (A) AS ON 01/04/2012, THERE WAS A REVISION IN THE G UIDE LINE VALUE ON THE SOLD LANDS. THE GUIDE LINE VALUE PER A CRE WAS ABOLISHED AND IT WAS VALUED IN SQUARE FEET ONLY. TH E RATE PER SQ.FT IS RS.2,100/-. WHEN THE LANDS ARE VALUED IN S QUARE FEET AND NOT IN ACRE, THEN THE SOLD LANDS WAS NOT AN AGR ICULTURAL LAND. IT IS PERTINENT TO NOTE THAT IN THE RECORDS O F REGISTRATION DEPARTMENT THE LAND SITUATED IN THE SURVEY NO. 103/ 1, NEW SURVEY NO. 103/30 AT KANATHUR REDDY KUPPAM IS CLASS IFIED AS RESIDENTIAL CLASS I - TYPE I, WHICH IS REPRODUCED AS BELOW: 4 ITA NO. 2944/CHNY/2017 5 ITA NO. 2944/CHNY/2017 (B) SIMILARLY, THE SOLD LANDS IS SITUATED AT SHORTI UM VILLAGE,KANATHUR REDDY KUPPAM, CHENGALPUT DISTRICT, KANCHEEPURAM HAS BEEN WITH IN THE 8 KM DISTANCE FTO M THE EXTENDED CORPORATION OF CHENNAI. HENCE, IT LOOSES T HE VALUE OF AGRICULTURAL LAND. IN THE SALE TRANSACTIONS ENTERED BY THE AS SESSEE, THE VALUE ASSESSED BY THE STATE GOVERNMENT FOR PURPOSE OF PAY MENT OF STAMP DUTY IN RESPECT OF THE SALE IS HIGHER THAN TH E SALE CONSIDERATION STATED TO BE RECEIVED. HENCE THE MARK ET VALUE IS DEEMED TO BE THE FULL, VALUE OF CONSIDERATION RECEI VED OR ACCRUED AS A RESULT OF SUCH TRANSACTION. ACCORDINGLY, TAKING INTO CONSIDERATIONS OF THE STAMP VALUE AUTHORITIES WHO HAVE ADOPTED THE VALUE OF THE ABOVE PROPERTY AT RS. 7,77,34,750/-. (IN THE ANNEXURE LA, THE STATE G OVERNMENT AUTHORITY FOR REGISTRATION PURPOSE HAS ARRIVED THE VALUE OF RS. 7,77,34,750/- BY DETERMINING THE LAND VALUE AS RS.7 ,77,34,750 AND RS.30,000/- AS BUILDING VALUE OF 300 SQ.FT.) IN VIEW OF THE ABOVE, AS PER THE MATERIALS AVAILABL E ON RECORD AND ALSO AFTER DISCUSSING THE SAME WITH THE ASSESSE ES REPRESENTATIVE, THE ASSESSMENT IS COMPLETED BY INVO KING THE PROVISIONS OF SECTION 5CC OF THE I.T. ACT 1961. 6 ITA NO. 2944/CHNY/2017 4. BEING AGGRIEVED BY THE ASSESSMENT ORDER, THE ASS ESSEE PREFERRED AN APPEAL BEFORE THE LEARNED CIT(A). BEFO RE THE LEARNED CIT(A), THE ASSESSEE HAS CHALLENGED RECOMPU TATION OF LONG TERM CAPITAL GAIN BY INVOKING PROVISIONS OF S ECTION 50C(1) OF THE INCOME TAX ACT, 1961 ON THE GROUND THAT AS P ER PROVISO INSERTED TO SECTION 50C BY THE FINANCE ACT, 2016 W. E.F 01.04.2017, VALUE OF PROPERTY AS PER SALE AGREEMENT SHOULD BE TAKEN FOR COMPUTING CAPITAL GAIN. THE ASSESSEE FUR THER CONTENDED THAT WHEN THE PROPERTY WAS SOLD BY ENTERI NG INTO AGREEMENT OF SALE, GUIDELINE VALUE OF PROPERTY FI XED BY THE AUTHORITIES FOR PAYMENT OF STAMP DUTY WAS LESS THA N CONSIDERATION AGREED FOR TRANSFER OF PROPERTY. HOW EVER, GUIDELINE VALUE HAS BEEN SUBSEQUENTLY REVISED BY T HE AUTHORITIES W.E.F. 01.04.2012, I.E. SUBSEQUENT TO A GREEMENT OF SALE AND THUS, VALUE FIXED BY THE AUTHORITIES SU BSEQUENT TO DATE OF AGREEMENT TO SALE CANNOT BE ADOPTED FOR COM PUTING LONG TERM CAPITAL GAIN. 5. THE LEARNED CIT(A), AFTER CONSIDERING RELEVANT SUBMISSIONS OF THE ASSESSEE AND ALSO RELIED UPON C ERTAIN JUDICIAL PRECEDENTS, INCLUDING DECISION OF THE HON' BLE SUPREME 7 ITA NO. 2944/CHNY/2017 COURT IN THE CASE OF ALLIED MOTORS PVT.LTD. VS. CI T 224 ITR 677 OBSERVED THAT THE PROVISO INSERTED TO SECTION 50C B Y THE FINANCE ACT, 2016 W.E.F 01.04.2017 DOES NOT OPERATE RETROSPECTIVELY WITH EFFECT FROM INSERTION OF THE P ROVISIONS OF SECTION 50C AND THUS, REJECTED ARGUMENTS OF THE ASS ESSEE AND UPHELD ADDITIONS MADE BY THE ASSESSING OFFICER FO R RECOMPUTATION OF LONG TERM CAPITAL GAIN FROM SALE O F PROPERTY. THE LEARNED CIT(A) HAS ALSO DISCUSSED ISSUE IN LIG HT OF AGREEMENT TO SALE BETWEEN PARTIES AND SALE DEED FO R CONVEYANCE TITLE OF THE PROPERTY AND OBSERVED THAT SALE AGREEMENT BY THE ASSESSEE WITH DIFFERENT PERSON AND SALE DEED WAS EXECUTED IN FAVOUR OF PERSON OTHER THAN THE PER SON AGREED TO BUY PROPERTY AND THUS, IT IS NOT A CASE OF THE A SSESSEE THAT THERE WAS SALE AGREEMENT BETWEEN THE PARTIES FIXIN G CONSIDERATION FOR TRANSFER OF PROPERTY BEFORE ENHAN CEMENT OF GUIDELINE VALUE BY THE AUTHORITIES AND ACCORDINGL Y, OPINED THAT ASSESSEES CASE DOES NOT FALL WITHIN THE PROVISION S OF SECTION 50C OF THE INCOME TAX ACT, 1961. THE RELEVANT FINDI NGS OF THE LEARNED CIT(A) ARE AS UNDER:- 4. THE FIRST ISSUE RELATES TO APPLICATION OF S.50 C IN RESPECT OF THE SALE OF LAND ON WHICH LONG TERM CAPITAL GAIN OF RS.4.10 CRORES HAVE BEEN DISCLOSED BY THE APPELLANT IN ITS RETURN OF INCOME. THE APPELLANT HAD ENTERED INTO AN AGREEMENT FOR SALE 8 ITA NO. 2944/CHNY/2017 ON 09.02.2012 WITH ONE MR. MOHAMED JABIR FOR THE SA LE OF VACANT LAND SITUATED AT KANATHUR RADIKUPPAM VILLAGE FOR AN AGREED CONSIDERATION OF RS.5. 10 CRORES. THE APPELL ANT ALSO RECEIVED AN ADVANCE OF RS. 1 CRORE ON 08.02.2012 AN D FURTHER AMOUNT AGGREGATING TO RS.3 CRORES UPTO 31.03.2012. ACCORDING TO THE APPELLANT, THE GUIDELINE VALUE OF THE PROPER TY ON THE DATE OF THE AGREEMENT TO SELL, I.E. 09.02.20 12 WAS RS.1 .24 CRORES WHEREAS THE APPELLANT HAS AGREED TO SELL THE PROPER TY AT R.5.10 CRORES. THE GUIDELINE VALUE WAS, HOWEVER, REVISED O N 01.04.2012 WHEREIN VALUE PER ACRE WAS ABOLISHED AND VALUE PER SQ.FT. WAS DETERMINED AT RS.7.76 CRORES. THE PR OPERTY WAS REGISTERED THROUGH A REGISTERED DOCUMENT ON 7TH MAY 2012. THE ASSESSING OFFICER HAS CONCLUDED THAT THE GUIDEL INE VALUE APPLICABLE ON THE DATE OF THE SALE DEED ALONE IS TO BE CONSIDERED WHICH IS DETERMINED AT RS.7.76 CRORES AG AINST THE SALE CONSIDERATION OF RS.5. 10 CRORES APPLICABLE ON THE DATE OF AGREEMENT TO SELL. ACCORDINGLY, ADDITION OF RS.2.67 CRORES HAS BEEN MADE BY THE ASSESSING OFFICER. 5. IN THE COURSE OF APPEAL, THE APPELLANT SUBMITTED THAT THE GUIDELINE VALUE ON THE DATE OF THE AGREEMENT SHOULD BE CONSIDERED AND NOT ON THE DATE OF REGISTRATION. THE APPELLANT FURTHER SUBMITTED THAT SHE HAD ENTERED INTO AN AGRE EMENT TO SELL ON 09.02.2012 AND HAD RECEIVED A CONSIDERATION OF R S. 1 CRORE ON THE SAME DATE. MAJOR PART OF THE CONSIDERATION, I.E. RS.3 CRORES WAS ALSO RECEIVED BEFORE 31.03.2012. THEREFO RE, ACCORDING TO THE APPELLANT THE TRANSACTION HAS TO B E EVALUATED IN TERMS OF GUIDELINE VALUE ON THE DATE OF AGREEMEN T TO SELL AND NOT ON THE BASIS OF GUIDELINE VALUE ON THE DATE OF SALE DEED. IN THIS REGARD, THE APPELLANT HAS FURTHER PLACED RELIA NCE UPON THE AMENDMENT TO S.50C BY THE FINANCE ACT, 2016 WHEREBY A PROVISO HAS BEEN INTRODUCED TO THE SAID SECTION WHI CH PROVIDES THAT WHERE THE DATE OF AGREEMENT FIXING THE CONSIDE RATION AND THE DATE OF REGISTRATION FOR THE TRANSFER OF CAPITA L ASSET ARE NOT THE SAME, THE STAMP DUTY VALUATION AS ON THE DATE O F AGREEMENT MAY BE TAKEN INTO ACCOUNT U/S.50C IF THE CONSIDERAT ION OR A PART THEREOF HAS BEEN RECEIVED THROUGH AN ACCOUNT PAYEE CHEQUE ON OR BEFORE THE DATE OF AGREEMENT. 6. THE APPELLANTS CONTENTIONS ARE EXAMINED. FIRSTL Y IT IS OBSERVED THAT THE AGREEMENT TO SELL DATED 19.02.201 2 IS BETWEEN THE APPELLANT MRS. S. BHUVANESHWARI AND ONE MR. MOHAMMED ZABIR. ON THE OTHER HAND, THE SALE DEED RE GISTERED ON 07.05.2012 IS BETWEEN THE APPELLANT AND MS. MARI AM MEHMOOD, MRS. THIAKA SITHI ALIYA AND MR. MOHAMED ZA BIR. THUS THE PARTIES WITH WHOM THE AGREEMENT TO SELL WA S ENTERED INTO AND THE PARTIES BETWEEN WHOM THE SALE DEED IS ENTERED 9 ITA NO. 2944/CHNY/2017 INTO ARE DIFFERENT. FOR THIS REASON ALONE THE AGREE MENT TO SELL CANNOT BE TAKEN AS THE BASIS FOR THE SALE BECAUSE T HE ACTUAL SALE IS REGISTERED IN THE NAME OF THREE PERSONS OUT OF WHICH TWO ARE NOT PARTY TO THE ORIGINAL AGREEMENT TO SELL. 7. BE THAT AS IT MAY, THE PROVISIONS OF SECTION 50C ARE UNAMBIGUOUS AND IT SPECIFICALLY PROVIDES THAT THE V ALUE ADOPTED BY ANY AUTHORITY FOR THE PURPOSE OF PAYMENT OF STAM P DUTY SHOULD BE THE VALUE OF FULL SALE CONSIDERATION IN R ESPECT OF A TRANSFER OF CAPITAL ASSET BEING LAND OR BUILDING OR BOTH. THUS, THE SECTION DOES NOT GIVE ANY SCOPE FOR CONSIDERING ANY OTHER VALUE OTHER THAN THE VALUE THAT IS ASSESSED FOR THE PURPO SE OF STAMP DUTY VALUATION. IN THIS CASE, THE SALE DEED CLEARLY DISCLOSES THE VALUE OF THE PROPERTY AT RS.7,76,70,000/-. IN VIEW OF THE SAME, THERE IS NO SCOPE TO CONSIDER ANY OTHER VALUATION T HAT MAY HAVE PREVAILED ON THE DATE OF AGREEMENT TO SELL. 8. AS REGARDS THE APPELLANTS RELIANCE UPON THE PRO VISO ENACTED TO THE SECTION BY THE FINANCE ACT, 2016, IT IS HELD THAT THE SAID PROVISO IS APPLICABLE W.E.F.0 1.04.2017 I.E. A.Y. 2 017-18 ONWARDS. THE PROVISO READS AS FOLLOWS: PROVIDED THAT WHERE THE DATE OF THE AGREEMENT FIXIN G THE AMOUNT OF CONSIDERATION AND THE DATE OF REGISTRATIO N FOR THE TRANSFER OF THE CAPITAL ASSET ARE NOT THE SAME, THE VALUE ADOPTED OR ASSESSED OR ASSESSABLE BY THE STAMP VALUATION AU THORITY ON THE DATE OF AGREEMENT MAY BE TAKEN FOR THE PURPOSES OF COMPUTING FULL VALUE OF CONSIDERATION FOR SUCH TRA NSFER. PROVIDED THAT THE FIRST PROVISO 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 ACCOU NT PAYEE BANK DRAFT OR BY USE OF ELECTRONIC CLEARING SYSTEM THROUGH A BANK ACCOUNT, ON OR BEFORE THE DATE OF AGREEMENT FO R TRANSFER. REFERENCE IS MADE TO THE MEMORANDUM TO THE FINANCE ACT, 2016 INTRODUCING THE PROVISO. THE SAME IS REPRODUCE D BELOW FOR READY REFERENCE: 29.1 SECTION 50C OF THE INCOME-TAX ACT PROVIDES THA T IN CASE OF TRANSFER OF A CAPITAL ASSET BEING LAND OR BUILDING OR BOTH, THE VALUE ADOPTED OR ASSESSED BY THE STAMP VALUATION AU THORITY FOR THE PURPOSE OF PAYMENT OF STAMP DULY SHALL BE TAKEN AS THE FULL VALUE OF CONSIDERATION FOR THE PURPOSES OF COMPUTAT ION OF CAPITAL GAINS. THIS PROVISION DOES NOT PROVIDE ANY RELIEF WHERE THE SELLER HAS ENTERED INTO AN AGREEMENT TO SELL TH E PROPERLY MUCH BEFORE THE ACTUAL DATE OF TRANSFER OF THE IMMO VABLE 10 ITA NO. 2944/CHNY/2017 PROPERTY AND THE SALE CONSIDERATION IS FIXED IN SUC H AGREEMENT, WHEREAS SIMILAR PROVISION EXISTS IN SECTION 43CA OF THE INCOME- TAX ACT I.E. WHEN AN IMMOVABLE PROPERTY IS SOLD AS STOCK-IN- TRADE. 29.2 SECTION 50C OF THE INCOME-TAX ACT HAS BEEN AME NDED SO AS TO PROVIDE THAT WHERE THE DATE OF THE AGREEMENT FIXING THE AMOUNT OF CONSIDERATION FOR THE TRANSFER OF IMMOVAB LE PROPERLY AND THE DATE OF REGISTRATION ARE NOT THE SAME, THE STAMP DUTY VALUE ON THE DATE OF THE AGREEMENT MAY BE TAKEN FOR THE PURPOSES OF COMPUTING THE FULL VALUE OF CONSIDERATI ON. IT HAS BEEN FURTHER PROVIDED THAT THIS PROVISION SHALL APP LY ONLY IN A CASE WHERE THE AMOUNT OF CONSIDERATION REFERRED TO THEREIN, OR A PART THEREOF HAS BEEN PAID BY WAY OF AN ACCOUNT PAY EE CHEQUE OR ACCOUNT PAYEE BANK DRAFT OR USE OF ELECTRONIC CL EARING SYSTEM THROUGH A BANK ACCOUNT, ON OR BEFORE THE DATE OF TH E AGREEMENT FOR THE TRANSFER OF SUCH IMMOVABLE PROPERTY. 29.3 APPLICABILITY: THIS AMENDMENT TAKES EFFECT FRO M 1ST OF APRIL, 2017 AND WILL, ACCORDINGLY, APPLY FROM ASSES SMENT YEAR 2017-18 AND SUBSEQUENT ASSESSMENT YEARS. THE APPELLANT, HOWEVER, SEEKS TO GIVE A RETROSPECTI VE EFFECT TO THE PROVISO CONTRARY TO THE SPECIFIC MANDATE OF THE LEGISLATURE AT THE TIME OF ENACTING THE PROVISO. 9. THE TRUE NATURE OF A PROVISO AND THE PRINCIPLES APPLICABLE FOR THE INTERPRETATION OF THE SAME HAVE BEEN CONSIDERED BY THE HONBLE SUPREME COURT IN THE CASE OF S. SUNDARAM PIL LAI & OTHERS VS. V.R. PATTABIRAMAN & OTHERS (1985) 1 SCC 591. THE RELEVANT PART IS EXTRACTED HERE: 31. IN THE CASE OF LOCAL GOVERNMENT BOARD V. SOUTH STONEHAND UNION, LORD MACNAGHTEN MADE THE FOLLOWING OBSERVATI ON: I THINK THE PROVISO IS A QUALIFICATION OF THE PRECE DING ENACTMENT, WHICH IS EXPRESSED IN TERMS TOO GENERAL TO BE QUITE ACCURATE. 32. IN ISHVERLAL THAKORELAL ALMAULA V. MOTIBHAI NAG JIBHAI IT WAS HELD THAT THE MAIN OBJECT OF A PROVISO IS MERELY TO QUALIFY THE MAIN ENACTMENT. IN MADRAS AND SOUTHERN MAHRATTA RAI LWAY CO. LTD. V. BEZWADA MUNICIPALITY, LORD MACMILLAN OBSERV ED THUS: THE PROPER FUNCTION OF A PROVISO IS TO EXCEPT AND D EAL WITH A CASE WHICH WOULD OTHERWISE FALL WITHIN THE GENERAL LANGUAGE OF THE MAIN ENACTMENT, AND ITS EFFECT IS CONFINED TO T HAT CASE. 11 ITA NO. 2944/CHNY/2017 33. THE ABOVE CASE WAS APPROVED BY THIS COURT IN C .I.T. V. INDO MERCANTILE BANK LTD. WHERE KAPUR, J. HELD THAT THE PROPER FUNCTION OF A PROVISO WAS MERELY TO QUALIFY THE GEN ERALITY OF THE MAIN ENACTMENT BY PROVIDING AN EXCEPTION AND TAKING OUT, AS IT WERE, FROM THE MAIN ENACTMENT A PORTION WHICH, BUT FOR THE PROVISO, WOULD FALL WITHIN THE MAIN ENACTMENT. IN S HAH BHOJRAJ KUERJI OIL MILLS AND GINNING FACTORY V. SUBHASH CHA NDRA YOGRAJ SIRTHA, HIDAYATULLAH, J., AS HE THEN WAS, VERY APTL Y AND SUCCINCTLY INDICATED THE PARAMETERS OF A PROVISO TH US: AS A GENERAL RULE, A PROVISO IS ADDED TO AN ENACTME NT TO QUALIFY OR CREATE AN EXCEPTION TO WHAT IS IN THE ENACTMENT, AND ORDINARILY, A PROVISO IS NOT INTERPRETED AS SLATING A GENERAL RULE. 10. APPLYING THESE PRINCIPLES TO THE PROVISO INSERT ED BY THE FINANCE ACT OF 2016, IT IS OBSERVED THAT THE PROVIS O LAYS DOWN AN EXCEPTION TO THE GENERAL RULE CONTAINED IN THE S UB-SECTION (1) OF SEC. 50C. SECTION 50C(1) PROVIDES THAT WHERE A C APITAL ASSET IN THE NATURE OF LAND OR BUILDING IS TRANSFERRED AN D THE VALUE OF CONSIDERATION RECEIVED BY THE ASSESSEE IS LESS THAN THE VALUE ASSESSED OR ASSESSABLE FOR THE PURPOSES OF STAMP DU TY, SUCH VALUE ASSESSED OR ASSESSABLE FOR STAMP DUTY SHOULD BE ADOPTED FOR THE PURPOSE OF SECTION 48. THIS IS THE GENERAL RULE APPLICABLE TO ALL SALE TRANSACTIONS OF LAND AND BUI LDING. THE PROVISO CONTAINS AN EXCEPTION TO THIS RULE WHEREIN IT TALKS OF THOSE TRANSFERS OF LAND AND BUILDING WHERE THE DATE OF AGREEMENT FIXING THE AMOUNT OF CONSIDERATION AND TH E DATE OF REGISTRATION ARE NOT THE SAME AND THE CONSIDERATION FOR THE TRANSACTION HAS BEEN RECEIVED BY WAY OF AN ACCOUNT PAYEE CHEQUE OR THROUGH ELECTRONIC MODE ON OR BEFORE THE DATE OF AGREEMENT. IN SUCH CASES, THE PROVISO ENACTS THAT T HE STAMP VALUE ON THE DATE OF AGREEMENT MAY BE TAKEN AS FULL CONSIDERATION. THE LANGUAGE OF MAIN SECTION IS UNAM BIGUOUS AND DEALS WITH ALL CASES AS A GENERAL RULE WHEREIN THE SALE CONSIDERATION SHOULD BE SUBSTITUTED BY THE STAMP VA LUATION AS ON THE DATE OF REGISTRATION. ONLY IN THE EXCEPTIONS COVERED BY THE PROVISO, THE STAMP VALUATION ON THE DATE OF AGR EEMENT TO SELL CAN BE TAKEN. THE PROVISO IS NEITHER IN THE NA TURE OF AN EXPLANATION NOR IS IT CLARIFICATORY OF THE MAIN SEC TION. 11. THE HONBLE SUPREME COURT IN THE CASE OF ALLIED MOTORS P. LTD. VS. CIT 224 ITR 677 HAD THE OCCASION TO CONSID ER WHETHER THE 1ST PROVISO TO SECTION 43B COULD HAVE RETROSPEC TIVE EFFECT. THE HONBLE SUPREME COURT HELD THAT THE PROVISO SUP PLIES AN OBVIOUS OMISSION AND BUT FOR THIS PROVISO THE AMBIT OF SECTION 43B BECOMES UNDULY WIDE BRINGING WITHIN ITS SCOPE T HOSE PAYMENTS WHICH WERE NEVER INTENDED TO BE DISALLOWED . THE COURT WENT ON TO HOLD THAT A PROVISO WHICH IS INSER TED TO REMEDY 12 ITA NO. 2944/CHNY/2017 UNINTENDED CONSEQUENCES AND MAKE THE PROVISION WORK ABLE, A PROVISO WHICH SUPPLIES AN OBVIOUS OMISSION IN THE S ECTION REQUIRED TO BE TREATED AS RETROSPECTIVE SO THAT A R EASONABLE INTERPRETATION CAN BE GIVEN TO THE SECTION AS A WHO LE. IN THIS CASE, HOWEVER, SUB-SECTION (1) OF SECTION 50C IS CL EAR AND UNAMBIGUOUS AND CANNOT BE REGARDED AS UNWORKABLE OR RESULTING IN UNINTENDED CONSEQUENCES. THE PROVISO I S ALSO NOT INTENDED TO REMOVE ANY OBVIOUS OMISSION OR MAKE THE SECTION WORKABLE. THE PROVISO CONSTITUTES A CONSCIOUS AMEND MENT TO CARVE OUT AN EXCEPTION TO THE MAIN RULE ONLY WHEN C ERTAIN CONDITIONS ARE FULFILLED. THE PROVISO HAS THE EFFEC T OF GIVING AN ENTIRELY DIFFERENT TREATMENT TO THE EXCEPTIONS COVE RED BY IT. THEREFORE, IT CANNOT BE SAID THAT IT SUPPLIES ANY O BVIOUS OMISSION TO THE MAIN SECTION. 12. THE MADRAS HIGH COURT IN THE CASE OF CIT VS. SU GANTHA RAVINDRAN 352 ITR 488 HAD THE OCCASION TO CONSIDER WHETHER THE INSERTION OF THE WORDS OR ASSESSABLE IN SECTIO N 50C THROUGH THE FINANCE ACT, 2009, W.E.F 01.10.2009, CAN HAVE A PPLICATION WITH RESPECT TO EARLIER PERIODS VIZ. A.Y. 2005-06. AT PARAGRAPH 10 THE HIGH COURT HAS HELD THAT THE WORD OR ASSESS ABLE INCLUDED IN SECTION 50C W.E.F. 01.10.2009 IS NEITHE R A CLARIFICATION NOR AN EXPLANATION TO THE ALREADY EXI STING PROVISION. THE HIGH COURT HAS HELD THAT THE AMENDMENT HAS THE EFFECT OF INCLUDING A NEW CLASS OF TRANSACTIONS WITHIN THE AM BIT OF SECTION 50C, NAMELY TRANSFER OF PROPERTY WITHOUT OR BEFORE REGISTRATION. HENCE, THE HIGH COURT HELD THAT THE SAID AMENDMENT COULD NOT HAVE RETROSPECTIVE EFFECT. 13. THE AMENDMENT INSERTING THE PROVISO TO SECTION 50C RELIED UPON BY THE APPELLANT IS ALSO IN THE SAME CATEGORY AS THE AMENDMENT CONSIDERED BY THE MADRAS HIGH COURT IN TH E CASE OF R. SUGANTHA RAVINDRAN (SUPRA). THE SECTION AS ORIGI NALLY ENACTED WAS APPLICABLE TO ALL SALE TRANSACTIONS WHE RE THE CONVEYANCE WAS EXECUTED THROUGH REGISTERED DOCUMENT S. IN ALL SUCH CASES, THE STAMP DUTY VALUE WAS DEEMED TO BE T HE SALE CONSIDERATION. THE AMENDMENT IN 2009 ADDING THE WOR DS OR ASSESSABLE HAD THE EFFECT OF BRINGING WITHIN THE A MBIT OF THE SECTION TRANSACTIONS OF SALE THAT WERE EFFECTED WIT HOUT REGISTRATION. IN CASE OF SUCH TRANSACTIONS, THE VAL UE OF THE PROPERTY IS THE NOTIONAL STAMP DUTY VALUE ASSESSABL E IF A REGISTERED DOCUMENT HAD BEEN EXECUTED ON THE SAME D ATE WHEN THE AGREEMENT FIXING THE SALE CONSIDERATION IS ENTERED INTO. THE SECTION THEREFORE ENVISAGES TWO TYPES OF SITUATIONS. ONE WHERE THERE IS A TRANSFER OF PROPERTY THROUGH A REGISTERED DOCUMENT IN WHICH CASE THE STAMP DUTY VALUATION AS APPLICABLE FOR THE DOCUMENT IS TO BE ADOPTED. THE SECOND CATEG ORY CONSIDERED BY THE SECTION CONSISTS OF TRANSACTIONS WHICH ARE 13 ITA NO. 2944/CHNY/2017 EFFECTED WITHOUT ANY REGISTRATION. IN THOSE CASES T HE VALUATION IS A NOTIONAL VALUATION OF THE STAMP DUTY THAT WOULD H AVE BEEN PAYABLE IF THE TRANSACTION HAD BEEN REGISTERED. THE 2016 AMENDMENT ENVISAGES YET ANOTHER CATEGORY OF TRANSAC TIONS IN RESPECT OF WHICH A FURTHER EXCEPTION IS BEING MADE. THE PROVISO DEALS WITH TRANSACTIONS OF SALE THROUGH DULY REGIST ERED DOCUMENT ON A DATE DIFFERENT FROM THE DATE WHEN THE AGREEMENT FIXING THE SALE CONSIDERATION (AGREEMENT TO SELL) I S ENTERED INTO, AND A PART OF THE CONSIDERATION HAS BEEN RECEIVED O N THE DATE OF SUCH AGREEMENT TO SELL THROUGH BANKING CHANNELS. IN RESPECT OF SUCH TRANSACTIONS, THE PROVISO ENACTS THAT THE S TAMP DUTY VALUE ON THE DATE OF AGREEMENT: TO SELL WILL BE CON SIDERED. THIS IS AT VARIANCE WITH THE MAIN SECTION. SUCH A TRANSA CTION WOULD HAVE BEEN SUBJECTED TO VALUE AS ON THE DATE OF REGI STRATION, PRIOR TO 2016. NOW THE VALUE TO BE TAKEN IS AS ON T HE DATE OF AGREEMENT. THE PROVISO NO DOUBT DOES NOT BRING INTO THE AMBIT OF SECTION 50C ANY TRANSACTION THAT WAS NOT EARLIER COVERED BY THE SECTION. HOWEVER, THE PROVISO DEFINITELY CHANGE S THE BASIS OF DETERMINING THE SALE CONSIDERATION UNDER THE SAI D SECTION WHICH CONSTITUTES A MARKED DEPARTURE FROM THE MAIN SECTION. IT HAS APPLICATION ONLY IN THOSE CASES THAT FULFILS CE RTAIN CONDITIONS SUCH AS RECEIPT OF SALE CONSIDERATION THROUGH BANKI NG CHANNELS OR BY DIGITAL MODE ON OR BEFORE THE DATE OF AGREEME NT TO SELL. FURTHER, IT IS ALSO POSSIBLE THAT THE STAMP DUTY VA LUATION ON THE DATE OF REGISTRATION MAY BE LOWER THAN THE VALUATIO N PREVAILING ON THE DATE OF AGREEMENT TO SELL. THEREFORE, THE SE CTION CAN OPERATE TO THE PREJUDICE OF THE TAX PAYER ALSO IN C ERTAIN SITUATIONS. JUST AS THE HONBLE MADRAS HIGH COURT H ELD THAT THE 2009 AMENDMENT CANNOT HAVE RETROSPECTIVE EFFECT AS IT BROUGHT TO TAX A NEW CLASS OF TRANSACTIONS, THE 2016 AMENDM ENT ALSO CANNOT HAVE RETROSPECTIVE EFFECT AS IT CHANGES THE BASIS OF DETERMINING THE CONSIDERATION IN RESPECT OF CERTAIN SPECIFIED CATEGORY OF TRANSACTIONS. 14. FOR ALL THESE REASONS, IT IS HELD THAT THE PRO VISO CANNOT HAVE RETROSPECTIVE EFFECT. RESPECTFULLY FOLLOWING THE PR INCIPLES LAID DOWN BY THE HONBLE JURISDICTIONAL HIGH COURT IN TH E CASE OF R. SUGANTHA RAVINDRAN, IT IS HELD THAT THE PROVISO INS ERTED W.E.F. 01.04.2017 DOES NOT HAVE APPLICATION DURING THE REL EVANT PREVIOUS YEAR. ABSENT THE PROVISO, THE LANGUAGE OF THE SECTION IS UNAMBIGUOUS AND DOES NOT PERMIT ANY ALTERNATE INTERPRETATION. 15. FURTHER, IN THIS CASE, AS POINTED OUT IN PARA 6, THE REGISTERED SALE DEED IS BETWEEN THE APPELLANT AS VE NDOR AND 3 PERSONS AS BUYERS. THERE IS NO AGREEMENT TO SELL BE TWEEN THE APPELLANT AND THESE 3 PERSONS. SO THIS IS A CASE WH ERE THERE IS ONLY A SALE DEED THAT HAS BEEN REGISTERED WITHOUT A 14 ITA NO. 2944/CHNY/2017 CORRESPONDING AGREEMENT TO SELL BETWEEN THE SAME PA RTIES. THEREFORE, THE APPELLANTS CASE DOES NOT FALL WITHI N THE PROVISO. FOR ALL THESE REASONS, THIS GROUND OF APPEAL IS DIS MISSED. 6. THE LEARNED A.R FOR THE ASSESSEE SUBMITTED THAT THE LEARNED CIT(A) HAS ERRED IN CONFIRMING ADDITIONS MA DE BY THE ASSESSING OFFICER TOWARDS RECOMPUTATION OF LONG TE RM CAPITAL GAIN FROM SALE OF PROPERTY BY INVOKING PROVISIONS OF SECTION 50C(1) OF THE INCOME TAX ACT, 1961, WITHOUT APPRECI ATING FACT THAT GUIDELINE VALUE OF PROPERTY AS ON DATE OF AG REEMENT TO SALE DATED 09.02.2012 IS LESS THAN AGREED CONSIDERA TION FIXED FOR SALE OF PROPERTY. THE LEARNED A.R FURTHER SUB MITTED THAT THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED FACT THAT PROVISO ENACTED TO SECTION 50C BY THE FINANCE ACT, 2016 W.E .F 01.04.2017 IS CURATIVE IN NATURE AND THEREFORE, HAS TO BE APPLIED RETROSPECTIVELY, IN VIEW OF THE DECISION OF THE HONBLE MADRAS HIGH COURT IN THE CASE OF CIT VS.VUMMUDI AMA RENDRAN (2020) 120 TAXMANN.COM 171 (MAD). THE LEARNED A. R FURTHER REFERRING TO SALE AGREEMENT, SALE DEED BETWEEN PART IES AND REGISTRATION (TAMIL NADU AMENDMENT) ACT, 2012, SUB MITTED THAT THE ASSESSING OFFICER AS WELL AS LEARNED CIT( A) HAVE MAINLY GONE ON THE BASIS OF NON-REGISTRATION OF SAL E AGREEMENT TO MAKE ADDITIONS TOWARDS CAPITAL GAIN BY ADOPTING GUIDELINE 15 ITA NO. 2944/CHNY/2017 VALUE OF PROPERTY AS ON THE DATE OF REGISTRATION WITHOUT APPRECIATING FACT THAT REGISTRATION OF DOCUMENT CON FERRING RIGHT AND TITLE OF PROPERTY WAS MADE MANDATORY BY AN AM ENDMENT TO THE ACT WITH EFFECT FROM OCTOBER, 2012 AND THUS, PRIOR TO SAID DATE, REGISTRATION OF ANY DOCUMENT WAS NOT NECESSA RY. FURTHER, THE LEARNED CIT(A) HAS GONE TO OBSERVE THAT SALE AG REEMENT WAS ENTERED INTO WITH DIFFERENT PERSON AND SALE DEE D WAS EXECUTED IN FAVOUR OF PERSON OTHER THAN THE AGREED PERSON, WITHOUT APPRECIATING FACT THAT THE ASSESSEE HAS AGR EED TO SELL PROPERTY TO MR.MOHAMED ZABEER AND SAID PROPERTY HA S BEEN REGISTERED IN THE NAME OF HIS MOTHER AND SISTER. TH EREFORE, FOR THAT REASON HE CANNOT SAID THAT THERE IS NO AGREEM ENT TO SALE BETWEEN THE PARTIES. THE ASSESSEE HAS ENTERED INTO SALE AGREEMENT FIXING CONSIDERATION FOR SALE OF PROPERTY AND SAID AGREEMENT WAS SUBSEQUENTLY EFFECTED INTO BY REGISTE RING PROPERTY IN FAVOUR OF THE BUYER AND THUS, CONSIDERA TION FIXED AS ON DATE OF AGREEMENT SHOULD BE CONSIDERED FOR THE P URPOSE OF DETERMINATION OF FULL VALUE OF CONSIDERATION. 7. THE LEARNED D.R., ON THE OTHER HAND, STRONGLY SUPPORTING ORDER OF THE LEARNED CIT(A) SUBMITTED THAT THE LEAR NED CIT(A) 16 ITA NO. 2944/CHNY/2017 HAS BROUGHT OUT CLEAR FACTS TO THE EFFECT THAT AGRE EMENT TO SELL IS WITH ONE PERSON AND SALE DEED WAS WITH ANOTHER PERS ON AND THUS, BENEFIT OF PROVISO TO SECTION 50C(1) CANNOT BE GIVEN AND HENCE, THERE IS NO ERROR IN THE REASONS GIVEN BY TH E LEARNED CIT(A) TO SUSTAIN ADDITIONS MADE BY THE ASSESSING OFFICER AND HIS ORDER SHOULD BE UPHELD. 8. WE HAVE HEARD BOTH THE PARTIES, PERUSED MATERIAL AVAILABLE ON RECORD AND GONE THROUGH ORDERS OF THE AUTHORITIES BELOW. WE HAVE ALSO CAREFULLY CONSIDERED CASE LAWS CITED BY BOTH THE SIDES. THE UNDISPUTED FACTS ARE THAT THE A SSESSEE HAS ENTERED INTO AGREEMENT TO SELL ON 09.02.2012 FOR S ALE OF AGRICULTURAL PROPERTY FOR CONSIDERATION OF RS.5,10, 00,000/- AND HAD RECEIVED AN ADVANCE OF RS.1.00 CRORE ON 09.02.2 012 BY CHEQUE. THE SAID SALE AGREEMENT WAS GIVEN EFFECT BY ENTERING INTO REGISTERED SALE DEED ON 07.05.2012 FOR CONSIDE RATION OF RS.5,10,00,000/-. AS PER SALE DEED, ENTIRE SALE CON SIDERATION OF RS.5,10,00,000/- HAS BEEN RECEIVED BY CHEQUE. THE ASSESSEE HAS COMPUTED LONG TERM CAPITAL GAIN BY ADOPTING SA LE CONSIDERATION AS SHOWN IN SALE DEED, WHEREAS THE AS SESSING OFFICER HAS ADOPTED SALE CONSIDERATION AS PER GUIDE LINE VALUE 17 ITA NO. 2944/CHNY/2017 FIXED BY STATE GOVERNMENT AUTHORITIES FOR PAYMENT O F STAMP DUTY AS ON THE DATE OF REGISTRATION OF SALE DEED. THE ASSESSEE CLAIMED THAT GUIDELINE VALUE OF PROPERTY AS ON DA TE OF AGREEMENT OF SALE WAS LESS THAN AGREED SALE CONSIDE RATION FOR SALE OF PROPERTY. THE ASSESSEE FURTHER CLAIMED THAT GUIDELINE VALUE OF PROPERTY HAS BEEN REVISED W.E.F 01.04.20 12, AS PER WHICH VALUE OF THE PROPERTY HAS BEEN ASSESSED FOR THE PURPOSE OF PAYMENT OF STAMP DUTY, WHICH IS MORE THAN AGREE D CONSIDERATION FOR SALE OF PROPERTY AND THUS, ARGUED THAT AS PER THE PROVISO TO SECTION 50C(1), WHERE DATE OF AGREEM ENT FIXING AMOUNT OF CONSIDERATION AND DATE OF REGISTRATION FO R TRANSFER OF CAPITAL ASSET ARE NOT SAME, VALUE ADOPTED OR ASSES SED OR ASSESSABLE BY THE STAMP VALUATION AUTHORITY ON THE DATE OF AGREEMENT MAY BE TAKEN FOR THE PURPOSE OF COMPUTING FULL VALUE OF CONSIDERATION FOR SUCH TRANSFER. SINCE, THE ASSE SSEE HAS FIXED CONSIDERATION FOR TRANSFER OF PROPERTY BY EN TERING INTO SALE AGREEMENT ON 09.02.2012, SUBSEQUENT GUIDELINE VALUE OF THE PROPERTY AS ON DATE OF REGISTRATION OF PROPERTY CA NNOT BE ADOPTED FOR COMPUTING FULL VALUE OF CONSIDERATION. 18 ITA NO. 2944/CHNY/2017 9. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO TH E ARGUMENTS ADVANCED BY THE LEARNED A.R FOR THE ASS ESSEE IN LIGHT OF REASONS GIVEN BY THE ASSESSING OFFICER A ND WE OURSELVES DO NOT SUBSCRIBE TO THE REASONS GIVEN BY THE ASSESSING OFFICER AS WELL AS LEARNED CIT(A) TO A DOPT GUIDELINE VALUE OF PROPERTY FIXED BY THE STATE GOVT. FOR PA YMENT OF STAMP DUTY AS ON DATE OF REGISTRATION OF SALE DEED FOR SIMPLE REASON THAT WHEN THE ASSESSEE HAS ENTERED INTO SALE AGREEMENT FIXING AMOUNT OF CONSIDERATION FOR TRANSF ER OF PROPERTY, GUIDELINE VALUE OF PROPERTY FIXED BY TH E AUTHORITIES FOR PAYMENT OF STAMP DUTY WAS LESS THAN AGREED CONSIDER ATION SHOWN IN SALE AGREEMENT. FURTHER, GUIDELINE VALUE O F PROPERTY HAS BEEN REVISED W.E.F. 01.04.2012 (SUBSEQUENT TO T HE DATE OF SALE AGREEMENT I.E.,09.02.2012), AS PER WHICH GUID ELINE VALUE OF PROPERTY HAS BEEN REVISED TO RS.7,76,70,000/-. THEREFORE, UNDER THESE FACTS, ONE HAS TO EXAMINE, WHETHER THE ASSESSING OFFICER IS RIGHT IN ADOPTING GUIDELINE VALUE FIXED BY THE AUTHORITIES FOR PAYMENT OF STAMP DUTY AS ON DATE O F REGISTRATION OF PROPERTY, AS AGAINST AGREED CONSIDERATION BETWEE N THE PARTIES. THE PROVISIONS OF SECTION 50C(1) DEALS WIT H DEEMED CONSIDERATION TO BE ADOPTED FOR COMPUTATION OF CAPI TAL GAIN 19 ITA NO. 2944/CHNY/2017 DERIVED FROM SALE OF PROPERTY, AS PER WHICH, IF CO NSIDERATION FIXED FOR SALE OF PROPERTY IS LESS THAN GUIDELINE V ALUE FIXED BY AUTHORITIES FOR PAYMENT OF STAMP DUTY, THEN GUIDELI NE VALUE AS ON DATE OF REGISTRATION OF THE PROPERTY SHALL BE A DOPTED AS FULL VALUE OF CONSIDERATION. FURTHER, A PROVISO TO SECTI ON 50C(1) HAS BEEN ENACTED BY THE FINANCE ACT, 2016 W.E.F 01.04.2 017, AS PER WHICH WHERE DATE OF AGREEMENT FIXING AMOUNT OF CONSIDERATION AND DATE OF REGISTRATION FOR TRANSFE R OF CAPITAL ASSET ARE NOT SAME, VALUE ADOPTED OR ASSESSED OR A SSESSABLE BY THE STAMP DUTY VALUATION AUTHORITIES ON DATE OF AGREEMENT MAY BE TAKEN FOR THE PURPOSE OF COMPUTING FULL VALU E OF THE CONSIDERATION FOR SUCH TRANSFER. THE PROVISO FURTHE R PROVIDED THAT THE FIRST PROVISO 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 ACCOUNT PAYEE BA NK DRAFT OR BY USE OF ELECTRONIC CLEARING SYSTEM THROUGH A B ANK ACCOUNT ON OR BEFORE THE DATE OF AGREEMENT FOR TRANSFER. TH OUGH, THE PROVISO TO SECTION 50C(1) WAS INSERTED BY THE FINAN CE ACT, 2016 W.E.F 01.04.2017, BUT VARIOUS COURTS HAVE CONS IDERED THE PROVISO AND HELD THAT PROVISO INSERTED TO SECTION 5 0C(1) BY THE FINANCE ACT, 2016 W.E.F 01.04.2017 SEEKS TO RELIEVE ASSESSEE 20 ITA NO. 2944/CHNY/2017 FROM UNDUE HARDSHIP AND THUS, SHOULD BE TAKEN TO B E EFFECTIVE FROM DATE WHEN MAIN PROVISIONS INTRODUCED. THE HON BLE MADRAS HIGH COURT IN THE CASE OF CIT VS.VUMMUDI AMA RENDRAN (2020) 429 ITR 97 (MAD) HAS CONSIDERED AN IDENTICA L ISSUE AND HELD THAT PROVISO TO SECTION 50C(1) SHOULD BE TAKE N TO BE EFFECTIVE FROM DATE WHEN PROVISON WAS INTRODUCED. T HE ITAT., AHMEDABAD BENCHES IN THE CASE OF DHARAMSHIBHAI SONA NI VS. ACIT (2016) 75 TAXMANN.COM 141 (AHD) HAD CONSIDERE D AN IDENTICAL ISSUE AND HELD THAT ONCE STATUTORY AMENDM ENT IS MADE TO REMOVE UNDUE HARDSHIP TO THE ASSESSEE AND OR T O REMOVE AN APPARENT INCONGRUITY, SUCH AN AMENDMENT HAS TO B E TREATED AS EFFECTIVE FROM THE DATE ON WHICH THE LAW CONTAIN ING SUCH UNDUE HARDSHIP WAS INTRODUCED. FROM THE ABOVE, IT I S VERY CLEAR THAT ALTHOUGH PROVISO WAS MADE APPLICABLE BY THE F INANCE ACT, 2016 W.E.F 01.04.2017, BUT VARIOUS COURTS HAVE CLEA RLY HELD THAT SAID PROVISO WAS CURATIVE IN NATURE AND THUS, APPLI CABLE RETROSPECTIVELY WITH EFFECT FROM THE DATE MAIN PROV ISION WAS INSERTED IN THE STATUTE. IF YOU GO BY SAID ANALOGY , THEN, AS PER THE PROVISO WHERE DATE OF AGREEMENT AND DATE OF RE GISTRATION FOR TRANSFER OF PROPERTY ARE NOT THE SAME, THEN VAL UE ADOPTED OR ASSESSED OR ASSESSABLE BY THE STAMP VALUATION AUTH ORITY ON 21 ITA NO. 2944/CHNY/2017 THE DATE OF AGREEMENT TO BE TAKEN FOR THE PURPOSE O F COMPUTING FULL VALUE OF CONSIDERATION, PROVIDED SUCH CONSIDER ATION OR PART THEREOF WAS PAID BY CHEQUE OR THROUGH BANKING CHANN EL. 10. IN THIS CASE, AS PER AGREEMENT BETWEEN PARTIES , THE ASSESSEE HAD ENTERED INTO SALE AGREEMENT WITH ONE MR. MOHAMED ZABEER ON 09.02.2012 AND FIXED SALE CONSIDE RATION OF RS.5,10,00,000/- AND HAD ALSO RECEIVED ADVANCE O F RS.1.00 CRORE BY CHEQUE. THE PROPERTY HAS BEEN SUBSEQUENTLY REGISTERED IN FAVOUR OF MRS. MARYAM MAHMOOD AND MR S. THAIKA SITHI ALIYA, SISTER AND MOTHER OF MR. MOHAMED ZAB EER FOR A CONSIDERATION OF RS.5,10,00,000/-. THE GUIDELINE VA LUE OF PROPERTY AS ON THE DATE OF AGREEMENT TO SELL WAS L ESS THAN AGREED CONSIDERATION OF RS.5,10,00,000/-. THEREFORE , WE ARE OF THE CONSIDERED VIEW THAT FOR THE PURPOSE OF COMPUT ATION OF LONG TERM CAPITAL GAIN AGREED CONSIDERATION SHOWN IN SAL E AGREEMENT BETWEEN PARTIES SHOULD BE CONSIDERED, IR RESPECTIVE OF FACT THAT GUIDELINE VALUE OF PROPERTY AS ON D ATE OF REGISTRATION OF PROPERTY WAS MORE THAN AGREED SALE CONSIDERATION. INSOFAR AS, ALLEGATION OF THE LEARNE D CIT(A) REGARDING AGREEMENT TO SALE AND REGISTERED SALE DEE D WITH 22 ITA NO. 2944/CHNY/2017 DIFFERENT PERSONS, WE ARE OF THE CONSIDERED VIEW TH AT IN THE PRESENT CASE AGREEMENT WAS WITH ONE MR. MOHAMED ZAB EER AND SALE DEED WAS EXECUTED IN FAVOUR OF MRS. MARYA M MAHMOOD AND MRS.THAIKA SITHI ALIYA, SISTER AND MO THER OF PURCHASER OF PROPERTY AND HENCE, IT DOES NOT IN AN Y WAY TAKE AWAY RIGHT OF THE ASSESSEE TO GET BENEFIT OF PROVIS O TO SECTION 50C(1) OF THE INCOME TAX ACT, 1961. FURTHER, INSOFA R AS OBSERVATIONS OF THE LEARNED CIT(A) WITH REGARD TO N ON- REGISTRATION OF SALE AGREEMENT, IT IS VERY CLEAR FROM THE REGISTRATION (TAMIL NADU AMENDMENT) ACT, 2012, ANY INSTRUMENTS OF AGREEMENT RELATING TO SALE OF IMMOVA BLE PROPERTY REGISTRATION WAS MADE MANDATORY FROM OCTOBER, 2012. THEREFORE, FOR NON-REGISTRATION OF SALE AGREEMENT, MORE PARTICULARLY WHEN THE ASSESSEE HAS SUBSEQUENTLY ACT ED UPON SUCH SALE AGREEMENT, BENEFIT CANNOT BE DENIED TO T HE ASSESSEE. 11. IN THIS VIEW OF THE MATTER AND CONSIDERING FACT S & CIRCUMSTANCES OF THE CASE, WE ARE OF THE CONSIDERED VIEW THAT THE ASSESSING OFFICER AS WELL AS LEARNED CIT(A) H AS ERRED IN RECOMPUTING LONG TERM CAPITAL GAIN BY ADOPTING FULL VALUE OF 23 ITA NO. 2944/CHNY/2017 CONSIDERATION BY INVOKING PROVISIONS OF SECTION 50C (1) OF THE ACT AND FURTHER, ADOPTING GUIDELINE VALUE OF PROPE RTY AS ON DATE OF REGISTRATION OF PROPERTY, EVEN THOUGH THE A SSESSEE HAS FIXED CONSIDERATION FOR TRANSFER OF PROPERTY BY ENT ERING INTO AN AGREEMENT TO SELL. HENCE, WE DIRECT THE ASSESSING OFFICER TO ADOPT SALE CONSIDERATION FOR TRANSFER OF PROPERTY A S AGREED BETWEEN THE PARTIES IN SALE AGREEMENT DATED 09.02.2 012. 12. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 27 TH OCTOBER, 2021 SD/- SD/- ( . ) ( . ) (V.DURGA RAO) ( G.MANJUNATHA ) ' % / JUDICIAL MEMBER % / ACCOUNTANT MEMBER ' /CHENNAI, ( /DATED 27 TH OCTOBER, 2021 DS *+ ,+ /COPY TO: 1. APPELLANT 2. RESPONDENT 3. - () /CIT(A) 4. - /CIT 5. + 1 /DR 6. /GF .