Dy. Commissioner of Income Tax, Range-2, Lucknow V. Ms. Zubeida Shahanshah, Lucknow

ITA 519/LKW/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 5744 (ITAT-LUCKNOW)
• Duration Of Justice: 1 year(s) 5 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2019
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 11-08-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Business income; Retrospective amendment; Fair market value; Valuation report
• Section: 43CA; 43B; 50C

Judgement Text

I.T.A. NO.519/LKW/2017 ASSESSMENT YEAR:2014-15 1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A, LUCKNOW BEFORE SHRI A. D. JAIN, VICE PRESIDENT AND SHRI T. S. KAPOOR, ACCOUNTANT MEMBER ITA NO.519/LKW/2017 ASSESSMENT YEAR:2014-15 DY.C.I.T., RANGE-2, LUCKNOW. VS. MS. ZUBEIDA SHAHANSHAH, 13, JOPLING ROAD, NANPARA HOUSE, LUCKNOW. PAN:AIAPS 1559 A (APPELLANT) (RESPONDENT) O R D E R PER T. S. KAPOOR, A.M. THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF LEARNED CIT(A)-1, LUCKNOW DATED 31/03/2017 PERTAINING TO AS SESSMENT YEAR 2014- 2015. IN THIS APPEAL THE REVENUE HAS TAKEN THE FOL LOWING GROUNDS OF APPEAL: 1. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN LAW AND FACTS WHILE HOLDING THAT TH E SALE OF THE PROPERTY WAS A DISTRESS SALE WITHOUT APPRECIATING T HE RELEVANT DOCUMENTARY FACTS THAT THE ASSESSEE SOLD THE PROPER TY ON PRINCIPAL TO PRINCIPAL BASIS UNDER BUILDER'S AGREEM ENT AFTER SETTLEMENT OF MUTUAL MISUNDERSTANDING OUT OF COURT AND THERE WAS NOT THIRD PARTY ENCROACHMENT OR LITIGATION INVO LVED, THEREFORE, THE RATIO OF HON'BLE ITAT, MUMBAI IN THE CASE OF B. APPELLANT BY SHRI C. K. SINGH, D.R. RESPONDENT BY SHRI YOGESH AGRAWAL, ADVOCATE DATE OF HEARING 25/01/2019 DATE OF PRONOUNCEMENT 31 / 01 /201 9 I.T.A. NO.519/LKW/2017 ASSESSMENT YEAR:2014-15 2 R. HERMAN & MOHANTA (I) PVT. LTD VS. DEPARTMENT OF INCOME TAX DATED 15.06.2012 WAS NOT APPLICABLE IN THE PRES ENT CASE. 2. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, T HE LD. CIT(A) ERRED IN LAW AND ON FACTS IN DELETING THE AD DITION OF RS.1,82,95,925/- BY INVOKING THE AMENDED PROVISO TO SECTION 50C(1) OF THE ACT RETROSPECTIVELY & ADOPTING THE FA IR MARKET VALUE AT RS.4,05,00,000/- AS ON THE DATE OF AGREEME NT TO SELL I.E. 11.10.2011 RELYING UPON THE JUDGMENT OF HON'BL E ITAT, AHMEDABAD BENCH IN THE CASE OF DHARMSHIBHAI SONANI VS. ACIT, SURAT WITHOUT APPRECIATING THAT THE HON'BLE I TAT, AHMEDABAD IN THE ABOVE CASE REMANDED THE MATTER BAC K TO THE FILE OF THE A.O. AND AFTER EXAMINATION ADOPT THE ST AMP DUTY VALUATION AS ON THE DATE OF AGREEMENT AND MOREOVER, THE RETROSPECTIVE APPLICATION OF AMENDED PROVISO TO SEC TION 50C(1) IS DEBATABLE UNDER VARIOUS COURTS OF LAW. 3. UNDER THE FACTS & CIRCUMSTANCES OF THE CASE, THE CIT(A) ERRED IN LAW & FACTS IN EXCLUDING THE VALUE OF LAND AREA OF 844.24 SQ.MTR. FOR STAMP DUTY VALUATION OF RS.46,43 ,320/- AS PER SECTION 50C OF THE ACT IN AS MUCH AS THE ASSESS EE RECEIVED AN ADVANCE OF RS.10,00,000/- TOWARDS THE SAME EARLI ER AS PER BUILDER'S AGREEMENT DATED 10.10.2005. 4. UNDER THE FACTS & CIRCUMSTANCES OF THE CASE, THE CIT(A) FAILED TO APPRECIATE THAT EVER OTHERWISE, PROVISO T O SECTION 50C(1) WAS APPLICABLE ON DATE OF AGREEMENT TO SELL I.E. 11.10.2011 BY ADOPTING STAMP DUTY VALUATION AS ON T HE DATE OF AGREEMENT & NOT THE FAIR MARKET VALUE AS THERE WAS NO DISTRESS SALE OF PROPERTY. 5. UNDER FACTS & CIRCUMSTANCES OF THE CASE, THE CIT (A) HAS ALLOWED ENTIRE RELIEF TO THE ASSESSEE WITHOUT PROPE R APPRECIATION OF FACTS & LAW. 2. AT THE OUTSET, LEARNED D. R. SUBMITTED THAT ASSE SSEE HAD SOLD PROPERTY AND ASSESSING OFFICER APPLIED THE PROVISIO NS OF SECTION 50C OF THE ACT AND WHICH LEARNED CIT(A) HAS DELETED HOLDING TH E SALE MADE BY THE ASSESSEE AS A DISTRESS SALE AND LEARNED CIT(A) HAS WRONGLY RELIED ON THE RATIO OF DECISION OF HON'BLE BOMBAY TRIBUNAL IN THE CASE OF B. R. HERMAN & I.T.A. NO.519/LKW/2017 ASSESSMENT YEAR:2014-15 3 MOHANTA (I) PVT. LTD. ORDER DATED 15.06.2012. LEAR NED D. R. FURTHER SUBMITTED THAT LEARNED CIT(A) HAS WRONGLY ADOPTED T HE FAIR MARKET VALUE AS ON THE DATE OF AGREEMENT INSTEAD OF TAKING THE VALU E AS PER COLLECTORS RATE FOR CALCULATION. LEARNED D. R. FURTHER ARGUED THAT ASSESSEE HAD RECEIVED AN ADVANCE OF RS.10,00,000/- TOWARDS THE SAME PROPERTY WHICH HAS NOT BEEN INCLUDED IN THE SALE PROCEEDS AND THEREFORE, THE AS SESSING OFFICER HAD RIGHTLY MADE THE ADDITION OF RS.46,43,320/- BEING T HE DEEMED VALUE OF SUCH RS.10,00,000/- U/S SECTION 50C OF THE ACT. LEARNED D. R. FURTHER ARGUED THAT LEARNED CIT(A) SHOULD HAVE TAKEN STAMP DUTY VA LUE AS ON THE DATE OF AGREEMENT AND NOT THE AGREED VALUE AS THERE WAS NO DISTRESS SALE OF PROPERTY AND THE STAMP DUTY VALUATION OF THE PROPER TY WAS RS.4,18,52,923/- AS PER APPROVED VALUERS REPORT, COPY OF WHICH IS P LACED AT PAGES 140 TO 148 OF THE PAPER BOOK. 3. LEARNED A. R., EXPLAINING THE FACTS OF THE CASE, SUBMITTED THAT ASSESSEE HAD DECLARED A CAPITAL GAIN TO THE TUNE OF RS.2,33,75,744/- WHICH AROSE ON ACCOUNT OF SALE OF PROPERTY SITUATED AT 13 , JOPLING ROAD, LUCKNOW FOR A SALE CONSIDERATION OF RS.4,05,00,000/-. LEAR NED A. R. SUBMITTED THAT ASSESSEE HAD ORIGINALLY ENTERED INTO A BUILDER AGRE EMENT ON 10/10/2005 WHEREBY THE ASSESSEE AGREED TO TRANSFER A PART OF I TS PROPERTY TO M/S MISTHI CONSTRUCTION PVT. LTD. FOR CONSTRUCTION OF FLATS AN D THE ASSESSEE WAS TO GET 35% SHARE OUT OF THE SAID PROCEEDS OF FLATS. LEARN ED A. R. SUBMITTED THAT DISPUTE AROSE BETWEEN THE PARTIES ON ACCOUNT OF WHI CH, AFTER VARIOUS LITIGATIONS, THE ASSESSEE ENTERED INTO A MEMORANDUM OF UNDERSTANDING ON 10/10/2011 WHEREBY THE CONSIDERATION FOR THE PROPER TY WAS FIXED AT RS.4,05,00,000/- AND IN THIS RESPECT OUR ATTENTION WAS INVITED TO COPY OF MEMORANDUM OF UNDERSTANDING PLACED AT PAGES 68 TO 7 3 OF THE PAPER BOOK. LEARNED A. R. SUBMITTED THAT THIS MEMORANDUM OF UND ERSTANDING ITSELF I.T.A. NO.519/LKW/2017 ASSESSMENT YEAR:2014-15 4 NOTES THE FACT OF HAVING ENTERED INTO A BUILDERS A GREEMENT ON 10/10/2005 AND ALSO NOTES THAT DUE TO DISPUTES THIS NEW MEMORA NDUM OF AGREEMENT HAS BEEN ENTERED AND THEREFORE, IT CANNOT BE SAID T HAT THE SALE THROUGH THIS MOU WAS NOT MADE AS A DISTRESS SALE. LEARNED A. R. SUBMITTED THAT THIS MEMORANDUM OF UNDERSTANDING NOTES THAT THERE WERE V ARIOUS LITIGATIONS BETWEEN THE PARTIES AND TO ARRIVE AT AN AMICABLE SE TTLEMENT, THE AGREEMENT WAS ENTERED INTO AND WAS PRESENTED TO HON'BLE HIGH COURT AND THEREFORE, IT IS WRONG ON THE PART OF THE REVENUE TO ARGUE THAT T HE SALE WAS NOT A DISTRESS SALE. LEARNED A. R. FURTHER ARGUED THAT E VEN IF THE PROVISIONS OF SECTION 50C ARE APPLIED, THE CIRCLE RATE PREVALENT AT THE TIME OF ENTERING THE AGREEMENT HAS TO BE TAKEN INTO ACCOUNT AS THE PROVI SIONS OF SECTION 50C ITSELF HAS BEEN AMENDED AND ITS APPLICATION HAS BEE N HELD TO BE RETROSPECTIVELY APPLICABLE BY HON'BLE AHMEDABAD TRI BUNAL IN THE CASE OF DHARAMSHIBHAI SONANI VS. ACIT, SURAT [2016] 75 TAXM ANN.COM 141 (I.T.A.T. AHMEDABAD). LEARNED A. R. INVITED OUR ATT ENTION TO A COPY OF VALUATION REPORT OF APPROVED VALUER DATED 11/10/201 1, PLACED AT PAGES 142 TO 148 OF THE PAPER BOOK, WHERE THE VALUER HAS VALU ED THE PROPERTY AS PER CIRCLE RATE AT RS.4,18,52,923/-. LEARNED A. R. SUB MITTED THAT IN THE WORST CASE SCENARIO, THE DEEMED VALUATION U/S 50C CAN BE TAKEN AT RS.4,18,52,923/- INSTEAD OF RS.4,05,00,000/-. AS R EGARDS THE ADVANCE OF RS.10,00,000/- WHICH THE REVENUE CLAIMS TO HAVE BEE N RECEIVED BY THE ASSESSEE, LEARNED A. R. SUBMITTED THAT NO DOUBT THE AMOUNT OF RS.10,00,000/- HAS BEEN REFERRED TO IN BUILDERS AG REEMENT DATED 10/10/2005 BUT THIS AGREEMENT ITSELF BECAME DISPUTE D AND ASSESSEE ENTERED INTO A FRESH MEMORANDUM OF UNDERSTANDING WHEREIN TH E ENTIRE SALE CONSIDERATION WAS REFIXED AND THE MODE OF PAYMENTS HAVE ALSO BEEN REFIXED WHEREIN THERE IS NO MENTION OF RS.10,00,000/- ALLEG ED TO HAVE BEEN RECEIVED BY THE ASSESSEE VIDE BUILDERS AGREEMENT D ATED 10/10/2005. I.T.A. NO.519/LKW/2017 ASSESSMENT YEAR:2014-15 5 THEREFORE, IT WAS ARGUED THAT THIS RECEIPT OF RS.10 ,00,000/- REMAINED AS SECURITY AND THAT HAS TO BE REFUNDED BACK. IN THIS RESPECT OUR ATTENTION WAS INVITED TO CLAUSE 43 OF BUILDERS AGREEMENT WHEREIN IT WAS AGREED THAT IN CASE OF DISPUTE, THE ADVANCE OF RS.10,00,000/- WAS TO BE REFUNDED. LEARNED A. R. FURTHER INVITED OUR ATTENTION TO AN O PINION OF SR. ADVOCATE SHRI JAIDEV NARAIN MATHUR, COPY PLACED AT PAGES 136 TO 1 39 OF THE PAPER BOOK, WHEREIN THE SR. ADVOCATE, AFTER GOING THROUGH THE E NTIRE FACTS, HAS CONCLUDED THAT THIS AMOUNT IS A LIABILITY OF THE AS SESSEE WHICH NEEDS TO BE REPAID TO THE BUILDER. THEREFORE, IT WAS ARGUED TH AT LEARNED CIT(A) HAS RIGHTLY DELETED THE ADDITION. 4. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE T HROUGH THE MATERIAL PLACED ON RECORD. THE FIRST GROUND OF APPEAL TAKEN BY THE REVENUE IS THAT LEARNED CIT(A) HAS WRONGLY CONSIDERED THE SALE OF P ROPERTY AS A DISTRESS SALE. IN THIS RESPECT, WE FIND THAT ORIGINALLY A B UILDER AGREEMENT WAS EXECUTED AND REGISTERED ON 10/10/2005, A COPY OF WH ICH IS PLACED AT PAGES 28 TO 67 OF THE PAPER BOOK. VIDE THIS BUILDERS AG REEMENT, A PART OF PROPERTY OF THE ASSESSEE, MEASURING 884.24 SQ. METE R, WAS TO BE TRANSFERRED TO ASSESSEE FOR A CONSIDERATION OF RS.1 0,00,000/-, STAMP VALUE OF WHICH WAS RS.46,43,320/-. THIS FACT IS APPARENT FROM CLAUSE 47 OF THE AGREEMENT, WHICH FOR THE PURPOSE OF COMPLETENESS IS REPRODUCED BELOW: 47. THAT THE SUBJECT MATTER OF THIS AGREEMENT IS 8 44.24 SQ. METER OF LAND THE VALUATION OF THE SAME @RS.5,000/- PER SQ. METER COMES TO RS.42,21,200/-, THE LAND IS SITUATED AT MORE THAN 9 METER WIDE ROAD HENCE 10% EXTRA VALUE COMES TO RS.4,22,120/-. THUS, THE TOTAL VALUE OF THE LAND C OMES TO RS.46,43,320/- CONSEQUENTLY THE STAMP DUTY OF RS.4, 64,400/- HAS BEEN PAID. I.T.A. NO.519/LKW/2017 ASSESSMENT YEAR:2014-15 6 AS PER THIS AGREEMENT THE BUILDER WAS TO CONSTRUCT FLATS ON THE PROPERTY AND THE PROCEEDS WERE TO BE SHARED BETWEEN THE BUILDER AND THE ASSESSEE TO THE EXTENT OF 65% AND 35% RESPECTIVELY. THE SAID A GREEMENT COULD NOT BE EXECUTED AS THERE AROSE CERTAIN DISPUTES AND THE MA TTER BECAME SUBJECT OF LITIGATION, AS IS APPARENT FROM COPY OF WRIT PETITI ON FILED BY THE BUILDER, PLACED AT PAGES 100 TO 110 OF THE PAPER BOOK. IN V IEW OF THE LITIGATIONS THE ASSESSEE ENTERED INTO A FRESH MEMORANDUM OF UNDERST ANDING VIDE AGREEMENT TO SELL DATED 11/10/2011, PLACED AT PAGES 68 TO 73 OF THE PAPER BOOK. IN THIS MEMORANDUM OF UNDERSTANDING, THE FAC T OF ORIGINAL AGREEMENT DATED 10/10/2005 AND VARIOUS LEGAL PROCEEDINGS AGAI NST THE AGREEMENT HAS BEEN NOTED AND FURTHER THIS AGREEMENT STATES THAT T O END THE LITIGATION THE CONSIDERATION HAS BEEN FIXED AT RS.4,05,00,000/- AN D THE MANNER OF MAKING PAYMENTS HAS ALSO BEEN NOTED IN THIS AGREEMENT. TH IS MEMORANDUM OF UNDERSTANDING IS FOR SALE OF 2591.12 SQ. METER OF L AND WHICH IS APPARENT FROM CLAUSE-I OF THE FRESH MEMORANDUM OF UNDERSTAND ING, THE CONTENTS OF WHICH ARE REPRODUCED BELOW: 1. THAT THE FIRST PARTY SHALL TRANSFER ABSOLUTE OW NERSHIP IN THE LAND MEASURING 2591.12 SQ. MTR. OF THE PLOT ON WHICH THE SECOND PARTY HAS TO CONSTRUCT MULTISTORIED RESIDENT IAL APARTMENTS I.E. PART OF PROPERTY NO.25/22, SITUATED AT 13, LAJPAT RAI MARG ALSO KNOWN AS 13, JOPLING ROAD, LUC KNOW. IT IS CLARIFIED THAT THE AGREEMENT BETWEEN THE PARTIES IS ONLY IN RELATION TO 2591.12 SQ/ MTR.S AND DOES NOT INCLUDE THE REMAINDER OF THE PLOT NO. 25/22, 13 LAJPAT RAI MARG , LUCKNOW WHICH CURRENTLY HOUSES THE RESIDENCE OF THE FIRST P ARTY. A COPY OF THE MAP OF THE SAID PROPERTY IS ANNEXED AS SCHED ULE-A WITH THIS MEMORANDUM OF UNDERSTANDING AND THE PORTION BO UNDED IN RED IS THE PROPERTY IN QUESTION. ON COMPARISON OF THE CONTENTS OF THESE TWO AGREEMEN TS, WE FIND THAT ORIGINALLY THE ASSESSEE HAD ENTERED INTO AN AGREEME NT FOR A SMALL PIECE OF LAND MEASURING 884.24 SQ. MTR. AND LATER ON THE ARE A WAS INCREASED TO I.T.A. NO.519/LKW/2017 ASSESSMENT YEAR:2014-15 7 2591.12 SQ. MTRS. THEREFORE, IT CAN NOT BE SAID TH AT THE ASSESSEE HAD MADE THE SALE AS A DISTRESS SALE AS THE LAND AREA IN NEW AGREEMENT IS MUCH MORE THAN AREA IN ORIGINAL AGREEMENT AND THERE IS NO DIS PUTE ABOUT THE INCREASED AREA AS THE DISPUTE REMAINED LIMITED TO ORIGINAL AR EA OF 884 SQ. MTRS. THEREFORE, THE ARGUMENT OF LEARNED A. R., THAT THE SALE OF ENTIRE PROPERTY WAS A DISTRESS SALE, DO NOT HOLD FORCE. THEREFORE, GROUND NO. 1 OF THE APPEAL IS ALLOWED. 4.1 AS REGARDS GROUND NO. 2, THE REVENUE HAS TAKEN THE GROUND THAT LEARNED CIT(A) HAS WRONGLY INVOKED THE AMENDED PROV ISO TO SECTION 50C(1) RETROSPECTIVELY AND HAS WRONGLY TAKEN THE FAIR MARK ET VALUE AS ON AGREEMENT TO SELL I.E. ON 11/10/2011. IT HAS BEEN ARGUED THAT THE SECTION CAN NOT BE SAID TO BE AMENDED RETROSPECTIVELY AND A SSESSING OFFICER HAD RIGHTLY TAKEN THE STAMP DUTY VALUATION AS ON THE DA TE OF SALE DEED. IN THIS RESPECT WE FIND THAT SECTION 50C(1) HAS BEEN AMENDE D BY FINANCE ACT 2016 WITH EFFECT FROM 01/04/2017 WHEREBY IT HAS BEEN HEL D THAT WHERE THE DATE OF THE AGREEMENT FIXING THE AMOUNT OF CONSIDERATION AND THE DATE OF REGISTRATION FOR THE TRANSFER OF THE CAPITAL ASSET ARE NOT THE SAME, THE VALUE ADOPTED OR ASSESSED OR ASSESSABLE BY THE STAMP VALU ATION AUTHORITY ON THE DATE OF AGREEMENT MAY BE TAKEN FOR THE PURPOSES OF COMPUTING FULL VALUE OF CONSIDERATION FOR SUCH TRANSFER PROVIDED THE AMOUNT OF CONSIDERATION, OR A PART OF CONSIDERATION, WAS PAID BY AN ACCOUNT PAYEE CHEQUE OR BY USE OF ELECTRONIC CLEARING SYSTEM, ON OR BEFORE THE DATE O F THE AGREEMENT FOR TRANSFER. IN THE PRESENT CASE, WE FIND THAT MEMORA NDUM OF UNDERSTANDING WAS ENTERED ON 10/10/2011, A COPY OF WHICH IS PLACE D AT PAGES 68 TO 73 OF THE PAPER BOOK. THE SALE CONSIDERATION HAS BEEN FI XED AT RS.4,05,00,000/- OUT OF WHICH RS.15,00,000/- WAS PAID VIDE CHEQUE NO . 177078 ON THE DATE OF AGREEMENT ITSELF WHICH FINDS MENTION IN THE COPY OF AGREEMENT ITSELF. I.T.A. NO.519/LKW/2017 ASSESSMENT YEAR:2014-15 8 THE SAID ADVANCE ALSO FINDS MENTION IN THE SALE DEE D REGISTERED ON 16/09/2013, PLACED AT PAGES 7 TO 19 OF THE PAPER BO OK WHERE IN THE SCHEDULE OF PAYMENTS, PLACED AT PAGE 17, THE SAME C HEQUE DATED 11/10/2011 FOR RS.15,00,000/- FINDS MENTION. THERE FORE, IN THE PRESENT CASE THE VALUE OF CIRCLE RATE, PREVAILING AT THE TI ME OF ENTERING THE AGREEMENT I.E. 11.10.29011, WAS TO BE CONSIDERED, A S THE APPLICABILITY OF THIS SECTION HAS BEEN HELD TO BE APPLICABLE RETROSP ECTIVELY BY THE JUDGMENT OF AHMEDABAD BENCH OF THE TRIBUNAL IN THE CASE OF D HARMSHIBHAI SONANI (SUPRA), WHERE THE HON'BLE TRIBUNAL HAS HELD THAT T HE AMENDMENT IN SECTION 50C(1) HAS TO BE APPLIED RETROSPECTIVELY AND THE CI RCLE RATE PREVAILING AT THE TIME OF ENTERING AGREEMENT HAS TO BE APPLIED. THE RELEVANT FINDINGS OF HON'BLE TRIBUNAL ARE REPRODUCED BELOW: 6.1 RATIONALISATION OF SECTION 50C TO PROVIDE RELIEF WHERE SALE CONSIDERATION FIXED UNDER AGREEMENT TO SEL L SECTION 50C MAKES A SPECIAL PROVISION FOR DETERMINI NG THE FULL VALUE OF CONSIDERATION IN CASES OF TRANSFER OF IMMOVABLE PROPERTY. IT PROVIDES THAT WHERE THE CONSIDERATION DECLARED TO B E RECEIVED OR ACCRUING AS A RESULT OF THE TRANSFER OF LAND OR BUI LDING OR BOTH, IS LESS THAN THE VALUE ADOPTED OR ASSESSED OR ASSESSABLE BY ANY AUTHORITY OF A STATE GOVERNMENT (I.E. STAMP VALUATION AUTHORITY ) FOR THE PURPOSE OF PAYMENT OF STAMP DUTY IN RESPECT OF SUCH TRANSFER, THE VALUE SO ADOPTED OR ASSESSED OR ASSESSABLE SHALL BE DEEMED TO BE THE FULL VALUE OF THE CONSIDERATION, AND CAPITAL GA INS SHALL BE COMPUTED ON THE BASIS OF SUCH CONSIDERATION UNDER S ECTION 48 OF THE INCOME-TAX ACT. THE SCOPE OF SECTION 50C WAS EXTENDED W.E.F. A.Y. 2 010-11 TO THE TRANSACTION WHICH WERE EXECUTED THROUGH AGREEMENT T O SELL OR POWER OF ATTORNEY BY INSERTING THE WORD ASSESSABLE ALON G WITH WORDS THE VALUE SO ADOPTED OR ASSESSED. HENCE, SECTION 50C I S NOW ALSO APPLICABLE IN CASE OF SUCH TRANSFERS. THE PRESENT PROVISIONS OF SECTION 50C DO NOT PROVID E ANY RELIEF WHERE THE SELLER HAS ENTERED INTO AN AGREEMENT TO SELL TH E ASSET MUCH BEFORE THE ACTUAL DATE OF TRANSFER OF THE IMMOVABLE PROPERTY AND THE SALE CONSIDERATION HAS BEEN FIXED IN SUCH AGREEMENT . A LATER SIMILAR I.T.A. NO.519/LKW/2017 ASSESSMENT YEAR:2014-15 9 PROVISION INSERTED BY WAY OF SECTION 43CA DOES TAKE CARE OF SUCH A SITUATION. 6.2 IT IS THEREFORE PROPOSED TO INSERT THE FOLLOWIN G PROVISIONS IN SECTION 50C: (4) WHERE THE DATE OF AN AGREEMENT FIXING THE VALUE OF CONSIDERATION FOR THE TRANSFER OF THE ASSET AND THE DATE OF REGISTRATION OF THE TRANSFER OF THE ASSET ARE NOT S AME, THE VALUE REFERRED TO IN SUB- SECTION (1) MAY BE TAKEN AS THE VALUE ASSESSABLE BY ANY AUTHORITY OF A STATE GOVERNMENT F OR THE PURPOSE OF PAYMENT OF STAMP DUTY IN RESPECT OF SUCH TRANSFER ON THE DATE OF THE AGREEMENT. (5) THE PROVISIONS OF SUB-SECTION (4) SHALL APPLY O NLY IN A CASE WHERE THE AMOUNT OF CONSIDERATION OR A PART THEREOF HAS BEEN RECEIVED BY ANY MODE OTHER THAN CASH ON OR BEFORE A DATE OF AGREEMENT FOR TRANSFER OF THE ASSET. 5. TRUE TO THE WORK ETHOS OF THE CURRENT GOVERNMEN T, IT WAS THE FIRST TIME THAT WITHIN FOUR MONTHS OF THE TAX SIMPL IFICATION COMMITTEE BEING NOTIFIED, NOT ONLY THE FIRST REPORT OF THE CO MMITTEE WAS SUBMITTED, BUT THE GOVERNMENT ALSO WALKED THE TALK BY ENSURING THAT THE SEVERAL STATUTORY AMENDMENTS, BASED ON RECOMMEN DATIONS OF THIS REPORT, WERE INTRODUCED IN THE PARLIAMENT. SO FAR AS SECTION 50 C IS CONCERNED, THE FINANCE ACT 2016, WITH EFFECT FRO M 1ST APRIL 2017, INSERTED THE FOLLOWING PROVISOS TO SECTION 50C: 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 VALU ATION AUTHORITY ON THE DATE OF AGREEMENT MAY BE TAKEN FOR THE PURPOSES OF COMPUTING FULL VALUE OF CONSIDERATION F OR SUCH TRANSFER: PROVIDED FURTHER THAT THE FIRST PROVISO SHALL APPLY ONLY IN A CASE WHERE THE AMOUNT OF CONSIDERATION, OR A PART THEREO F, HAS BEEN RECEIVED BY WAY OF AN ACCOUNT PAYEE CHEQUE OR ACCOUNT PAYEE BANK DRAFT OR BY USE OF ELECTRONIC CLEARING S YSTEM THROUGH A BANK ACCOUNT, ON OR BEFORE THE DATE OF TH E AGREEMENT FOR TRANSFER. I.T.A. NO.519/LKW/2017 ASSESSMENT YEAR:2014-15 10 6. THIS AMENDMENT WAS EXPLAINED, IN THE MEMORANDUM EXPLAINING THE PROVISIONS OF FINANCE BILL 2016 (HTT P:/ /INDIABUDGET .NIC. IN/ UB2016-17/MEMO/MEM1.PDF), AS FOLLOWS: RATIONALIZATION OF SECTION 50C IN CASE SALE CONSIDE RATION IS FIXED UNDER AGREEMENT EXECUTED PRIOR TO THE DATE OF REGISTRATION OF IMMOVABLE PROPERTY UNDER THE EXISTI NG PROVISIONS CONTAINED IN SECTION 50C, IN CASE OF TRA NSFER OF A CAPITAL ASSET BEING LAND OR BUILDING ON BOTH, THE V ALUE ADOPTED OR ASSESSED BY THE STAMP VALUATION AUTHORITY FOR TH E PURPOSE OF PAYMENT OF STAMP DUTY SHALL BE TAKEN AS THE FULL VALUE OF CONSIDERATION FOR THE PURPOSES OF COMPUTATION OF CA PITAL GAINS. THE INCOME TAX SIMPLIFICATION COMMITTEE (EASWAR COMMITTEE) HAS IN ITS FIRST REPORT, POINTED OUT THA T THIS PROVISION DOES NOT PROVIDE ANY RELIEF WHERE THE SEL LER HAS ENTERED INTO AN AGREEMENT TO SELL THE PROPERTY MUCH BEFORE THE ACTUAL DATE OF TRANSFER OF THE IMMOVABLE PROPER TY AND THE SALE CONSIDERATION IS FIXED IN SUCH AGREEMENT, WHER EAS SIMILAR PROVISION EXISTS IN SECTION 43CA OF THE ACT I.E. WH EN AN IMMOVABLE PROPERTY IS SOLD AS A STOCK-IN TRADE. IT I S PROPOSED TO AMEND THE PROVISIONS OF SECTION 50C SO AS TO PRO VIDE THAT WHERE THE DATE OF THE AGREEMENT FIXING THE AMOUNT O F CONSIDERATION FOR THE TRANSFER OF IMMOVABLE PROPERT Y AND THE DATE OF REGISTRATION ARE NOT THE SAME, THE STAMP DU TY VALUE ON THE DATE OF THE AGREEMENT MAY BE TAKEN FOR THE PURP OSES OF COMPUTING THE FULL VALUE OF CONSIDERATION. IT IS FUR THER PROPOSED TO PROVIDE THAT THIS PROVISION SHALL APPLY ONLY IN A CASE WHERE THE AMOUNT OF CONSIDERATION REFERRED TO THEREIN, OR A PART THEREOF, HAS BEEN PAID BY WAY OF AN ACCOUNT PAYEE CHEQUE OR ACCOUNT PAYEE BANK DRAFT OR USE OF ELECTR ONIC CLEARING SYSTEM THROUGH A BANK ACCOUNT, ON OR BEFOR E THE DATE OF THE AGREEMENT FOR THE TRANSFER OF SUCH IMMOVABLE PROPERTY. 30 THESE AMENDMENTS ARE PROPOSED TO BE MADE EFFECTI VE FROM THE 1ST DAY OF APRIL, 2017 AND SHALL ACCORDING LY APPLY IN RELATION TO ASSESSMENT YEAR 2017-18 AND SUBSEQUENT YEARS. 7. WHILE THE GOVERNMENT HAS THUS RECOGNIZED THE GEN UINE AND INTENDED HARDSHIP IN THE CASES IN WHICH THE DATE OF AGREEMENT TO SELL IS PRIOR TO THE DATE OF SALE, AND INTRODUCED WELCOM E AMENDMENTS TO THE STATUE TO TAKE THE REMEDIAL MEASURES, THIS BRIN GS NO RELIEF TO THE ASSESSEE BEFORE ME AS THE AMENDMENT IS INTRODUCED O NLY WITH PROSPECTIVE EFFECT FROM 1ST APRIL 2017. THERE CANNO T BE ANY DISPUTE THAT THIS AMENDMENT IN THE SCHEME OF SECTION 50C HA S BEEN MADE TO REMOVE AN INCONGRUITY, RESULTING IN UNDUE HARDSHIP TO THE ASSESSEE, AS IS EVIDENT FROM THE OBSERVATION IN EASWAR COMMIT TEE REPORT TO THE I.T.A. NO.519/LKW/2017 ASSESSMENT YEAR:2014-15 11 EFFECT THAT THE (THEN PREVAILING) PROVISIONS OF SE CTION 50C DO NOT PROVIDE ANY RELIEF WHERE THE SELLER HAS ENTERED INT O AN AGREEMENT TO SELL THE ASSET MUCH BEFORE THE ACTUAL DATE OF TRANS FER OF THE IMMOVABLE PROPERTY AND THE SALE CONSIDERATION HAS B EEN FIXED IN SUCH AGREEMENT RECOGNIZING THE INCONGRUITY THAT TH E DATE AGREEMENT OF SELL HAS BEEN IGNORED IN THE STATUTE E VEN THOUGH IT WAS CRUCIAL AS IT WAS AT THIS POINT OF TIME THAT THE SA LE CONSIDERATION IS FINALIZED. THE INCONGRUITY IN THE STATUTE WAS GLARI NG AND UNDUE HARDSHIP NOT IN DISPUTE. ONCE IT IS NOT IN DISPUTE THAT A STATUTORY AMENDMENT IS BEING MADE TO REMOVE AN UNDUE HARDSHIP TO THE ASSESSEE OR TO REMOVE AN APPARENT INCONGRUITY, SUCH AN AMENDMENT HAS TO BE TREATED AS EFFECTIVE FROM THE DATE ON WHI CH THE LAW, CONTAINING SUCH AN UNDUE HARDSHIP OR INCONGRUITY, W AS INTRODUCED. IN SUPPORT OF THIS PROPOSITION, I FIND SUPPORT FROM HON BLE DELHI HIGH COURTS JUDGMENT IN THE CASE OF CIT VS ANSAL LANDMA RK TOWNSHIP PVT LTD [(2015) 377 ITR 635 (DEL)], WHEREIN APPROVING T HE REASONING ADOPTED AN ORDER AUTHORED BY ME DURING MY TENURE AT AGRA BENCH [I..E RAJEEV KUMAR AGARWAL VS ACIT (2014) 149 ITD 3 63 (AGRA)] WHICH CENTRED ON THE PRINCIPLE THAT WHEN LEGISLATUR E IS REASONABLE AND COMPASSIONATE ENOUGH TO UNDO THE UNDUE HARDSHIP CAUSED BY THE STATUTE SUCH AN AMENDMENT IN LAW, IN VIEW OF T HE WELL SETTLED LEGAL POSITION TO THE EFFECT THAT A CURATIVE AMENDM ENT TO AVOID UNINTENDED CONSEQUENCES IS TO BE TREATED AS RETROSP ECTIVE IN NATURE EVEN THOUGH IT MAY NOT STATE SO SPECIFICALLY. IN TH IS CASE, IT WAS SPECIFICALLY OBSERVED, AND IT WAS THIS OBSERVATION WHICH WAS REPRODUCED WITH APPROVAL BY THEIR LORDSHIPS, AS FOL LOWS: NOW THAT THE LEGISLATURE HAS BEEN COMPASSIONATE EN OUGH TO CURE THESE SHORTCOMINGS OF PROVISION, AND THUS OBVI ATE 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 M AY NOT STATE SO SPECIFICALLY, THE INSERTION OF SECOND PROV ISO MUST BE GIVEN RETROSPECTIVE EFFECT FROM THE POINT OF TIME W HEN THE RELATED LEGAL PROVISION WAS INTRODUCED. IN VIEW OF THESE DISCUSSIONS, AS ALSO FOR THE DETAILED REASONS SET O UT EARLIER, WE CANNOT SUBSCRIBE TO THE VIEW THAT IT COULD HAVE BEE N AN 'INTENDED CONSEQUENCE' TO PUNISH THE ASSESSEES FOR NON- DEDUCTION OF TAX AT SOURCE BY DECLINING THE DEDUCTI ON IN RESPECT OF RELATED PAYMENTS, EVEN WHEN THE CORRESPO NDING INCOME IS DULY BROUGHT TO TAX. THAT WILL BE GOING M UCH BEYOND THE OBVIOUS INTENTION OF THE SECTION. ACCORDINGLY, WE HOLD THAT THE INSERTION OF SECOND PROVISO TO SECTION 40(A)(IA ) IS DECLARATORY AND CURATIVE IN NATURE AND IT HAS RETRO SPECTIVE I.T.A. NO.519/LKW/2017 ASSESSMENT YEAR:2014-15 12 EFFECT FROM 1ST APRIL, 2005, BEING THE DATE FROM WH ICH SUB CLAUSE (IA) OF SECTION 40(A) WAS INSERTED BY THE FI NANCE (NO. 2) ACT, 2004 [8] 8. THEIR LORDSHIPS WERE PLEASED TO HOLD THAT THIS R EASONING AND RATIONALE OF THIS DECISION MERITS ACCEPTANCE. THE SAME PRINCIPLE, WHEN APPLIED IN THE PRESENT CONTEXT, LEADS TO THE C ONCLUSION THAT THE PRESENT AMENDMENT, BEING AN AMENDMENT TO REMOVE AN APPARENT INCONGRUITY WHICH RESULTED IN UNDUE HARDSHIPS TO TH E TAXPAYERS, SHOULD BE TREATED AS RETROSPECTIVE IN EFFECT. QUITE CLEARLY THEREFORE, EVEN WHEN THE STATUTE DOES NOT SPECIFICALLY STATE S O, SUCH AMENDMENTS, IN THE LIGHT OF THE DETAILED DISCUSSION S ABOVE, CAN ONLY BE TREATED AS RETROSPECTIVE AND EFFECTIVE FROM THE DATE RELATED STATUTORY PROVISIONS WAS INTRODUCED. VIEWED THUS, T HE PROVISO TO SECTION 50 C SHOULD ALSO BE TREATED AS CURATIVE IN NATURE AND WITH RETROSPECTIVE EFFECT FROM 1ST APRIL 2003, I.E. THE DATE EFFECTIVE FROM WHICH SECTION 50C WAS INTRODUCED. WHILE THE GOVERNM ENT MUST BE COMPLIMENTED FOR THE UNPARALLELED SWIFTNESS WITH WH ICH THE EASWAR COMMITTEE RECOMMENDATIONS, AS ACCEPTED BY THE GOVER NMENT, WERE IMPLEMENTED, I, AS A JUDICIAL OFFICER, WOULD THINK T HIS WAS STILL ONE STEP SHORT OF WHAT OUGHT TO HAVE BEEN DONE INASMUCH AS THE AMENDMENT, IN TUNE WITH THE JUDGE MADE LAW, OUGHT T O HAVE BEEN EFFECTIVE FROM THE DATE ON WHICH THE RELATED LEGAL PROVISIONS WERE INTRODUCED. AS I SAY SO, IN ADDITION TO THE REASONIN G GIVEN EARLIER IN THIS ORDER, I MAY ALSO REFER TO THE OBSERVATIONS OF HONBLE SUPREME COURT, THE CASE OF CIT VS ALOM EXTRUSION LTD [(2009 ) 319 ITR 306 SC)], TO THE FOLLOWING EFFECT: ONCE 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 W.E.F. 1ST APRIL, 2004, WOULD BECOME CURATIVE IN NATURE, HENCE, IT WOULD APPLY RETROSPECTIVELY W.E.F. 1ST APRIL, 1988 (I.E. THE DA TE ON WHICH THE RELATED LEGAL PROVISION WAS INTRODUCED). SECOND LY, IT MAY BE NOTED THAT, IN THE CASE OF ALLIED MOTORS (P) LTD . ETC. VS. CIT (1997) 139 CTR (SC) 364: (1997) 224 ITR 677 (SC), T HE SCHEME OF S. 43B OF THE ACT CAME TO BE EXAMINED. IN THAT CASE, THE QUESTION WHICH AROSE FOR DETERMINATION WA S, WHETHER SALES-TAX COLLECTED BY THE ASSESSEE AND PAI D AFTER THE END OF THE RELEVANT PREVIOUS YEAR BUT WITHIN THE TI ME ALLOWED UNDER THE RELEVANT SALES-TAX LAW SHOULD BE DISALLOW ED UNDER S. 43B OF THE ACT WHILE COMPUTING THE BUSINESS INCOME OF THE PREVIOUS YEAR? THAT WAS A CASE WHICH RELATED TO ASS T. YR. 1984-85. THE RELEVANT ACCOUNTING PERIOD ENDED ON 30 TH JUNE, I.T.A. NO.519/LKW/2017 ASSESSMENT YEAR:2014-15 13 1983. THE ITO DISALLOWED THE DEDUCTION CLAIMED BY T HE ASSESSEE WHICH WAS ON ACCOUNT OF SALES-TAX COLLECTE D BY THE ASSESSEE FOR THE LAST QUARTER OF THE RELEVANT ACCOU NTING YEAR. THE DEDUCTION WAS DISALLOWED UNDER S. 43B WHICH, AS STATED ABOVE, WAS INSERTED W.E.F. 1ST APRIL, 1984. IT IS AL SO RELEVANT TO NOTE THAT THE FIRST PROVISO WHICH CAME INTO FORC E W.E.F. 1ST APRIL, 1988 WAS NOT ON THE STATUTE BOOK WHEN THE ASSESSMENTS WERE MADE IN THE CASE OF ALLIED MOTORS (P) LTD. ETC. (SUPRA). HOWEVER, THE ASSESSEE CONTENDED THAT EVEN THOUGH THE FIRST PROVISO CAME TO BE INSERTED W.E.F. 1ST APRIL, 1988, IT WAS ENTITLED TO THE BENEFIT OF THAT PROVIS O BECAUSE IT OPERATED RETROSPECTIVELY FROM 1ST APRIL, 1984, WHEN S. 43B STOOD INSERTED. THIS IS HOW THE QUESTION OF RETROSP ECTIVITY AROSE IN ALLIED MOTORS (P) LTD. ETC. (SUPRA). THIS COURT, IN ALLIED MOTORS (P) LTD. ETC. (SUPRA) HELD THAT WHEN A PROVISO IS INSERTED TO REMEDY UNINTENDED CONSEQUENCES AND TO M AKE THE SECTION WORKABLE, A PROVISO WHICH SUPPLIES AN OBVIO US OMISSION IN THE SECTION AND WHICH PROVISO IS REQUIR ED TO BE READ INTO THE SECTION TO GIVE THE SECTION A REASONA BLE INTERPRETATION, IT COULD BE READ RETROSPECTIVE IN O PERATION, PARTICULARLY TO GIVE EFFECT TO THE SECTION AS A WHO LE. ACCORDINGLY, THIS COURT, IN ALLIED MOTORS (P) LTD. ETC. (SUPRA), HELD THAT THE FIRST PROVISO WAS CURATIVE IN NATURE, HENCE, RETROSPECTIVE IN OPERATION W.E.F. 1ST APRIL, 1988. IT IS IMPORTANT TO NOTE ONCE AGAIN THAT, BY FINANCE ACT, 2003, NOT ONLY THE SECOND PROVISO IS DELETED BUT EVEN THE FIRST PROVIS O IS SOUGHT TO BE AMENDED BY BRINGING ABOUT AN UNIFORMITY IN TA X, DUTY, CESS AND FEE ON THE ONE HAND VIS-A-VIS CONTRIBUTION S TO WELFARE FUNDS OF EMPLOYEE(S) ON THE OTHER. THIS IS ONE MORE REASON WHY WE HOLD THAT THE FINANCE ACT, 2003, IS RETROSPECTIVE IN OPERATION. MOREOVER, THE JUDGMENT IN ALLIED MOTORS (P) LTD. ETC. (SUPRA) IS DELIVERED BY A BENC H OF THREE LEARNED JUDGES, WHICH IS BINDING ON US. ACCORDINGLY , WE HOLD THAT FINANCE ACT, 2003, WILL OPERATE RETROSPECTIVEL Y W.E.F. 1ST APRIL, 1988 (WHEN THE FIRST PROVISO STOOD INSERTED) . LASTLY, WE MAY POINT OUT THE HARDSHIP AND THE INVIDIOUS DISCRI MINATION WHICH WOULD BE CAUSED TO THE ASSESSEE(S) IF THE CON TENTION OF THE DEPARTMENT IS TO BE ACCEPTED THAT FINANCE ACT, 2003, TO THE ABOVE EXTENT, OPERATED PROSPECTIVELY. TAKE AN E XAMPLE IN THE PRESENT CASE, THE RESPONDENTS HAVE DEPOSITED THE CONTRIBUTIONS WITH THE R.P.F.C. AFTER 31ST MARCH (E ND OF ACCOUNTING YEAR) BUT BEFORE FILING OF THE RETURNS U NDER THE IT ACT AND THE DATE OF PAYMENT FALLS AFTER THE DUE DAT E UNDER THE EMPLOYEES' PROVIDENT FUND ACT, THEY WILL BE DENIED DEDUCTION FOR ALL TIMES. IN VIEW OF THE SECOND PROVISO, WHICH STOOD ON I.T.A. NO.519/LKW/2017 ASSESSMENT YEAR:2014-15 14 THE STATUTE BOOK AT THE RELEVANT TIME, EACH OF SUCH ASSESSEE(S) WOULD NOT BE ENTITLED TO DEDUCTION UNDE R S. 43B OF THE ACT FOR ALL TIMES. THEY WOULD LOSE THE BENEFIT OF DEDUCTION EVEN IN THE YEAR OF ACCOUNT IN WHICH THEY PAY THE CONTRIBUTIONS TO THE WELFARE FUNDS, WHEREAS A DEFAU LTER, WHO FAILS TO PAY THE CONTRIBUTION TO THE WELFARE FUND R IGHT UPTO 1ST APRIL, 2004, AND WHO PAYS THE CONTRIBUTION AFTER 1S T APRIL, 2004, WOULD GET THE BENEFIT OF DEDUCTION UNDER S. 4 3B OF THE ACT. IN OUR VIEW, THEREFORE, FINANCE ACT, 2003, TO T HE EXTENT INDICATED ABOVE, SHOULD BE READ AS RETROSPECTIVE. IT WOULD, THEREFORE, OPERATE FROM 1ST APRIL, 1988, WHEN THE F IRST PROVISO WAS INTRODUCED. IT IS TRUE THAT THE PARLIAMENT HAS E XPLICITLY STATED THAT FINANCE ACT, 2003, WILL OPERATE W.E.F. 1ST APRIL, 2004. HOWEVER, THE MATTER BEFORE US INVOLVES THE PR INCIPLE OF CONSTRUCTION TO BE PLACED ON THE PROVISIONS OF FINA NCE ACT, 2003. 4.2 IN VIEW OF THE ABOVE FACTS AND JUDICIAL PRECEDE NTS, WE HOLD THAT THE AMENDMENT TO SECTION 50C BY THE FINANCE ACT 2016 HA S TO BE APPLIED RETROSPECTIVELY AS THE AMENDMENT IS CURATIVE IN NAT URE THEREFORE, COLLECTORS RATE PREVALENT AT THE TIME OF ENTERING AGREEMENT HA S TO BE TAKEN AS DEEMED CONSIDERATION. THEREFORE, GROUND NO. 2 IS DISMISSE D. 4.3 NOW COMING TO GROUND NO. 3. WE FIND THAT IN TH E ORIGINAL AGREEMENT DATED 10/10/2005, THERE IS MENTION OF RS.10,00,000/ - WHICH WAS PAID TO THE ASSESSEE BUT THIS AGREEMENT WAS NOT EXECUTED AND BE CAME A MATTER OF DISPUTE AND A FRESH MEMORANDUM OF UNDERSTANDING WAS ENTERED INTO BY THE ASSESSEE WHEREBY THE ENTIRE SALE CONSIDERATION WAS REFIXED AND THERE IS NO MENTION OF THIS AMOUNT OF RS.10,00,000/-. AS PER T HE LEGAL OPINION OF SR. ADVOCATE, PLACED AT PAGES 136 TO 139 OF THE PAPER B OOK, THE SAID AMOUNT OF RS.10,00,000/- IS A LIABILITY OF THE ASSESSEE AND W HICH NEEDS TO BE REPAID TO THE BUILDER. THE SR. ADVOCATE HAS EXAMINED ALL THE DOCUMENTS AND HAS BASED HIS CONCLUSION IN PARA 9, WHICH, FOR THE SAKE OF CONVENIENCE IS REPRODUCED BELOW: I.T.A. NO.519/LKW/2017 ASSESSMENT YEAR:2014-15 15 9. IN MY CONSIDERED OPINION THE QUERIST IS BOUND T O RETURN TO THE BUILDER THE SUM OF RS. 10 LACS WHICH IS STAT ED TO HAVE BEEN PAID TO THE QUERIST BY THE BUILDER AS ADVANCE AS PER CLAUSE 23 OF THE BUILDERS AGREEMENT DATED 10.10.200 5. THE SAID REPAYMENT MAY BE MADE IN INSTALLMENTS AS MAY B E AGREED BY THE PARTIES BUT SINCE IT IS THE ADMITTED CASE OF THE PARTIES THAT THE SAID AMOUNT HAS NEITHER BEEN ADJUSTED BY T HE BUILDER NOR FORFEITED BY THE QUERIST, THE SAME NEEDS TO BE REPAID BY THE QUERIST TO THE BUILDER. 4.4 WE FURTHER FIND THAT CLAUSE 43 OF THE BUILDERS AGREEMENT CLEARLY STATES THAT THE AMOUNT OF RS.10,00,000/- IS REFUNDA BLE AS IS APPARENT FROM CONTENTS OF CLAUSE 43, WHICH IS REPRODUCED BELOW: 43. THAT IF THE SECOND PARTY OPTS OUT OF THIS AGRE EMENT DUE TO DEFECT IN THE TITLE OF THE OWNER, THEY SHALL BE ENTITLED TO THE REFUND OF ADVANCE DEPOSIT OF RS.10,00,000/- WHICH W ILL BE PAYABLE WITHOUT ANY INTEREST OR LIABILITY WITHIN A PERIOD OF 90 DAYS. 4.5 IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES, T HE ACTION OF THE ASSESSING OFFICER IN MAKING ADDITION OF RS.46,43,32 0/-, BEING DEEMED VALUE OF RS.10,00,000/- IS NOT CORRECT AND LEARNED CIT(A) HAS RIGHTLY DELETED THE SAME HOLDING THE SAME TO BE LIABILITY OF THE ASSESS EE. 5. NOW COMING TO GROUND NO. 4. WE FIND THAT THE AG REEMENT TO SELL WAS ENTERED ON 11/10/2011. THE STAMP DUTY VALUATION AS ON THIS DATE WAS RS.4,18,52,923/-, AS PER THE APPROVED VALUE REPORT, PLACED AT PAGES 142 TO 148 OF THE PAPER BOOK. THE LEARNED CIT(A) HAS TAKE N RS.4,05,00,000/- AS THE VALUE OF SALE CONSIDERATION. HOWEVER, SINCE WE HAVE HELD THAT ASSESSEE HAS SOLD PROPERTY ON PRINCIPAL TO PRINCIPAL BASIS A ND NOT AS A DISTRESS SALE AFTER ENTERING MEMORANDUM OF UNDERSTANDING FOR A MU CH MORE AREA THEREFORE, THIS AMOUNT, WHICH IS THE DEEMED VALUE E XISTING AT THE TIME OF ENTERING AGREEMENT, WAS TO BE TAKEN INTO CONSIDERAT ION AS PER THE I.T.A. NO.519/LKW/2017 ASSESSMENT YEAR:2014-15 16 PROVISIONS OF SECTION 50C. THEREFORE, THE ASSESSING OFFICER IS DIRECTED TO TAKE THE CONSIDERATION OF RS.4,18,52,923/- INSTEAD OF RS.4,05,00,000/- AND IS ACCORDINGLY DIRECTED TO RECOMPUTE THE CAPITAL GA INS. IN VIEW OF THE ABOVE, GROUND NO. 4 IS ALLOWED 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS PART LY ALLOWED. (ORDER PRONOUNCED IN THE OPEN COURT ON 31/01/2019) SD/. SD/. ( A. D. JAIN ) ( T. S. KAPOOR ) VICE PRESIDENT ACCOUNTANT MEMBER DATED:31/01/2019 *SINGH COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. D.R., I.T.A.T., LUCKNOW ASSISTANT REGISTRAR