STALWART IMPEX PRIVATE LIMITED , MUMBAI V. INCOME TAX OFFICER, 15 (3) (4) , MUMBAI

ITA 5752/MUM/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 9510 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-07-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2016-2017
• Appeal Filed On: 06-09-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SMITA VERMA
• Assessee Lawyers: BHADRESH JOSHI
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Fair market value; Valuation report; Set aside; Capital Gains
• Section: 154; 43CA; 50C; 43; 20

Judgement Text

, , ! IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER . 5752 / / 2019 (%. 2016-17 ) ITA NO.5752/MUM/2019 (A.Y 2016-17 ) STALWART IMPEX PVT. LTD., USHA KIRAN RESIDENCY, KHARWAI NAKA, KHARWAI, BADLAPUR EAST, THANE 421 503 PAN: AAICS-4110-J ...... ' / APPELLANT % VS. INCOME TAX OFFICER 15(3)(4), ROOM NO.15, GROUND FLOOR, AAYKAR BHAVAN, M.K.ROAD, MUMBAI 400 020 ..... ()/ RESPONDENT '*/ APPELLANT BY : SHRI BHADRESH JOSHI ()*/ RESPONDENT BY : MS. SMITA VERMA %+) / DATE OF HEARING : 07/04/2021 ,-. +) / DATE OF PRONOUNCEMENT : 02/07/2021 / ORDER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER COMMISSIONER OF INCOME TAX (APPEALS)-24 MUMBAI [IN SHORT 'THE CI T(A)] DATED 03/06/2019 FOR THE ASSESSMENT YEAR 2016-17. 2. SHRI BHADRESH JOSHI APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE IS ENGAGED IN CONSTRUCTION OF COMMER CIAL AND RESIDENTIAL HOUSING PROJECTS. DURING THE PERIOD RELEVANT TO ASSESSMENT YEAR UNDER APPEAL, THE ASSESSEE HAD SOLD FLATS TO DIFFERENT BUYERS. IN RES PECT OF THREE FLATS THE 2 ITA NO .5752/MUM/2019 (A.Y 2016-17) ASSESSING OFFICER HELD THAT THE MARKET VALUE (STAMP VALUE) OF THE FLATS SOLD IS MORE THAN THE AGREEMENT VALUE. THE TOTAL AGREEMENT VALUE OF THE SAID THREE FLATS SOLD WAS RS.97,11,500/-. THE ASSESSING OFFICE R DETERMINED THE STAMP DUTY VALUE OF THE FLATS AT RS.1,09,83,000/-. ON THE OBJECTION RAISED BY THE ASSESSEE, THE ASSESSING OFFICER MADE REFERENCE TO T HE DEPARTMENT VALUATION OFFICER (DVO) FOR DETERMINING THE MARKET VALUE OF T HE FLATS. HOWEVER, BEFORE RECEIPT OF THE REPORT FROM DVO, THE ASSESSING OFFIC ER MADE ADDITION OF THE DIFFERENCE BETWEEN THE STAMP DUTY VALUE AND THE AGR EEMENT VALUE I.E. RS.12,71,500/- UNDER SECTION 43CA OF THE INCOME TAX ACT,1961 (IN SHORT 'THE ACT'). AGGRIEVED BY THE ASSESSMENT ORDER DATED 12/ 12/2018, THE ASSESSEE FILED APPEAL BEFORE THE CIT(A). THE CIT(A) WITHOUT APPRE CIATING THE FACTS UPHELD THE ADDITION MADE BY THE ASSESSING OFFICER U/S 43CA OF THE ACT. THE LD. AUTHORIZED REPRESENTATIVE OF THE ASSESSEE POINTED THAT IN THE IMPUGNED ORDER, THE CIT(A) HAS MADE ERROR IN MENTIONING THE AMOUNTS IN PARA 5 .1.4. OF THE ORDER. THE CIT(A) IN THE IMPUGNED ORDER ERRONEOUSLY MENTIONED THE VALUE OF UNITS SOLD IN AY 2015-16. IN ASSESSMENT YEAR 2015-16 SIMILAR ADDI TION WAS MADE. ON ACCOUNT OF SMALLNESS OF THE AMOUNT INVOLVED, THE AS SESSEE ACCEPTED THE ADDITION AND DID NOT FILE ANY APPEAL. THE LD.AUTHOR IZED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT THE DVO IN HIS REPORT HAS D ETERMINED THE VALUE OF THE THREE FLATS AT RS.1,03,93,000/-. THE DIFFERENCE BE TWEEN AGREEMENT VALUE AND VALUE DETERMINED BY THE DVO IS 7% APPROXIMATELY. SI NCE, THE DIFFERENCE IS LESS THAN 10% NO ADDITION SHOULD BE MADE. TO SUPPORT HIS CONTENTIONS, THE LD. AUTHORIZED REPRESENTATIVE OF THE ASSESSEE PLACED R ELIANCE ON THE DECISION OF TRIBUNAL IN THE CASE OF RADHIKA SALES CORPORATION V S. ADDL.CIT, IN ITA NO.1474/PUN/2016 FOR ASSESSMENT YEAR 2011-12 DECIDE D ON 16/11/2018. 3 ITA NO .5752/MUM/2019 (A.Y 2016-17) 3. ON THE OTHER HAND, MS. SMITA VERMA REPRESENTING THE DEPARTMENT VEHEMENTLY DEFENDED THE IMPUGNED ORDER. THE LD. DEP ARTMENTAL REPRESENTATIVE SUBMITTED THAT REFERENCE WAS MADE TO THE DVO, THEREFORE, NO LEVERAGE OF PERCENTAGE DIFFERENCE SHOULD BE ALLOWED TO THE ASSESSEE. THE LD. DR CONTENDED THAT THE BENEFIT OF DIFFERENCE IN VALU E DISCLOSED AND STAMP VALUE CAN BE GIVEN TO THE ASSESSEE IN ACCORDANCE WI TH PROVISO TO SUB-SECTION (1) TO SECTION 43CA INSERTED BY THE FINANCE ACT, 20 18, W.E.F. 01/4/2019. THE BENEFIT OF NEWLY INSERTED PROVISO WILL NOT BE AVAIL ABLE TO THE ASSESSEE IN THE IMPUGNED ASSESSMENT YEAR. THE ASSESSING OFFICER HAS ALREADY GRANTED DUE RELIEF TO THE ASSESSEE U/S 154 OF THE ACT AFTER REC EIPT OF DVOS REPORT. NOW, THE ADDITION U/S43CA OF THE ACT STANDS AT RS.6,81,500/- . 4. BOTH SIDES HEARD, ORDERS OF AUTHORITIES BELOW EX AMINED. THE SOLITARY ISSUE ASSAILED BY THE ASSESSEE IS ADDITION MADE U/S 43CA OF THE ACT IN RESPECT OF DIFFERENCE BETWEEN AGREEMENT VALUE OF THE FLATS AND MARKET VALUE DETERMINED BY THE DVO. THE VALUE OF FLATS AS PER AS SESSEE, STAMP DUTY VALUE AND VALUE AS DETERMINED BY THE DVO ARE TABULATED HE REIN UNDER: SR. NO. FLAT NO. AGREEMENT VALUE (IN RS.) STAMP DUTY VALUE (IN RS.) FAIR MARKET VALUE AS DETERMINED BY DVO (IN RS.) DIFFERENCE (IN RS.) 1. E - 1/404 30,92,250 34,04,000 32,27,000 1,34,750 2. D - 2/702 32,24,750 40,40,000 37,36,000 5,11,250 3. F - 1/502 33,94,500 35,39,000 34,30,000 35,500 TOTAL 97,11,500 1,09,83,000 1,03,93,000 6,81,500 THE DIFFERENCE BETWEEN AGREEMENT VALUE AND VALUE DE TERMINED BY DVO IS RS.6,81,500/-. IN TERMS OF PERCENTAGE THE DIFFERENC E IS 7% APPROXIMATELY. THE SHORT CONTENTION OF THE ASSESSEE IS THAT WHERE THE DIFFERENCE BETWEEN THE 4 ITA NO .5752/MUM/2019 (A.Y 2016-17) AGREEMENT VALUE AND THE MARKET VALUE IS LESS THAN 1 0% NO ADDITION SHOULD BE MADE. 5. SIMILAR ISSUE HAD COME UP BEFORE THE TRIBUNAL IN THE CASE OF RADHIKA SALES CORPORATION (SUPRA). THE TRIBUNAL DELETED THE ADDITION BY OBSERVING AS UNDER: 5. WE HAVE HEARD THE SUBMISSIONS MADE BY REPRESENT ATIVES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF AUTHORITIES BELOW. THE SOLITA RY ISSUE RAISED IN THE APPEAL BY THE ASSESSEE IS AGAINST THE ADDITION OF RS.10,38,000/- ON ACCOUNT OF DIFFERENCE IN LONG TERM CAPITAL GAIN DECLARED BY THE ASSESSEE AND COMP UTED BY THE ASSESSING OFFICER AFTER CONSIDERING THE DVOS VALUATION REPORT. IT IS AN UNDISPUTED FACT THAT THE ASSESSEE HAS DISCLOSED SALE CONSIDERATION OF THE LA ND AS RS.1,10,00,000/-. DURING THE SCRUTINY ASSESSMENT PROCEEDINGS REFERENCE WAS MADE TO DVO FOR THE VALUATION OF PROPERTY. THE DVO VIDE REPORT DATED 30-12-2013 DETE RMINED THE FAIR MARKET VALUE OF THE PROPERTY AS RS.1,20,38,000/-. THE DIFFERENCE BE TWEEN ACTUAL SALE CONSIDERATION DECLARED BY THE ASSESSEE AND THE FAIR MARKET VALUE DETERMINED BY THE DVO IS APPROXIMATELY 9.43%. WE FIND THAT THE CO-ORDINATE B ENCH OF THE TRIBUNAL IN THE CASE OF DATTATRAYA KERBA LONKAR VS. DEPUTY COMMISSIONER OF INCOME TAX (SUPRA) AFTER CONSIDERING VARIOUS DECISIONS INCLUDING THE DECISIO N RENDERED IN THE CASE OF RAHUL CONSTRUCTIONS VS. DEPUTY COMMISSIONER OF INCOME TAX (SUPRA) AND THE JUDGMENT OF HONBLE PATNA HIGH COURT IN THE CASE OF BIMLA SINGH VS. COMMISSIONER OF INCOME TAX (SUPRA) HAS HELD AS UNDER: 8. WE FIND MERIT IN THE SUBMISSION OF LD. A.R. THE DIFFERENCE BETWEEN THE FAIR MARKET VALUE DETERMINED BY THE DVO AND ACTUAL SALE CONSIDERATION IS RS.7,14,530/- I.E SLIGHTLY MORE THAN 2 PER CENT OF THE SALE CONSI DERATION. THE CO-ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF RAHUL CONSTRUCTION V/S. DCIT (SUPRA) HAS HELD THAT WHERE DIFFERENCE BETWEEN THE SALE CONSIDERATION DECLARED BY THE ASSESSEE AND FAIR MARKET VALUE AS DETERMINED BY THE DVO U/S 50C IS LESS THAN 10 PERCENT, THE ASSESSING OFFICER WAS NOT JUSTIFIED IN SUBSTITUTING THE VALUE DETERMI NED FOR SALE CONSIDERATION DISCLOSED BY THE ASSESSEE. THE CO-ORDINATE BENCH AFTER CONSID ERING THE PROVISIONS OF SECTION 50C OF THE ACT AND THE PROVISION OF SECTION 23A AND 24(5) OF THE WEALTH TAX ACT HELD AS UNDER :- 13. A COMBINED READING OF THE ABOVE PROVISIONS SHO WS THAT THE VALUATION ADOPTED BY THE DVO IS SUBJECT TO APPEAL AND THE SAM E IS NOT FINAL. IN THE INSTANT CASE WE FIND THAT AS AAGAINST THE VALUE OF RS. 28,73,000/- ADOPTED BY THE STAMP VALUATION AUTHORITIES, THE DVO HAS DETERM INED THE FMV ON THE DATE OF TRANSFER AT RS. 20,55,000/- . THIS ITSELF S HOWS THAT THERE IS WIDE VARIATION BETWEEN THE TWO VALUES. FURTHER, THE VALU E ADOPTED BY THE DVO IS ALSO BASED ON SOME ESTIMATE. WE FIND THAT THE DIFFE RENCE BETWEEN SALE CONSIDERATION SHOWN BY THE ASSESSEE AT RS.19,00,000 /- AND THE FMV DETERMINED BY THE DVO AT RS.20,55,000/- IS ONLY RS. 1,55,000 WHICH IS LESS THAN 10 PER CENT. THE COURTS AND TRIBUNALS ARE CONS ISTENTLY TAKING A LIBERAL APPROACH IN FAVOUR OF THE ASSESSEE WHERE THE DIFFER ENCE BETWEEN THE VALUE 5 ITA NO .5752/MUM/2019 (A.Y 2016-17) ADOPTED BY THE ASSESSEE AND THE VALUE ADOPTED BY TH E DVO IS LESS THAN 10 PER CENT. 14. WE FIND THAT THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF ASSTT. CIT V/S. HARPREET HOTELS (P) LTD. VIDE ITA NOS. 1156-1160/PN /2000 AND RELIED ON BY THE LEARNED COUNSEL FOR THE ASSESSEE HAD DISMISSED THE APPEAL FILED BY THE REVENUE WHERE THE CIT(A) HAD DELETED THE UNEXPLAINE D INVESTMENT IN HOUSE CONSTRUCTION ON THE GROUND THAT THE DIFFERENCE BETW EEN THE FIGURE SHOWN BY THE ASSESSEE AND THE FIGURE OF THE DVO IS HARDLY 10 PERCENT. 15. SIMILARLY, WE FIND THAT THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF ITO V/S. KAADDU JAYGHOSH APPASAHEB, VIDE ITA NO.441/PN/ 2004 FOR THE ASST. YR 1992-1993 AND RELIED ON BY THE LEARNED COUNSEL FOR THE ASSESSEE FOLLOWING THE DECISION OF THE J&K HIGH COURT IN THE CASE OF H ONEST GROUP OF HOTELS (P) LTD. V/S CIT (2002) 177 CTR (J&K) 232 HAD HELD THAT WHEN THE MARGIN BETWEEN THE VALUE AS GIVEN BY THE ASSESSEE AND THE DEPARTMENTAL VALUER WAS LESS THAN 10 PER CENT , THE DIFFERENT IS LIABLE TO BE IGNORED AND THE ADDITION MADE BY THE A.O CANNOT BE SUSTAINED. 16. SINCE IN THE INSTANT CASE SUCH DIFFERENCE IS LE SS THAN 10 PER CENT AND CONSIDERING THE FACT THAT VALUATION IS ALWAYS A MAT TER OF ESTIMATION WHERE SOME DEGREE OF DIFFERENCE BOUND TO OCCUR, WE ARE OF THE CONSIDERED OPINION THAT THE A.O. IN THE INSTANT CASE IS NOT JUSTIFIED IN SUBSTITUTING THE SALE CONSIDERATION AT RS.20,55,000 AS AGAINST THE ACTUAL SALE CONSIDERATION OF RS.19,00,000/- DISCLOSED BY THE ASSESSEE. WE, THERE FORE, SET ASIDE THE ORDER OF THE CIT(A) AND DIRECT THE A.O. TO TAKE RS.19,00, 000/- ONLY AS THE SALE CONSIDERATION OF THE PROPERTY. THE GROUNDS RAISED B Y THE ASSESSEE ARE ACCORDINGLY ALLOWED. 9. THE LD. A.R OF THE ASSESSEE HAS FURTHER PLACED R ELIANCE ON THE DECISION OF HONBLE PATNA HIGH COURT IN THE CASE OF BIMLA SINGH V/S. CI T (SUPRA) WHEREIN HONBLE HIGH COURT HAS HELD THAT DIFFERENCE BETWEEN THE COST OF CONSTRUCTION SHOWN BY THE ASSESSEE AND AS DETERMINED BY THE ASSESSING OFFICER BEING LESS THAN 15 PER CENT, THE SAME IS TO BE IGNORED FOR THE PURPOSES OF ADDITION. THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT V/S. SADNA GUPTA 352 ITA 595 HELD T HAT UNLESS AND UNTIL THERE WAS SOME OTHER EVIDENCE TO INDICATE THAT EXTRA CONSIDER ATION HAD FLOWED IN TRANSACTION FOR PURCHASE OF PROPERTY, REPORT OF DVO COULD NOT F ORM BASIS OF ANY ADDITION ON PART OF REVENUE. IN ABSENCE OF ANY EVIDENCE NO RELIANCE COULD BE PLACED ON THE REPORT OF DVO FOR MAKING ADDITION. 10. THUS, IN VIEW OF THE FACT THAT THE DIFFERENCE BETWEEN SALE CONSIDERATION AND THE MARKET VALUE DETERMINED BY THE DVO IS NOT SUBSTANTI AL AND IS APPROXIMATELY LITTLE OVER 2 PER CENT OF THE ACTUAL SALE CONSIDERATION, W E FIND NO REASON FOR REJECTING ACTUAL SALE CONSIDERATION MENTIONED IN THE SALE DEE D FOR DETERMINING LONG TERM CAPITAL GAIN. ACCORDINGLY, THE GROUND NO.1 RAISED I N APPEAL BY THE ASSESSEE IS ALLOWED. THE ASSESSING OFFICER IS DIRECTED TO ADOPT ACTUAL SALE CONSIDERATION AS MENTIONED IN THE SALE DEED AS A FAIR MARKET VALUE F OR DETERMINING THE LONG TERM CAPITAL GAIN. 6. IN THE LIGHT OF THE FACTS OF THE CASE AND THE DE CISIONS DISCUSSED ABOVE, WE FIND MERIT IN THE SUBMISSIONS OF ASSESSEE. IN THE PRESENT CASE , SINCE DIFFERENCE BETWEEN THE VALUE DECLARED BY THE ASSESSEE AND THE VALUE DETERM INED BY THE DVO IS LESS THAN 6 ITA NO .5752/MUM/2019 (A.Y 2016-17) 10%, NO ADDITION IN RESPECT OF LONG TERM CAPITAL GA INS IS WARRANTED. THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) ON THIS ISSUE ARE ACCORDINGLY, SET ASIDE AND THE APPEAL OF ASSESSEE IS ALLOWED. IT WOULD BE RELEVANT TO MENTION HERE THAT THE AFORE MENTIONED DECISION WAS RENDERED WITH REFERENCE TO PROVISIONS OF SECTION 50 C OF THE ACT. THE ADDITION IN THE INSTANT CASE IS MADE U/S 43CA OF THE ACT. I FIND THAT THE PROVISIONS OF BOTH THE SECTIONS ARE PARI MATERIA, EXCEPT THAT THE PROVISIONS OF SECTION 43CA OPERATE IN RESPECT OF CONSIDERATION RECEIVED ON TRA NSFER OF AN ASSET (OTHER THAN CAPITAL ASSET) BEING LAND OR BUILDING OR BOTH AND P ROVISIONS OF SECTION 50C ARE ATTRACTED ON TRANSFER OF CAPITAL ASSEST BEING LAND OR BUILDING OR BOTH. HENCE, THE DECISION RENDERED U/S.50C OF THE ACT GIVING LEV ERAGE OF MINOR VARIATION, IN THE VALUE DECLARED BY THE ASSESSEE AND THE STAMP DU TY VALUE WOULD EQUALLY HOLD GOOD FOR VARIATION IN THE VALUE U/S 43CA OF TH E ACT. THUS, FROM THE ABOVE DECISION IT CAN BE SAFELY DEDUCED THAT WHERE THE DI FFERENCE BETWEEN SALE CONSIDERATION DECLARED BY THE ASSESSEE AND STAMP DU TY VALUE OF AN ASSET (OTHER THAN CAPITAL ASSET) BEING LAND OR BUILDING OR BOTH IS LESS THAN 10%, NO ADDITION UNDER SECTION 43CA OF THE ACT IS WARRANTED. 6. HERE, IT WOULD BE RELEVANT TO MENTION THAT THE F INANCE ACT 2018 HAS INSERTED A PROVISO TO SUB-SECTION (1) OF SECTION 43 CA PROVIDING 5% TOLERANCE LIMIT IN VARIATION BETWEEN DECLARED SALE CONSIDERAT ION VIS-A-VIS STAMP DUTY VALUE FOR MAKING NO ADDITION. SIMILAR PROVISO WAS I NSERTED BY THE FINANCE ACT 2018 TO SUB-SECTION (1) TO SECTION 50C OF THE ACT. THE SAID TOLERANCE LIMIT BAND WAS ENHANCED FROM 5% TO 10% BY THE FINANCE ACT 2020 W.E.F. 01/4/2021. THE TRIBUNAL IN THE CASE OF MARIA FERNANDES CHERYL VS. ITO (INTERNATIONAL TAXATION) REPORTED AS 123 TAXMANN.COM 252 (MUMBAI) AFTER CONS IDERING VARIOUS DECISION AND THE CBDT CIRCULAR NO. 8 OF 2018 DATED 26-12-201 8 HELD, THAT THE AMENDMENT IS RETROSPECTIVE IN NATURE AND RELATES BA CK TO THE DATE OF INSERTION 7 ITA NO .5752/MUM/2019 (A.Y 2016-17) OF STATUTORY SECTION TO THE ACT. THE RELEVANT EXTRA CT OF THE OBSERVATIONS MADE BY THE BENCH READS AS UNDER: 7. 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 IMMOVA BLE PROPERTY. IN OTHER WORDS, AS LONG AS THE VARIATIONS ARE WITHIN THE PERMISSIBLE L IMITS, THE ANTI-AVOIDANCE PROVISIONS OF SECTION 50C DO NOT COME INTO PLAY. AS WE HAVE NO TED EARLIER, THE CBDT ITSELF ACCEPTS THAT THERE COULD BE VARIOUS BONAFIDE REASON S EXPLAINING THE SMALL VARIATIONS BETWEEN THE SALE CONSIDERATION OF IMMOVABLE PROPERT Y AS DISCLOSED BY THE ASSESSEE VIS--VIS THE STAMP DUTY VALUATION FOR THE SAID IMMOVABLE PROPERTY. OBVIOUSLY, THEREFORE, DISTURBING THE ACTUAL SALE CO NSIDERATION, FOR THE PURPOSE OF COMPUTING CAPITAL GAINS, AND ADOPTING A NOTIONAL FI GURE, FOR THAT PURPOSE, WILL NOT BE JUSTIFIED IN SUCH CASES. ON A CONCEPTUAL NOTE, AN E STIMATION OF MARKET PRICE IS AN ESTIMATION NEVERTHELESS, EVEN IF BY A STATUTORY AUT HORITY 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. T HE RIGOUR OF SECTION 50C(1) WAS THUS RELAXED, AND VERY THOUGHTFULLY SO, TO TAKE THE SE BONAFIDE CASES OF SMALL VARIATIONS BETWEEN THE STATED SALE CONSIDERATION VI S--VIS STAMP DUTY VALUATION, OUT OF THE SCOPE OF ADJUSTMENTS CONTEMPLATED IN THE COM PUTATION OF CAPITAL GAINS UNDER THIS ANTI-AVOIDANCE PROVISION. IN OUR HUMBLE UNDERSTANDING, IT IS A CASE OF A CURA TIVE AMENDMENT TO TAKE CARE OF UNINTENDED CONSEQUENCES O F THE SCHEME OF SECTION 50C. IT MAKES PERFECT SENSE, AND TRULY REFLECTS A VERY P RAGMATIC APPROACH FULL OF COMPASSION AND FAIRNESS, THAT JUST BECAUSE THERE IS A SMALL VARIATION BETWEEN THE STATED SALE CONSIDERATION OF A PROPERTY AND STAMP D UTY VALUATION OF THE SAME PROPERTY, ONE CANNOT PROCEED TO DRAW AN INFERENCE A GAINST THE ASSESSEE, AND SUBJECT THE ASSESSEE TO PRACTICALLY PROVE HIS BEING TRUTHFUL IN STATING THE SALE CONSIDERATION. CLEARLY, THEREFORE, THIS INSERTION O F THE THIRD PROVISO TO SECTION 50C(1) IS IN THE NATURE OF A REMEDIAL MEASURE TO AD DRESS 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 T HE FINANCE ACT 2020, IS CONCERNED, AS 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 T O 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 T HESE VALUES. AS A RESPONSIVE GOVERNMENT, WHICH IS TRULY THE HALLMARK OF THE PRES ENT GOVERNMENT, EVEN THOUGH THE INITIAL TOLERANCE BAND LEVEL WAS TAKEN AT 5%, IN RE SPONSE 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 PARTIC ULAR 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 DUT Y 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--VIS THE MATERIAL FACTS IN 2003. WHAT HOLDS GOOD IN 2021 WAS ALSO GOOD IN 8 ITA NO .5752/MUM/2019 (A.Y 2016-17) 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 REAS ONS 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 VAR IATIONS BETWEEN THE STATED SALE CONSIDERATION VIS--VIS STAMP DUTY VALUATION T O 10%, ARE CURATIVE IN NATURE, AND, THEREFORE, THESE PROVISIONS, EVEN THOUGH STATE D TO BE PROSPECTIVE, MUST BE HELD TO RELATE BACK TO THE DATE WHEN THE RELATED ST ATUTORY PROVISION OF SECTION 50C, I.E. 1ST APRIL 2003. IN PLAIN WORDS, WHAT IS MEANS IS THAT EVEN IF THE V ALUATION OF A PROPERTY, FOR THE PURPOSE OF STAMP DUTY VALUATION , IS 10% MORE THAN THE STATED SALE CONSIDERATION, THE STATED SALE CONSIDERATION WILL B E ACCEPTED AT THE FACE VALUE AND THE ANTI-AVOIDANCE PROVISIONS UNDER SECTION 50C WIL L NOT BE INVOKED. 8. ONCE LEGISLATURE VERY GRACIOUSLY ACCEPTS, BY INTROD UCING 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 UND ER SECTION 50C COULD BE PRESSED INTO SERVICE, AND THUS REMEDIED THE LAW, TH ERE IS NO ESCAPE FROM HOLDING THAT THESE AMENDMENTS ARE EFFECTIVE WITH EFFECT FRO M THE DATE ON WHICH THE RELATED PROVISION, I.E., SECTION 50C, ITSELF WAS IN TRODUCED. THESE AMENDMENTS ARE THUS HELD TO BE RETROSPECTIVE IN EFFECT. IN OUR CON SIDERED 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 NO T 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 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, TRA NSPARENT, 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 P LEA OF THE ASSESSEE. [EMPHASIS ADDED NOW] AS HAS BEEN APTLY EXPLAINED ABOVE, THE RATIONA L FOR HOLDING NEWLY INSERTED PROVISO TO SUB-SECTION (1) TO SECTION 50C OF THE AC T AS CURATIVE IN NATURE, HENCE, HAVING RETROSPECTIVE APPLICATION, THE SAME A NALOGY WOULD APPLY TO THE PROVISIONS OF SECTION 43CA OF THE ACT. BOTH THE SEC TIONS ARE SIMILARLY WORDED EXCEPT THAT BOTH THE SECTIONS HAVE APPLICATION ON D IFFERENT SETS OF ASSESSEE. AS HAS BEEN POINTED EARLIER, SECTION 43CA GETS ATTRACT ED WHERE THE CONSIDERATION RECEIVED OR ACCRUES AS A RESULT OF TRANSFER OF AN A SSET (OTHER THAN A CAPITAL 9 ITA NO .5752/MUM/2019 (A.Y 2016-17) ASSET) BEING LAND OR BUILDING OR BOTH. WHEREAS, PRO VISIONS OF SECTION 50C OPERATES WHERE THE CONSIDERATION RECEIVED OR ACCRUE S AS A RESULT OF TRANSFER OF A CAPITAL ASSET BEING LAND OR BUILDING OR BOTH. BOT H THE SECTIONS INDUCE DEEMING FICTION TO SUBSTITUTE ACTUAL SALE CONSIDERA TION WITH NOTIONAL VALUE OF ASSET BASED ON STAMP DUTY VALUATION. FURTHER, A PER USAL OF CIRCULAR 8 OF 2018 (SUPRA) WOULD SHOW THAT IDENTICAL REASONS HAVE BEEN GIVEN IN PARA 16 FOR RATIONALIZATION OF SECTIONS 43CA AND 50C. THE PRO VISO HAS BEEN INSERTED AND SUBSEQUENTLY TOLERANCE BAND LIMIT HAS BEEN ENHANCED TO MITIGATE HARDSHIP OF GENUINE TRANSACTIONS IN THE REAL ESTATE SECTOR. ERG O, IN THE LIGHT OF REASONING GIVEN FOR INSERTION OF THE PROVISO AND EXPOSITION B Y THE TRIBUNAL FOR RETROSPECTIVE APPLICATION OF THE SAID PROVISO, I HA VE NO HESITATION IN HOLDING THAT THE PROVISO TO SUB-SECTION (1) TO SECTION 43CA AND THE SUBSEQUENT AMENDMENT THERETO RELATES BACK TO THE DATE ON WHICH THE SAID SECTION WAS MADE EFFECTIVE I.E. 01/4/2014. 7. IN LIGHT OF ABOVE FINDINGS, THE ASSESSING OFFICE R IS DIRECTED TO DELETE THE ADDITION OF RS.6,81,500/- UNDER SECTION 43CA OF THE ACT. THE IMPUGNED ORDER IS QUASHED AND APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON FRIDAY, THE 2 ND DAY OF JULY, 2021 SD/- (VIKAS AWASTHY) / JUDICIAL MEMBER / MUMBAI, 0%/ DATED: 02/07/2021 VM , SR. PS (O/S) 10 ITA NO .5752/MUM/2019 (A.Y 2016-17) COPY OF THE ORDER FORWARDED TO : 1. ' / THE APPELLANT , 2. () / THE RESPONDENT. 3. 1) ( )/ THE CIT(A)- 4. 1) CIT 5. 23 ()% , . . . , / DR, ITAT, MUMBAI 6. 345 67 / GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI