Ramesh Govindbhai Patel, Ahmedabad V. ITO, Ward-6(1)(3), Ahmedabad

ITA 64/AHD/2018

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 8851 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 6 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-07-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 24-01-2020
• Assessment Year: 2011-2012
• Appeal Filed On: 04-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Business income; Retrospective amendment; Non-deduction of tax; Fair market value; Capital Gains
• Section: 43CA; 43B; 143(3); 50C; 40(a)(ia); 48; 72; 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER & MS. MADHUMITA ROY, JUDICIAL MEMBER I.T.A. NO. 64/AHD/2018 (ASSESSMENT YEAR: 2011-12) RAMESH GOVINDBHAI PATEL NEAR GOR NO KUVO, MANINAGAR EAST, AHMEDABAD-380008 VS. ITO WARD-6(1)(3), NARAYAN CHAMBERS, AHMEDABAD PAN NO. ACJ PP1 082 C ( APPELLANT ) .. ( RESPONDENT ) APPELLANT BY : SHRI PARIN SHAH, AR RESPONDENT BY : SHRI DILIP KUMAR, SR. D.R. DATE OF HEARING 05.03.2020 DATE OF PRONOUNCEMENT 28.07.2020 O R D E R PER MS. MADHUMITA ROY - JM: THE INSTANT APPEAL FILED BY THE ASSESSEE IS DIRECTE D AGAINST THE ORDER DATED 16.10.2017 PASSED BY THE COMMISSIONER OF INCO ME TAX (APPEALS) 6, AHMEDABAD, ARISING OUT OF THE ORDER DATED 13.12.201 6 PASSED BY THE ITO, WARD 6(1)(3), AHMEDABAD UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED AS TO THE ACT) FOR ASSESSME NT YEAR 2011-12. 2. THE BRIEF FACTS RELATING TO THE CASE IS THIS THA T THE ASSESSEE HAS SOLD IMMOVABLE PROPERTY ON 20.04.2010 LYING AND SITUATED AT SURVEY NO. 570 (T.P. NO. 72 AND FINAL T. P. NO. 44/01) BEING REGISTRATIO N NO. 10577 IN THE CAPACITY OF CONSTITUTED ATTORNEY ON THE BASIS OF AN AGREEMEN T ENTERED INTO BY AND BETWEEN THE ORIGINAL OWNERS (SEVEN IN NUMBERS) ON 2 1.12.1996 WITH ONE ITA NO.64/AHD/2018 RAMESH GOVINDBHAI PATEL VS. ITO ASST.YEAR 2011-12 - 2 - GOVINDBHAI HIRJIBHAI PATEL BEING THE FATHER OF THE APPELLANT FOR A CONSIDERATION OF RS. 2,37,500/-. 3. THE CONSIDERATION OF RS. 2,37,500/- WAS ALSO PAI D ON THE DATE OF AGREEMENT. SUBSEQUENTLY ON 11.10.2010 THE PROPERTY WAS REGISTERED IN FAVOUR OF THE GOVINDBHAI HIRJIBHAI PATEL THROUGH THE CONST ITUTED ATTORNEY BEING RAMESHBHAI G PATEL, THE ASSESSEE HEREIN, THE SON OF THE SAID GOVINDBHAI HIRJIBHAI PATEL, THE PURCHASER, ON BEHALF OF THE VE NDORS; HOWEVER, THE VENDORS SIGNED IN THAT PARTICULAR DEED OF REGISTRATION AS T HE CONFIRMING PARTIES. IT IS PERTINENT TO MENTION THAT THE POWER OF ATTORNEY UND ER WHICH THE ASSESSEE BEFORE US HAS BEEN GIVEN THE AUTHENTICITY TO SIGN O N BEHALF OF THE VENDORS EXECUTED ON 06.07.1997 IS APPEARING AT PAGE 40 TO 4 7 OF THE PAPER BOOK FILED BEFORE US. IT IS ALSO A FACT THAT ON THE DATE OF R EGISTRATION ON 11.10.2010 THE VALUE OF CONSIDERATION WAS DECIDED AT RS. 3,00,000/ -. THE STAMP DUTY PAID WAS OF RS. 2,53,000/-. ON THE OTHER HAND, IN TERMS OF THE STAMP DUTY VALUATION, THE VALUE OF THE LAND WAS DETERMINED AT RS. 51,63,265/- . 4. THE AO ADOPTED THE VALUE OF SALE CONSIDERATION A T RS. 51,62,265/- AND MADE ADDITION OF THE BALANCE AMOUNT. SUCH ADDITION WAS FURTHER BEEN CONFIRMED BY THE FIRST APPELLATE AUTHORITY. HENCE, THE INSTANT APPEAL BEFORE US. 5. (I) THE CASE OF THE ASSESSEE IS THIS THAT THE RE VENUE HAS NOT CONSIDERED THE AMENDMENT BY INTRODUCTION OF PROVISO TO SEC. 50C FINANCE ACT, 2016 IN ITS PROPER PERSPECTIVE; IT IS CURATIVE IN N ATURE AND APPLIES RETROSPECTIVELY AND ACCORDINGLY STAMP DUTY VALUATIO N ON THE DATE OF AGREEMENT TO SALE IS REQUIRED TO BE CONSIDERED WHILE DETERMIN ING CONSIDERATION AS PER DEEMING FICTION UNDER SECTION 50C OF THE ACT. ITA NO.64/AHD/2018 RAMESH GOVINDBHAI PATEL VS. ITO ASST.YEAR 2011-12 - 3 - (II) SECTION 50C APPLIES TO THE SELLER OF THE LAND AND NOT TO THE POWER OF ATTORNEY HOLDER/CONSTITUTED ATTORNEY OF THE TRAN SACTION IN QUESTION. (III) THE ADDITION OF RS. 3,00,000/- IN THE HANDS OF THE ASSESSEE UNDER THE HEAD CAPITAL GAIN IS WRONG SINCE THE APPELLANT IS ONLY THE CONSTITUTED ATTORNEY TO SIGN THE DOCUMENT ON BEHALF OF THE OWNE RS OF THE PROPERTY BY VIRTUE OF THE POWER OF ATTORNEY EXECUTED ON 06.07.1997. (IV) THE LD. CIT(A) OUGHT TO HAVE REFERRED THE MAT TER TO THE DVO FOR DETERMINING THE FAIR MARKET VALUE OF THE LAND AND O UGHT NOT RELIED UPON THE VALUE DETERMINED BY STAMP DUTY AUTHORITY FOR THE PU RPOSE OF PAYMENT OF STAMP DUTY ON THE TRANSFER OF IMMOVABLE PROPERTY. 6. DURING THE ASSESSMENT PROCEEDING THOUGH THE ASSE SSEE MENTIONED ABOUT THE BANAKHAT (THE AGREEMENT FOR SALE DATED 12.12.19 96) AND POWER OF ATTORNEY EXECUTED IN FAVOUR OF THE ASSESSEE DATED 06.07.1996 TO ACT ON BEHALF OF THE VENDORS OF THE PROPERTY, THOSE DOCUMENTS WERE NOT FOUND ON RECORD BY THE LD. AO AND THUS FINALLY BEING NOT CONVINCED WITH THE PL EA OF THE ASSESSEE THAT THE ORIGINAL CONSIDERATION WAS THOUGH OF RS. 2,37,500/- AS PER THE AGREEMENT SUBSEQUENTLY MODIFIED TO THE EXTENT OF RS. 3,00,000 /- ON 12.12.1996 AND FINALLY WHICH STAMP DUTY OF RS. 2,53,000/- WAS PAID , APPLYING THE PROVISION OF SEC. 50C DETERMINED THE VALUE OF THE PROPERTY ON TH E BASIS OF FAIR MARKET VALUE AT RS. 51,63,265/- THEREBY MAKING ADDITION OF THE BALANCE AMOUNT OF RS. 3,00,000/-. IN APPEAL THE LD. CIT(A) WHILE CONFIRM ING THE ADDITION OBSERVED THAT THE APPELLANT BECAME THE DE-FACTO OWNER OF THE LAND BY VIRTUE OF THE POWER OF ATTORNEY GIVEN BY THE ORIGINAL OWNERS ON 06.07.1 997. SUCH FORMATION OF OPINION IS ON THE BASIS OF THIS PARTICULAR FACT THA T THE APPELLANT SIGNED THE DEED ITA NO.64/AHD/2018 RAMESH GOVINDBHAI PATEL VS. ITO ASST.YEAR 2011-12 - 4 - OF SALE AS THE SELLER, WHILE THE ORIGINAL OWNERS HA D SIGNED AS CONFIRMING PARTIES. FURTHER THAT THE LD. CIT(A) REJECTED THE ARGUMENT O F THE ASSESSEE THAT THE JANTRI VALUE FOR THE PURPOSE OF PAYMENT OF STAMP DUTY ADOP TED BY STAMP DUTY AUTHORITY CANNOT BE CONSIDERED CONCLUSIVE, IN THE A BSENCE OF ANY COGENT MATERIAL EVIDENCING THAT APPELLANT HAS NOT RECEIVED THE CONSIDERATION AS PER THE JANTRI VALUE AND NOT AS MENTIONED IN THE SALE DEED. 7. THE LD. COUNSEL APPEARING THAT THE ASSESSEE VEHE MENTLY ARGUED THE MATTER IN FAVOUR OF HIS CASE. THE CRUX OF THE ARGU MENT IS THIS THAT ASSESSEE SINCE ONLY SIGNED THE DEED OF SALE ON BEHALF OF THE VENDORS BY VIRTUE OF THE POWER OF ATTORNEY EXECUTED ON 06.07.1996, HE LEGALL Y CANNOT BE CONSIDERED AS THE VENDOR AND ADDITION AS CAPITAL GAIN IN HIS HAND IS NOT SUSTAINABLE. FURTHER THAT THE VALUATION AS PER THE SAID AGREEMENT OUGHT TO HAVE BEEN CONSIDERED INSTEAD OF FAIR MARKET VALUE ON THE BASIS OF THE ST AMP DUTY MENTIONED AND NOT REFERRING THE MATTER TO THE DVO FOR DETERMINATI ON OF THE MARKET PRICE OF THE PROPERTY IN QUESTION IS ALSO A DEVIATION FROM T HE SPECIFIED LAW. 8. ON THE OTHER HAND, THE LD. DR RELIED UPON THE OR DERS PASSED BY THE AUTHORITIES BELOW. 9. WE HAVE HEARD THE RESPECTIVE PARTIES, WE HAVE AL SO PERUSED THE RELEVANT MATERIALS AVAILABLE ON RECORD. 10. IT IS A FACT THAT BY EXECUTING THE POWER OF ATT ORNEY AS ON 06.07.1997 BY THE VENDORS OF THE PROPERTY IN QUESTION, THE APPELL ANT HAD BEEN GIVEN THE RIGHT TO UNDERTAKE SIGNATURES CONFIRMATIONS AND REGISTRAT ION OF AGREEMENT ETC. ON BEHALF OF THE VENDORS, MEANING THEREBY THE ASSESSEE HAS THE RIGHT TO PUT HIS SIGNATURES IN THE CAPACITY OF THE VENDORS AND NOT I N HIS PERSONAL CAPACITY. ITA NO.64/AHD/2018 RAMESH GOVINDBHAI PATEL VS. ITO ASST.YEAR 2011-12 - 5 - AUTHORITY TO SIGN THE INSTRUMENT ON BEHALF OF THE V ENDORS DOES NOT DEVOLVE ANY SPECIAL POWER ON THE CONSTITUTED ATTORNEY TO ACT AS AN OWNER IN HIS PERSONAL CAPACITY. THUS THE ASSESSEE CANNOT BE SAID TO BE T HE ACTUAL OWNER OF THE PROPERTY IN THE ABSENCE OF ANY CONSIDERATION RECEIV ED AND ENJOYED BY HIM IN RESPECT OF SUCH TRANSACTION. IN A DEED OF SALE, TH E PERSON WHO CONFIRMS SUCH TRANSACTION WITH A FURTHER ASSURANCE OF RELINQUISHI NG HIS INTEREST IN THE PROPERTY, IF ANY, IS SET TO BE THE CONFIRMING PARTY . SINGULARLY, THE CONDUCT OF PUTTING SIGNATURES BY THE VENDORS IN THE DEED OF CO NVEYANCE IS NOTHING BUT AN ASSURANCE OF RELINQUISHMENT OF THEIR RIGHTS, IF ANY , IN THE PROPERTY IN QUESTION. THE BASIC OBJECT BEHIND THIS IS TO AVOID ANY SORT O F FURTHER LITIGATION. IN THIS PARTICULAR CASE THOUGH THE ORIGINAL VENDORS INITIAL LY EXECUTED AND POWER OF ATTORNEY IN FAVOUR OF THE ASSESSEE TO TRANSFER THE PROPERTY ON BEHALF OF THOSE VENDORS IN FAVOUR OF THE PURCHASER, SUBSEQUENTLY SI GNING THE INSTRUMENT AS CONFIRMING PARTY DOES NOT GIVE ANY SCOPE TO DRAW ANY INFERENCE OTHERWISE AS EXPLAINED HEREINABOVE. SUCH SIGNATURE MADE BY THE ORIGINAL VENDORS AS CONFIRMING PARTIES DOES NOT MAKE THE INSTRUMENT EIT HER BAD IN LAW OR QUESTIONABLE IN ANY COUNT. THEIR STATUS REMAINED S AME; NEITHER IT CHANGES THE STATUS OF THE ASSESSEE; SO AS TO RAISE THE QUESTION AS TO WHETHER HE HAS ACTED AS THE ORIGINAL OWNER OR ON BEHALF OF THE ORIGINAL OWN ERS. 11. ON THE OTHER HAND, THE STAMP DUTY OF RS. 53,33, 000/- WAS PAID AS PER VALUATION MADE BY THE REGISTRATION AUTHORITY BUT TH E SAME CANNOT BE CONSIDERED AS THE FINAL VALUATION OF THE PROPERTY IN TERMS OF THE SPECIFIC RULES LAID DOWN BY THE AMENDED PROVISION OF THE 50C OF THE ACT. UNLES S THE CASE IS REFERRED TO THE DVO FOR VALUATION, THE VALUATION OF THE PROPERTY SH OULD BE RESTRICTED TO THE CONSIDERATION MENTIONED IN THE AGREEMENT OF SALE AN D NOT TO THE VALUATION ADOPTED BY ANY OTHER AUTHORITY ON THE DATE OF REGIS TRATION SUBJECT TO CERTAIN ITA NO.64/AHD/2018 RAMESH GOVINDBHAI PATEL VS. ITO ASST.YEAR 2011-12 - 6 - CONSIDERATION WHICH WERE FULFILLED HEREIN. WHEN TH E DATE OF AGREEMENT FIXING THE AMOUNT OF CONSIDERATION AND THE DATE OF REGISTR ATION OF THE PROPERTY BEING THE CAPITAL ASSET IS DIFFERENT, THE VALUE ADOPTED B Y THE STAMP VALUATION AUTHORITY ON THE DATE OF AGREEMENT BE TAKEN FOR THE PURPOSES OF COMPUTING FULL VALUE OF CONSIDERATION OF SUCH TRANSFER. IN THE CASE IN HAN D, THE VALUATION OF PROPERTY ON THE BASIS OF THE STAMP DUTY VALUATION AS ON THE DAT E OF REGISTRATION HAS BEEN DETERMINED WITHOUT REFERRING THE MATTER BEFORE THE DVO FOR VALUATION WHICH OUGHT TO HAVE BEEN DONE BY THE REVENUE; ADDITION MA DE MAINLY ON THE VALUATION ASSESSED BY THE STAMP DUTY AUTHORITY IS, THUS, NOT PERMISSIBLE. ON THIS ISSUE WE HAVE CONSIDERED THE JUDGMENT RELI ED UPON THE BY THE LD. AR PASSED IN THE CO-ORDINATE BENCH IN THE MATTE R OF AMITKUMAR AMBALAL (HUF) VS. ACIT IN ITA NO. 3353/AHD/2014 FOR A.Y. 20 09-10. WHILE DEALING WITH THE IDENTICAL ISSUE THE HONBLE TRIBUNAL HAS B EEN PLEASED TO OBSERVE AS FOLLOWS:- 3. WHEN THIS APPEAL WAS CALLED OUT FOR HEARING, LE ARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE SHORT ISSUE THAT HE WOULD LIKE T O PURSUE IN THIS APPEAL IS THAT THE STAMP DUTY VALUATION FOR THE PURPOSE OF ADOPTING VA LUE OF CONSIDERATION UNDER SECTION 50C SHOULD BE AS ON THE DATE ON WHICH THE A GREEMENT TO SALE WAS ENTERED INTO AND NOT THE DATE ON WHICH THE TRANSACTIONS ACTUALLY TOOK PLACE. LEARNED COUNSEL SUBMITTED THAT THE RELEVANT DATE FOR ASCERTAINING W HETHER OR NOT THE SALE CONSIDERATION IS SUPPRESSED IS THE DATE ON WHICH AN AGREEMENT WAS ENTERED INTO. IN SUPPORT OF THIS PROPOSITION, HE INVITES OUR ATTENTI ON TO A DECISION OF AHMEDABAD SMC BENCH IN THE CASE OF DHARAMSHIBHAI SONANI VS. ACIT (ITA NO.1237/AHD/2013; ORDER DATED 30.09.2016) WHICH, INTER ALIA, OBSERVES AS FO LLOWS: - [4] THE FUNDAMENTAL PURPOSE OF INTRODUCING SECTION 50C WAS TO COUNTER SUPPRESSION OF SALE CONSIDERATION ON SALE OF IMMOVA BLE PROPERTIES, AND THIS SECTION WAS INTRODUCED IN THE LIGHT OF WIDESPREAD BELIEF TH AT SALE TRANSACTIONS OF LAND AND BUILDING ARE OFTEN UNDERVALUED RESULTING IN LEAKAGE OF LEGITIMATE TAX REVENUES. THIS SECTION PROVIDES FOR A PRESUMPTION, A REBUTTABLE PR ESUMPTION THOUGH-SOMETHING WITH WHICH I AM NOT CONCERNED FOR THE TIME BEING, THAT T HE VALUE, FOR THE PURPOSE OF COMPUTING STAMP DUTY, ADOPTED BY THE STAMP DUTY VAL UATION AUTHORITY REPRESENTS FAIR INDICATION OF THE MARKET PRICE OF THE PROPERTY SOLD . SECTION 50C(1) PROVIDES THAT, WHERE THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF THE TRANSFER BY AN ASSESSEE OF A CAPITAL ASSET, BEING LAND OR BUILDING OR BOTH, IS LESS THAN THE VALUE ADOPTED OR ASSESSED OR ASSESSABLE BY ANY AUTHORITY OF A STATE GOVERNMENT (HEREAFTER ITA NO.64/AHD/2018 RAMESH GOVINDBHAI PATEL VS. ITO ASST.YEAR 2011-12 - 7 - IN THIS SECTION REFERRED TO AS THE '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, FOR THE PURPOSES OF SECTION 48 , BE DEEMED TO BE THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF SUCH TRANSFER. THE TROUBLE, HOWEVER, IS THAT WHILE THE SALE CONSIDERATION IS FI XED AT THE POINT OF TIME WHEN AGREEMENT TO SELL IS ENTERED INTO, THERE IS SOMETIM ES CONSIDERABLE GAP IN PARTIES AGREEING TO A TRANSACTION (I.E. AGREEMENT TO SELL) AND THE ACTUAL EXECUTION OF THE TRANSACTION (I.E. SALE DEED), AND YET, IT IS THE VA LUE AS ON THE DATE OF EXECUTION OF SALE DEED WHICH IS RECOGNIZED BY SECTION 50C FOR THE PUR POSE OF COMPUTING THE CAPITAL GAIN BECAUSE THAT IS WHAT IS RELEVANT FOR THE PURPO SE OF COMPUTING STAMP DUTY FOR REGISTRATION OF SALE DEED. THE VERY COMPARISON BETW EEN THE VALUE AS PER SALE DEED AND THE VALUE AS PER STAMP DUTY VALUATION, ACCORDIN GLY, CEASES TO BE DEVOID OF A RATIONAL BASIS BECAUSE THESE TWO VALUES REPRESENT T HE VALUES AT TWO DIFFERENT POINTS OF TIME. IN A SITUATION IN WHICH THERE IS SIGNIFICANT DIFFERENCE BETWEEN THE POINT OF TIME WHEN AGREEMENT TO SELL IS EXECUTED AND WHEN THE SAL E DEED IS EXECUTED, THEREFORE, SHOULD IDEALLY BE BETWEEN THE SALE CONSIDERATION AS PER REGISTERED SALE DEED, WHICH IS FIXED BY WAY OF THE AGREEMENT TO SELL, VIS--VIS TH E STAMP DUTY VALUATION AS AT THE POINT OF TIME WHEN AGREEMENT TO SELL, WHEREBY SALE CONSIDERATION WAS IN FACT FIXED, BECAUSE, IF AT ALL ANY SUPPRESSION OF SALE CONSIDER ATION SHOULD BE ASSUMED, IT SHOULD BE ON THE BASIS OF STAMP DUTY VALUATION AS AT THE P OINT OF TIME WHEN THE SALE CONSIDERATION WAS FIXED. INCOME TAX SIMPLIFICATION COMMITTEE SET UP IN 2015, HEADED BY JUSTICE R V EASWAR- A FORMER JUDGE OF DEL HI HIGH COURT AND ONE OF THE MOST ILLUSTRIOUS FORMER PRESIDENTS OF THIS TRIBUNAL , TOOK NOTE OF THIS INCONGRUITY AND, IN ITS VERY FIRST REPORT (HTTP://TAXSIMPLIFICATION. IN/REPORT.PDF), OBSERVED AS FOLLOWS: 6.1 RATIONALISATION OF SECTION 50C TO PROVIDE RELIE F WHERE SALE CONSIDERATION FIXED UNDER AGREEMENT TO SELL SECTION 50C MAKES A SPECIAL PROVISION FOR DETERMINING THE FULL VALUE OF CONSIDERATION IN CASES OF TRANSFER OF IMMOVABLE PROPERTY. IT PROVIDES THAT WHERE THE C ONSIDERATION DECLARED TO BE RECEIVED OR ACCRUING AS A RESULT OF THE TRANSFER OF LAND OR BUILDING 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 T HE PURPOSE OF PAYMENT OF STAMP DUTY IN RESPECT OF SUCH TRANSFER, THE VALUE SO ADOP TED OR ASSESSED OR ASSESSABLE SHALL BE DEEMED TO BE THE FULL VALUE OF THE CONSIDERATION , AND CAPITAL GAINS SHALL BE COMPUTED ON THE BASIS OF SUCH CONSIDERATION UNDER S ECTION 48 OF THE INCOMETAX ACT. THE SCOPE OF SECTION 50C WAS EXTENDED W.E.F. A.Y. 2 010-11 TO THE TRANSACTION WHICH WERE EXECUTED THROUGH AGREEMENT TO SELL OR POWER OF ATTORNEY BY INSERTING THE WORD ASSESSABLE ALONGWITH WORDS THE VALUE SO ADOPTED OR ASSESSED. HENCE, SECTION 50C IS NOW ALSO APPLICABLE IN CASE OF SUCH TRANSFER S. THE PRESENT PROVISIONS OF SECTION 50C DO NOT PROVIDE ANY RELIEF WHERE THE SEL LER HAS ENTERED INTO AN AGREEMENT TO SELL THE ASSET MUCH BEFORE THE ACTUAL DATE OF TR ANSFER OF THE IMMOVABLE PROPERTY AND THE SALE CONSIDERATION HAS BEEN FIXED IN SUCH A GREEMENT. A LATER SIMILAR 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 TRANS FER OF THE ASSET ARE NOT SAME, THE VALUE REFERRED TO IN SUB- SECTION (1) MAY BE TAKEN AS THE VALUE ASSESSABLE BY ANY ITA NO.64/AHD/2018 RAMESH GOVINDBHAI PATEL VS. ITO ASST.YEAR 2011-12 - 8 - AUTHORITY OF A STATE GOVERNMENT FOR 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 ONLY IN A CASE WHERE THE AMOUNT OF CONS IDERATION OR A PART THEREOF HAS BEEN RECEIVED BY ANY MODE OTHER THAN CASH ON OR BEF ORE A DATE OF AGREEMENT FOR TRANSFER OF THE ASSET. [5] TRUE TO THE WORK ETHOS O F THE CURRENT GOVERNMENT, IT WAS THE FIRST TIME THAT WITHIN FOUR MONTHS OF THE TAX SIMPL IFICATION COMMITTEE BEING NOTIFIED, NOT ONLY THE FIRST REPORT OF THE COMMITTEE WAS SUBM ITTED, BUT THE GOVERNMENT ALSO WALKED THE TALK BY ENSURING THAT THE SEVERAL STATUT ORY AMENDMENTS, BASED ON RECOMMENDATIONS OF THIS REPORT, WERE INTRODUCED IN THE PARLIAMENT. SO FAR AS SECTION 50 C IS CONCERNED, THE FINANCE ACT 2016, WITH EFFEC T FROM 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 REGISTRATION FOR THE TRANSFER OF TH E CAPITAL ASSET ARE NOT THE SAME, THE VALUE ADOPTED OR ASSESSED OR ASSESSABLE BY THE STAM P VALUATION AUTHORITY ON THE DATE OF AGREEMENT MAY BE TAKEN FOR THE PURPOSES OF COMPU TING FULL VALUE OF CONSIDERATION FOR SUCH TRANSFER: PROVIDED FURTHER 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 BANK DRAFT OR BY USE OF ELE CTRONIC CLEARING SYSTEM THROUGH A BANK ACCOUNT, ON OR BEFORE THE DATE OF THE AGREEMEN T FOR TRANSFER. [6] THIS AMENDMENT WAS EXPLAINED, IN THE MEMORANDUM EXPLAINING THE PROVISIONS OF FINANCE BILL 2016 (HTTP://INDIABUDGET.NIC.IN/UB2 016- 17/MEMO/MEM1.PDF), AS FOLLOWS: RATIONALIZATION OF SECTION 50C IN CASE SAL E CONSIDERATION IS FIXED UNDER AGREEMENT EXECUTED PRIOR TO THE DATE OF REGISTRATIO N OF IMMOVABLE PROPERTY UNDER THE EXISTING PROVISIONS CONTAINED IN SECTION 50C, I N CASE OF TRANSFER OF A CAPITAL ASSET BEING LAND OR BUILDING ON BOTH, THE VALUE ADOPTED O R ASSESSED BY THE STAMP VALUATION AUTHORITY FOR THE 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 THAT THIS PROVISION DOES NOT PROVIDE ANY RELIEF WHERE TH E SELLER HAS ENTERED INTO AN AGREEMENT TO SELL THE PROPERTY MUCH BEFORE THE ACTU AL DATE OF TRANSFER OF THE IMMOVABLE PROPERTY AND THE SALE CONSIDERATION IS FI XED IN SUCH AGREEMENT, WHEREAS SIMILAR PROVISION EXISTS IN SECTION 43CA OF THE ACT I.E. WHEN AN IMMOVABLE PROPERTY IS SOLD AS A STOCK-IN-TRADE. IT IS PROPOSED TO AMEN D THE PROVISIONS OF SECTION 50C SO AS TO PROVIDE THAT WHERE THE DATE OF THE AGREEMENT FIXING THE AMOUNT OF CONSIDERATION FOR THE TRANSFER OF IMMOVABLE PROPERTY AND THE DATE OF REGISTRATION ARE NOT THE SAME, THE STAMP DUTY VALUE ON THE DATE OF THE AGREEMENT M AY BE TAKEN FOR THE PURPOSES OF COMPUTING THE FULL VALUE OF CONSIDERATION. IT IS FU RTHER PROPOSED TO PROVIDE THAT THIS PROVISION SHALL APPLY ONLY IN A CASE WHERE THE AMOU NT 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 ELECTRONIC CLEAR ING SYSTEM THROUGH A BANK ACCOUNT, ON OR BEFORE THE DATE OF THE AGREEMENT FOR THE TRANSFER OF SUCH IMMOVABLE PROPERTY. 30 THESE AMENDMENTS ARE PROPOSED TO BE MA DE EFFECTIVE FROM THE 1ST DAY OF APRIL, 2017 AND SHALL ACCORDINGLY APPLY IN RELATION TO ASSESSMENT YEAR 2017-18 AND SUBSEQUENT YEARS. ITA NO.64/AHD/2018 RAMESH GOVINDBHAI PATEL VS. ITO ASST.YEAR 2011-12 - 9 - [7] WHILE THE GOVERNMENT HAS THUS RECOGNIZED THE GE NUINE AND INTENDED HARDSHIP IN THE CASES IN WHICH THE DATE OF AGREEMENT TO SELL IS PRIOR TO THE DATE OF SALE, AND INTRODUCED WELCOME AMENDMENTS TO THE STATUE TO TAKE THE REMEDIAL MEASURES, THIS BRINGS NO RELIEF TO THE ASSESSEE BEFORE ME AS THE A MENDMENT IS INTRODUCED ONLY WITH PROSPECTIVE EFFECT FROM 1ST APRIL 2017. THERE CANNO T BE ANY DISPUTE THAT THIS AMENDMENT IN THE SCHEME OF SECTION 50C HAS BEEN MAD E TO REMOVE AN INCONGRUITY, RESULTING IN UNDUE HARDSHIP TO THE ASSESSEE, AS IS EVIDENT FROM THE OBSERVATION IN EASWAR COMMITTEE REPORT TO THE EFFECT THAT THE (TH EN PREVAILING) PROVISIONS OF SECTION 50C DO NOT PROVIDE ANY RELIEF WHERE THE SEL LER HAS ENTERED INTO AN AGREEMENT TO SELL THE ASSET MUCH BEFORE THE ACTUAL DATE OF TR ANSFER OF THE IMMOVABLE PROPERTY AND THE SALE CONSIDERATION HAS BEEN FIXED IN SUCH A GREEMENT RECOGNIZING THE INCONGRUITY THAT THE DATE AGREEMENT OF SELL HAS BEE N IGNORED IN THE STATUTE EVEN THOUGH IT WAS CRUCIAL AS IT WAS AT THIS POINT OF TI ME THAT THE SALE 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 A PPARENT INCONGRUITY, SUCH AN AMENDMENT HAS TO BE TREATED AS EFFECTIVE FROM THE D ATE ON WHICH THE LAW, CONTAINING SUCH AN UNDUE HARDSHIP OR INCONGRUITY, WAS INTRODUC ED. IN SUPPORT OF THIS PROPOSITION, I FIND SUPPORT FROM HONBLE DELHI HIGH COURTS JUDGMENT IN THE CASE OF CIT VS ANSAL LANDMARK TOWNSHIP PVT LTD [(2015) 377 ITR 635 (DEL)], WHEREIN APPROVING THE REASONING ADOPTED AN ORDER AUTHORED B Y ME DURING MY TENURE AT AGRA BENCH [I..E RAJEEV KUMAR AGARWAL VS ACIT (2014) 149 ITD 363 (AGRA)] WHICH CENTRED ON THE PRINCIPLE THAT WHEN LEGISLATURE IS R EASONABLE AND COMPASSIONATE ENOUGH TO UNDO THE UNDUE HARDSHIP CAUSED BY THE STA TUTE 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 A S RETROSPECTIVE IN NATURE EVEN THOUGH IT MAY NOT STATE SO SPECIFICALLY. IN THIS C ASE, IT WAS SPECIFICALLY OBSERVED, AND IT WAS THIS OBSERVATION WHICH WAS REPRODUCED WITH A PPROVAL BY THEIR LORDSHIPS, AS FOLLOWS: NOW THAT THE LEGISLATURE HAS BEEN COMPASS IONATE ENOUGH TO CURE THESE SHORTCOMINGS OF PROVISION, AND THUS OBVIATE THE UNI NTENDED HARDSHIPS, SUCH AN AMENDMENT IN LAW, IN VIEW OF THE WELL SETTLED LEGAL POSITION TO THE EFFECT THAT A CURATIVE AMENDMENT TO AVOID UNINTENDED CONSEQUENCES IS TO BE TREATED AS RETROSPECTIVE IN NATURE EVEN THOUGH IT MAY NOT STAT E SO SPECIFICALLY, THE INSERTION OF SECOND PROVISO MUST BE GIVEN RETROSPECTIVE EFFECT F ROM THE POINT OF TIME WHEN THE RELATED LEGAL PROVISION WAS INTRODUCED. IN VIEW OF THESE DISCUSSIONS, AS ALSO FOR THE DETAILED REASONS SET OUT EARLIER, WE CANNOT SUBSCRI BE TO THE VIEW THAT IT COULD HAVE BEEN AN 'INTENDED CONSEQUENCE' TO PUNISH THE ASSESS EES FOR NON-DEDUCTION OF TAX AT SOURCE BY DECLINING THE DEDUCTION IN RESPECT OF REL ATED PAYMENTS, EVEN WHEN THE CORRESPONDING INCOME IS DULY BROUGHT TO TAX. THAT W ILL BE GOING MUCH BEYOND THE OBVIOUS INTENTION OF THE SECTION. ACCORDINGLY, WE H OLD THAT THE INSERTION OF SECOND PROVISO TO SECTION 40(A)(IA) IS DECLARATORY AND CUR ATIVE IN NATURE AND IT HAS RETROSPECTIVE EFFECT FROM 1ST APRIL, 2005, BEING TH E DATE FROM WHICH SUB CLAUSE (IA) OF SECTION 40(A) WAS INSERTED BY THE FINANCE (NO. 2) A CT, 2004 [8] THEIR LORDSHIPS WERE PLEASED TO HOLD THAT THIS REASONING AND RATIONALE OF THIS DECISION MERITS ACCEPTANCE. THE SAME PRINCIPLE, W HEN APPLIED IN THE PRESENT CONTEXT, LEADS TO THE CONCLUSION THAT THE PRESENT A MENDMENT, BEING AN AMENDMENT TO ITA NO.64/AHD/2018 RAMESH GOVINDBHAI PATEL VS. ITO ASST.YEAR 2011-12 - 10 - REMOVE AN APPARENT INCONGRUITY WHICH RESULTED IN UN DUE HARDSHIPS TO THE TAXPAYERS, SHOULD BE TREATED AS RETROSPECTIVE IN EFFECT. QUITE CLEARLY THEREFORE, EVEN WHEN THE STATUTE DOES NOT SPECIFICALLY STATE SO, SUCH AMENDM ENTS, IN THE LIGHT OF THE DETAILED DISCUSSIONS ABOVE, CAN ONLY BE TREATED AS RETROSPEC TIVE AND EFFECTIVE FROM THE DATE RELATED STATUTORY PROVISIONS WAS INTRODUCED. VIEWED THUS, THE PROVISO TO SECTION 50 C SHOULD ALSO BE TREATED AS CURATIVE IN NATURE AND WI TH RETROSPECTIVE EFFECT FROM 1ST APRIL 2003, I.E. THE DATE EFFECTIVE FROM WHICH SECT ION 50C WAS INTRODUCED. WHILE THE GOVERNMENT MUST BE COMPLIMENTED FOR THE UNPARALLELE D SWIFTNESS WITH WHICH THE EASWAR COMMITTEE RECOMMENDATIONS, AS ACCEPTED BY TH E GOVERNMENT, WERE IMPLEMENTED, I, AS A JUDICIAL OFFICER, WOULD THINK THIS WAS STILL ONE STEP SHORT OF WHAT OUGHT TO HAVE BEEN DONE INASMUCH AS THE AMENDMENT, IN TUNE WITH THE JUDGE MADE LAW, OUGHT TO HAVE BEEN EFFECTIVE FROM THE DATE ON WHICH THE RELATED LEGAL PROVISIONS WERE INTRODUCED. AS I SAY SO, IN ADDITION TO THE RE ASONING GIVEN EARLIER IN THIS ORDER, I MAY ALSO REFER TO THE OBSERVATIONS OF HONBLE SUP REME 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 WO ULD APPLY RETROSPECTIVELY W.E.F. 1ST APRIL, 1988 (I.E. THE DATE ON WHICH THE RELATED LEGAL PROVISION WAS INTRODUCED). SECONDLY, IT MAY BE NOTED THAT, IN THE CASE OF ALLI ED 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 WHI CH AROSE FOR DETERMINATION WAS, WHETHER SALES-TAX COLLECTED BY THE ASSESSEE AND PAI D AFTER THE END OF THE RELEVANT PREVIOUS YEAR BUT WITHIN THE TIME ALLOWED UNDER THE RELEVANT SALES-TAX LAW SHOULD BE DISALLOWED 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 30TH JUNE, 1983. THE ITO DISALLOWED THE DEDUCTION CLAIMED BY THE ASSESSEE WHICH WAS ON ACCOUNT OF SAL ES-TAX COLLECTED BY THE ASSESSEE FOR THE LAST QUARTER OF THE RELEVANT ACCOUNTING YEA R. THE DEDUCTION WAS DISALLOWED UNDER S. 43B WHICH, AS STATED ABOVE, WAS INSERTED W .E.F. 1ST APRIL, 1984. IT IS ALSO RELEVANT TO NOTE THAT THE FIRST PROVISO WHICH CAME INTO FORCE W.E.F. 1ST APRIL, 1988 WAS NOT ON THE STATUTE BOOK WHEN THE ASSESSMENTS WERE M ADE IN THE CASE OF ALLIED MOTORS (P) LTD. ETC. (SUPRA). HOWEVER, THE ASSESSEE CONTEN DED THAT EVEN THOUGH THE FIRST PROVISO CAME TO BE INSERTED W.E.F. 1ST APRIL, 1988, IT WAS ENTITLED TO THE BENEFIT OF THAT PROVISO BECAUSE IT OPERATED RETROSPECTIVELY FROM 1S T APRIL, 1984, WHEN S. 43B STOOD INSERTED. THIS IS HOW THE QUESTION OF RETROSPECTIVI TY 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 CONSEQUENC ES AND TO MAKE THE SECTION WORKABLE, A PROVISO WHICH SUPPLIES AN OBVIOUS OMISS ION IN THE SECTION AND WHICH PROVISO IS REQUIRED TO BE READ INTO THE SECTION TO GIVE THE SECTION A REASONABLE INTERPRETATION, IT COULD BE READ RETROSPECTIVE IN O PERATION, PARTICULARLY TO GIVE EFFECT TO THE SECTION AS A WHOLE. ACCORDINGLY, THIS COURT, IN ALLIED MOTORS (P) LTD. ETC. (SUPRA), HELD THAT THE FIRST PROVISO WAS CURATIVE I N NATURE, HENCE, RETROSPECTIVE IN OPERATION W.E.F. 1ST APRIL, 1988. IT IS IMPORTANT T O NOTE ONCE AGAIN THAT, BY FINANCE ACT, 2003, NOT ONLY THE SECOND PROVISO IS DELETED B UT EVEN THE FIRST PROVISO IS SOUGHT TO BE AMENDED BY BRINGING ABOUT AN UNIFORMITY IN TA X, DUTY, CESS AND FEE ON THE ONE HAND VIS-A-VIS CONTRIBUTIONS TO WELFARE FUNDS OF EM PLOYEE(S) ON THE OTHER. THIS IS ONE ITA NO.64/AHD/2018 RAMESH GOVINDBHAI PATEL VS. ITO ASST.YEAR 2011-12 - 11 - MORE REASON WHY WE HOLD THAT THE FINANCE ACT, 2003, IS RETROSPECTIVE IN OPERATION. MOREOVER, THE JUDGMENT IN ALLIED MOTORS (P) LTD. ET C. (SUPRA) IS DELIVERED BY A BENCH OF THREE LEARNED JUDGES, WHICH IS BINDING ON US. ACCORDINGLY, WE HOLD THAT FINANCE ACT, 2003, WILL OPERATE RETROSPECTIVELY W.E .F. 1ST APRIL, 1988 (WHEN THE FIRST PROVISO STOOD INSERTED). LASTLY, WE MAY POINT OUT T HE HARDSHIP AND THE INVIDIOUS DISCRIMINATION WHICH WOULD BE CAUSED TO THE ASSESSE E(S) IF THE CONTENTION OF THE DEPARTMENT IS TO BE ACCEPTED THAT FINANCE ACT, 2003 , TO THE ABOVE EXTENT, OPERATED PROSPECTIVELY. TAKE AN EXAMPLEIN THE PRESENT CASE, THE RESPONDENTS HAVE DEPOSITED THE CONTRIBUTIONS WITH THE R.P.F.C. AFTER 31ST MARC H (END OF ACCOUNTING YEAR) BUT BEFORE FILING OF THE RETURNS UNDER THE IT ACT AND T HE DATE OF PAYMENT FALLS AFTER THE DUE DATE UNDER THE EMPLOYEES' PROVIDENT FUND ACT, T HEY WILL BE DENIED DEDUCTION FOR ALL TIMES. IN VIEW OF THE SECOND PROVISO, WHICH STO OD ON THE STATUTE BOOK AT THE RELEVANT TIME, EACH OF SUCH ASSESSEE(S) WOULD NOT B E ENTITLED TO DEDUCTION UNDER S. 43B OF THE ACT FOR ALL TIMES. THEY WOULD LOSE THE B ENEFIT OF DEDUCTION EVEN IN THE YEAR OF ACCOUNT IN WHICH THEY PAY THE CONTRIBUTIONS TO T HE WELFARE FUNDS, WHEREAS A DEFAULTER, WHO FAILS TO PAY THE CONTRIBUTION TO THE WELFARE FUND RIGHT UPTO 1ST APRIL, 2004, AND WHO PAYS THE CONTRIBUTION AFTER 1ST APRIL , 2004, WOULD GET THE BENEFIT OF DEDUCTION UNDER S. 43B OF THE ACT. IN OUR VIEW, THE REFORE, FINANCE ACT, 2003, TO THE EXTENT INDICATED ABOVE, SHOULD BE READ AS RETROSPEC TIVE. IT WOULD, THEREFORE, OPERATE FROM 1ST APRIL, 1988, WHEN THE FIRST PROVISO WAS IN TRODUCED. IT IS TRUE THAT THE PARLIAMENT HAS EXPLICITLY 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 FINANCE ACT, 2003. [9] SO FAR AS THE AMENDMENT TO SECTION 50C BEING RE TROSPECTIVE IN EFFECT IS CONCERNED, THERE IS NO DOUBT ABOUT THE LEGAL POSITI ON. I HOLD THE PROVISOS TO SECTION 50C BEING EFFECTIVE FROM 1ST APRIL 2003. THIS IS PR ECISELY WHAT THE LEARNED COUNSEL HAS PRAYED FOR. IN HIS DETAILED WRITTEN SUBMISSIONS , HE HAS MADE OUT OF A STRONG CASE FOR THE AMENDMENT TO SECTION 50C BEING TREATED AS R ETROSPECTIVE AND WITH EFFECT FROM 1ST APRIL 2003. THE PLEA OF THE ASSESSEE IS INDEED WELL TAKEN AND DESERVES ACCEPTANCE. WHAT FOLLOWS IS THIS. THE MATTER WILL N OW GO BACK TO THE ASSESSING OFFICER. IN CASE HE FINDS THAT A REGISTERED AGREEME NT TO SELL, AS CLAIMED BY THE ASSESSEE, WAS ACTUALLY EXECUTED ON 29.6.2005 AND TH E PARTIAL SALE CONSIDERATION WAS RECEIVED THROUGH BANKING CHANNELS, THE ASSESSING OF FICER, SO FAR AS COMPUTATION OF CAPITAL GAINS IS CONCERNED, WILL ADOPT STAMP DUTY V ALUATION, AS ON 29.6.2005, OF THE PROPERTY SOLD AS IT EXISTED AT THAT POINT OF TIME. IN CASE THE ASSESSEE IS NOT CONTENT WITH THIS VALUE BEING ADOPTED UNDER SECTION 50C, HE WILL BE AT LIBERTY TO SEEK THE MATTER BEING REFERRED TO THE DVO FOR VALUATION, AGA IN AS ON 29.6.2005, OF THE SAID PROPERTY. AS A COROLLARY THERETO, THE SUBSEQUENT DE VELOPMENTS IN RESPECT OF THE PROPERTY SOLD (E.G. THE CONVERSION OF USE OF LAND) ARE TO BE IGNORED. IT IS ON THIS BASIS THAT THE CAPITAL GAINS WILL BE RECOMPUTED. WITH THE SE DIRECTIONS, THE MATTER STANDS RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR A DJUDICATION DE NOVO, AFTER GIVING AN OPPORTUNITY OF HEARING TO THE ASSESSEE AND BY WAY O F A SPEAKING ORDER. I ORDER SO. 4. LEARNED COUNSEL THEN ALSO INVITES OUR ATTENTION TO A DECISION OF HONBLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS SHIMBHU MEHRA, [2016] 65 TAXMANN.COM 142 (ALLAHABAD), IN SUPPORT OF THE SAME PROPOSITION . LEARNED COUNSEL THEN INVITES OUR ATTENTION TO THE COPY OF THE AGREEMENT TO SALE WHICH IS PLACED AT PAGE NOS. 1-8 OF ITA NO.64/AHD/2018 RAMESH GOVINDBHAI PATEL VS. ITO ASST.YEAR 2011-12 - 12 - THE PAPER BOOK AS ALSO THE COPY OF THE SALE DEED WH ICH IS PLACED AT PAGE NOS. 9-30 OF THE PAPER-BOOK. LEARNED COUNSEL FURTHER POINTS OUT THAT THE DATES ON WHICH RELEVANT PAYMENTS ARE MADE ARE CLEARLY SET OUT IN THE SALE D EED AT INTERNAL PAGE NO.12, WHICH ARE IN ACCORDANCE WITH THE AGREEMENT TO SALE. LEARN ED COUNSEL THUS CONTENDS THAT THE BONAFIDES OF THE AGREEMENT TO SALE, IN THE LIGHT OF THE DATES ON WHICH THE PAYMENTS ARE MADE, CANNOT BE DOUBTED. ON THE STRENGTH OF THI S SUBMISSION, WE ARE URGED TO REMIT THIS ISSUE TO THE FILE OF THE ASSESSING OFFIC ER WITH THE DIRECTION THAT THE STAMP DUTY VALUATION AS ON THE DATE ON WHICH THE AGREEMEN T TO SALE WAS ENTERED INTO SHOULD BE TAKEN FOR THE PURPOSES OF APPLICATION OF SECTION 50C AND NOT THE DATE ON WHICH THE SALE DEED WAS ACTUALLY EXECUTED. 5. LEARNED DEPARTMENTAL REPRESENTATIVE, ON THE OTHE R HAND, RELIES UPON THE ORDERS OF THE AUTHORITIES BELOW AND SUBMITS THAT THE PROVISIO NS OF THE STATUTE ARE CLEAR AND UNAMBIGUOUS INASMUCH AS THE RELEVANT DATE FOR THE P URPOSE OF SECTION 50C STAMP DUTY VALUE IS THE DATE ON WHICH THE SALE DEED IS EN TERED INTO. 6. HAVING HEARD THE RIVAL CONTENTIONS AND HAVING PE RUSED THE MATERIAL ON RECORD, WE FIND THAT THE ISSUE IN APPEAL IS SQUARELY COVERED B Y THE TRIBUNALS DECISION IN THE CASE OF DHARAMSHIBHAI SONANI (SUPRA), WHICH HAS BEE N SUBSEQUENTLY FOLLOWED BY LARGE NUMBER OF DIVISION BENCH OF THIS TRIBUNAL. AS RIGHTLY HELD BY THE TRIBUNAL IN THE CASE OF DHARAMSHIBHAI SONANI (SUPRA), THE AMENDMENT BROUGHT ABOUT BY FINANCE ACT, 2016, PROVIDING THAT WHERE THE DATE OF THE AG REEMENT 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 ASSESSAB LE BY THE STAMP VALUATION AUTHORITY ON THE DATE OF AGREEMENT MAY BE TAKEN FOR THE PURPOSES OF COMPUTING FULL VALUE OF CONSIDERATION FOR SUCH TRANSFER, IS RETRO SPECTIVE IN EFFECT AND APPLIES FROM 1 ST APRIL 2003. THE DETAILED REASONS FOR COMING TO T HIS CONCLUSION ARE ALREADY SET OUT IN THE EXTRACT FROM THE TRIBUNALS DECISION QUOTED EARLIER IN THIS ORDER. 7. IN VIEW OF THESE DISCUSSIONS AND BEARING IN MIND ENTIRETY OF THE CASE, WE ARE OF THE CONSIDERED VIEW THAT THE PLEA OF THE LEARNED COUNSE L INDEED MERITS ACCEPTANCE. WE, THEREFORE, DEEM IT FIT AND PROPER TO REMIT THE ISSU E TO THE FILE OF THE ASSESSING OFFICER FOR ADJUDICATION DE NOVO IN THE LIGHT OF OBSERVATIO NS ABOVE AND THE LEGAL POSITION SET OUT IN DHARAMSHIBHAI SONANI (SUPRA). ORDERED, ACCOR DINGLY. 8. IN THE RESULT, APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT TODAY ON THIS 30TH DAY OF NOVEMBER, 2017. THUS, IT APPEARS FROM THE ACT AS WELL AS FROM THE J UDGMENT AS ABOVE THAT WHEN THE DATE OF AGREEMENT FIXING THE AMOUNT OF CON SIDERATION AND THE DATE OF REGISTRATION OF THE PROPERTY BEING THE CAPITAL ASSE T IS DIFFERENT, THE MATTER SHOULD BE REFERRED TO THE DVO BY THE LD. AO FOR DET ERMINATION OF THE VALUATION AS ON THE DATE OF AGREEMENT KEEPING IN VI EW THE PROVISION OF SEC. 50C OF THE ACT INSTEAD OF THAT AS WE FIND IN THE CA SE IN HAND THE REVENUE HAS ITA NO.64/AHD/2018 RAMESH GOVINDBHAI PATEL VS. ITO ASST.YEAR 2011-12 - 13 - ASSESSED THE VALUATION OF THE PROPERTY ON THE BASIS OF THE VALUATION SO ASSESSED BY THE STAMP DUTY AUTHORITY AND THE DIFFERENCE AMOU NT HAS BEEN ADDED TO THE TOTAL INCOME OF THE ASSESSEE WHICH IN OUR CONSIDERE D VIEW IS NOT PERMISSIBLE IN LAW. WE, THEREFORE, FOLLOWING THE RATIO LAID DOWN OF THE ABOVE JUDGMENT DO NOT HESITATE TO QUASH THE ORDER IMPUGNED AND WE DEL ETE THE ADDITION MADE THEREOF. HENCE, ASSESSEES APPEAL IS ALLOWED. 12. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. 13. BEFORE PARTING WE WOULD LIKE TO MAKE CERTAIN OB SERVATION RELATING TO THE ISSUE CROPPED UP UNDER PRESENT SCENARIO OF COVID-19 PANDEMIC AS TO WHETHER WHEN THE HEARING OF THE MATTER WAS CONCLUDED ON 05. 03.2020 THE ORDER CAN BE PRONOUNCED TODAY I.E. ON 27.07.2020. THE ISSUE HAS ALREADY BEEN DISCUSSED BY THE CO-ORDINATE BENCH IN THE CASE OF DCIT VS. JSW L TD. (ITA NOS. 6264 & 6103/MUM/2018) PRONOUNCED ON 14.05.2020 IN THE LIGH T OF WHICH IT IS WELL WITHIN THE TIME LIMIT PERMITTED UNDER RULE 34(5) OF THE APPELLATE TRIBUNAL RULES, 1963 IN VIEW OF THE FOLLOWING OBSERVATIONS M ADE THEREIN: 7. HOWEVER, BEFORE WE PART WITH THE MATTER, WE MUS T DEAL WITH ONE PROCEDURAL ISSUE AS WELL. WHILE HEARING OF THESE A PPEALS WAS CONCLUDED ON 8TH JANUARY 2020, THIS ORDER THEREON IS BEING PRONOUNCE D TODAY ON THE DAY OF 14TH MAY, 2020, MUCH AFTER THE EXPIRY OF 90 DAYS FROM TH E DATE OF CONCLUSION OF HEARING. WE ARE ALSO ALIVE TO THE FACT THAT RULE 34 (5) OF THE INCOME TAX APPELLATE TRIBUNAL RULES 1963, WHICH DEALS WITH PRO NOUNCEMENT OF ORDERS, PROVIDES AS FOLLOWS: (5) THE PRONOUNCEMENT MAY BE IN ANY OF THE FOLLOWIN G MANNERS : (A) THE BENCH MAY PRONOUNCE THE ORDER IM MEDIATELY UPON THE CONCLUSION OF THE HEARING. ITA NO.64/AHD/2018 RAMESH GOVINDBHAI PATEL VS. ITO ASST.YEAR 2011-12 - 14 - (B) IN CASE WHERE THE ORDER IS NOT PRONO UNCED IMMEDIATELY ON THE CONCLUSION OF THE HEARING, THE BENCH SHALL GIVE A D ATE FOR PRONOUNCEMENT. (C) IN A CASE WHERE NO DATE OF PRONOUNCE MENT IS GIVEN BY THE BENCH, EVERY ENDEAVOUR SHALL BE MADE BY THE BENCH TO PRONOUNCE T HE ORDER WITHIN 60 DAYS FROM THE DATE ON WHICH THE HEARING OF THE CASE WAS CONCLUDED BUT, WHERE IT IS NOT PRACTICABLE SO TO DO ON THE GROUND OF EXCEPTIONAL A ND EXTRAORDINARY CIRCUMSTANCES OF THE CASE, THE BENCH SHALL FIX A FU TURE DAY FOR PRONOUNCEMENT OF THE ORDER, AND SUCH DATE SHALL NOT ORDINARILY (EMPH ASIS SUPPLIED BY US NOW) BE A DAY BEYOND A FURTHER PERIOD OF 30 DAYS AND DUE NOTI CE OF THE DAY SO FIXED SHALL BE GIVEN ON THE NOTICE BOARD. 8. QUITE CLEARLY, ORDINARILY THE ORDER ON AN APPE AL SHOULD BE PRONOUNCED BY THE BENCH WITHIN NO MORE THAN 90 DAYS FROM THE D ATE OF CONCLUDING THE HEARING. IT IS, HOWEVER, IMPORTANT TO NOTE THAT THE EXPRESSION ORDINARILY HAS BEEN USED IN THE SAID RULE ITSELF. THIS RULE WAS I NSERTED AS A RESULT OF DIRECTIONS OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF SHIVSAGAR VEG RESTAURANT VS ACIT [(2009) 317 ITR 433 (BOM)] WHEREIN THEIR L ORDSHIPS HAD, INTER ALIA, DIRECTED THAT WE, THEREFORE, DIRECT THE PRES IDENT OF THE APPELLATE TRIBUNAL TO FRAME AND LAY DOWN THE GUIDELINES IN THE SIMILAR LINES AS ARE LAID DOWN BY THE APEX COURT IN THE CASE OF ANIL RAI (SUPRA) AND TO ISSUE APPROPRIATE ADMINISTRATIVE DIRECTIONS TO ALL THE BENCHES OF THE TRIBUNAL IN THAT BEHALF. WE HOPE AND TRUST THAT SUITABLE GUIDELINES SHALL BE FR AMED AND ISSUED BY THE PRESIDENT OF THE APPELLATE TRIBUNAL WITHIN SHORTEST REASONABLE TIME AND FOLLOWED STRICTLY BY ALL THE BENCHES OF THE TRIBUNA L. IN THE MEANWHILE(EMPHASIS, BY UNDERLINING, SUPPLIED BY US NOW), ALL THE REVISIONAL AND APPELLATE AUTHORITIES UNDER THE INCOME-TAX ACT ARE DIRECTED TO DECIDE MATTERS HEARD BY THEM WITHIN A PERIOD OF THREE MONT HS FROM THE DATE CASE IS CLOSED FOR JUDGMENT. IN THE RULED SO FRAMED, AS A RESULT OF THESE DIRECTIONS, THE EXPRESSION ORDINARILY HAS BEEN INSERTED IN TH E REQUIREMENT TO PRONOUNCE THE ORDER WITHIN A PERIOD OF 90 DAYS. THE QUESTION THEN ARISES WHETHER THE ITA NO.64/AHD/2018 RAMESH GOVINDBHAI PATEL VS. ITO ASST.YEAR 2011-12 - 15 - PASSING OF THIS ORDER, BEYOND NINETY DAYS, WAS NECE SSITATED BY ANY EXTRAORDINARY CIRCUMSTANCES. 9. LET US IN THIS LIGHT REVERT TO THE PREVAILING SI TUATION IN THE COUNTRY. ON 24TH MARCH, 2020, HONBLE PRIME MINISTER OF INDIA T OOK THE BOLD STEP OF IMPOSING A NATIONWIDE LOCKDOWN, FOR 21 DAYS, TO PRE VENT SPREAD OF COVID 19 EPIDEMIC, AND THIS LOCKDOWN WAS EXTENDED FROM TIME TO TIME. AS A MATTER OF FACT, EVEN BEFORE THIS FORMAL NATIONWIDE LOCKDOWN, THE FUNCTIONING OF THE INCOME TAX APPELLATE TRIBUNAL AT MUMBAI WAS SEVEREL Y RESTRICTED ON ACCOUNT OF LOCKDOWN BY THE MAHARASHTRA GOVERNMENT, AND ON A CCOUNT OF STRICT ENFORCEMENT OF HEALTH ADVISORIES WITH A VIEW OF CHE CKING SPREAD OF COVID 19. THE EPIDEMIC SITUATION IN MUMBAI BEING GRAVE, THERE WAS NOT MUCH OF A RELAXATION IN SUBSEQUENT LOCKDOWNS ALSO. IN ANY CAS E, THERE WAS UNPRECEDENTED DISRUPTION OF JUDICIAL WOK ALL OVER THE COUNTRY. AS A MATTER OF FACT, IT HAS BEEN SUCH AN UNPRECEDENTED SITUATION, CAUSING DISRUPTION IN THE FUNCTIONING OF JUDICIAL MACHINERY, THAT HONBLE SUPREME COURT OF I NDIA, IN AN UNPRECEDENTED ORDER IN THE HISTORY OF INDIA AND VIDE ORDER DATED 6.5.2020 READ WITH ORDER DATED 23.3.2020, EXTENDED THE LIMITATION TO EXCLUDE NOT ONLY THIS LOCKDOWN PERIOD BUT ALSO A FEW MORE DAYS PRIOR TO, AND AFTER , THE LOCKDOWN BY OBSERVING THAT IN CASE THE LIMITATION HAS EXPIRED AFTER 15.0 3.2020 THEN THE PERIOD FROM 15.03.2020 TILL THE DATE ON WHICH THE LOCKDOWN IS L IFTED IN THE JURISDICTIONAL AREA WHERE THE DISPUTE LIES OR WHERE THE CAUSE OF A CTION ARISES SHALL BE EXTENDED FOR A PERIOD OF 15DAYS AFTER THE LIFTING O F LOCKDOWN. HONBLE BOMBAY HIGH COURT, IN AN ORDER DATED 15TH APRIL 202 0, HAS, BESIDES EXTENDING THE VALIDITY OF ALL INTERIM ORDERS, HAS ALSO OBSERV ED THAT, IT IS ALSO CLARIFIED THAT WHILE CALCULATING TIME FOR DISPOSAL OF MATTERS MADE TIME-BOUND BY THIS COURT, THE PERIOD FOR WHICH THE ORDER DATED 26TH MARCH 202 0 CONTINUES TO OPERATE ITA NO.64/AHD/2018 RAMESH GOVINDBHAI PATEL VS. ITO ASST.YEAR 2011-12 - 16 - SHALL BE ADDED AND TIME SHALL STAND EXTENDED ACCORD INGLY, AND ALSO OBSERVED THAT ARRANGEMENT CONTINUED BY AN ORDER DATED 26TH MARCH 2020 TILL 30TH APRIL 2020 SHALL CONTINUE FURTHER TILL 15TH JUNE 2020. IT HAS BEEN AN UNPRECEDENTED SITUATION NOT ONLY IN INDIA BUT ALL OVER THE WORLD. GOVERNMENT OF INDIA HAS, VIDE NOTIFICATION DATED 19TH FEBRUARY 2020, TAKEN T HE STAND THAT, THE CORONA VIRUS SHOULD BE CONSIDERED A CASE OF NATURAL CALAM ITY AND FMC (I.E. FORCE MAJEURE CLAUSE) MAY BE INVOKED, WHEREVER CONSIDERED APPROPRIATE, FOLLOWING THE DUE PROCEDURE. THE TERM FORCE MAJEURE HAS BEEN DEFINED IN BLACKS LAW DICTIONARY, AS AN EVENT OR EFFECT THAT CAN BE NEITHER ANTICIPATED NOR CONTROLLED WHEN SUCH IS THE POSITION, AND IT IS OF FICIALLY SO NOTIFIED BY THE GOVERNMENT OF INDIA AND THE COVID-19 EPIDEMIC HAS B EEN NOTIFIED AS A DISASTER UNDER THE NATIONAL DISASTER MANAGEMENT ACT, 2005, A ND ALSO IN THE LIGHT OF THE DISCUSSIONS ABOVE, THE PERIOD DURING WHICH LOCKDOWN WAS IN FORCE CAN BE ANYTHING BUT AN ORDINARY PERIOD. 10. IN THE LIGHT OF THE ABOVE DISCUSSIONS, WE ARE OF THE CONSIDERED VIEW THAT RATHER THAN TAKING A PEDANTIC VIEW OF THE RULE REQU IRING PRONOUNCEMENT OF ORDERS WITHIN 90 DAYS, DISREGARDING THE IMPORTANT F ACT THAT THE ENTIRE COUNTRY WAS IN LOCKDOWN, WE SHOULD COMPUTE THE PERIOD OF 90 DAYS BY EXCLUDING AT LEAST THE PERIOD DURING WHICH THE LOCKDOWN WAS IN F ORCE. WE MUST FACTOR GROUND REALITIES IN MIND WHILE INTERPRETING THE TIM E LIMIT FOR THE PRONOUNCEMENT OF THE ORDER. LAW IS NOT BROODING OMN IPOTENCE IN THE SKY. IT IS A PRAGMATIC TOOL OF THE SOCIAL ORDER. THE TENETS OF LAW BEING ENACTED ON THE BASIS OF PRAGMATISM, AND THAT IS HOW THE LAW IS REQ UIRED TO INTERPRETED. THE INTERPRETATION SO ASSIGNED BY US IS NOT ONLY IN CON SONANCE WITH THE LETTER AND SPIRIT OF RULE 34(5) BUT IS ALSO A PRAGMATIC APPROA CH AT A TIME WHEN A DISASTER, NOTIFIED UNDER THE DISASTER MANAGEMENT ACT 2005, IS CAUSING UNPRECEDENTED ITA NO.64/AHD/2018 RAMESH GOVINDBHAI PATEL VS. ITO ASST.YEAR 2011-12 - 17 - DISRUPTION IN THE FUNCTIONING OF OUR JUSTICE DELIVE RY SYSTEM. UNDOUBTEDLY, IN THE CASE OF OTTERS CLUB VS DIT [(2017) 392 ITR 244 (BOM)], HONBLE BOMBAY HIGH COURT DID NOT APPROVE AN ORDER BEING PASSED BY THE TRIBUNAL BEYOND A PERIOD OF 90 DAYS, BUT THEN IN THE PRESENT SITUATIO N HONBLE BOMBAY HIGH COURT ITSELF HAS, VIDE JUDGMENT DATED 15TH APRIL 20 20, HELD THAT DIRECTED WHILE CALCULATING THE TIME FOR DISPOSAL OF MATTERS MADE TIME-BOUND BY THIS COURT, THE PERIOD FOR WHICH THE ORDER DATED 26TH MARCH 2020 CONTINUES TO OPERATE SHALL BE ADDED AND TIME SHALL STAND EXTE NDED ACCORDINGLY. THE EXTRAORDINARY STEPS TAKEN SUO MOTU BY HONBLE JURIS DICTIONAL HIGH COURT AND HONBLE SUPREME COURT ALSO INDICATE THAT THIS PERIO D OF LOCKDOWN CANNOT BE TREATED AS AN ORDINARY PERIOD DURING WHICH THE NORM AL TIME LIMITS ARE TO REMAIN IN FORCE. IN OUR CONSIDERED VIEW, EVEN WITHOUT THE WORDS ORDINARILY, IN THE LIGHT OF THE ABOVE ANALYSIS OF THE LEGAL POSITION, THE PERIOD DURING WHICH LOCKOUT WAS IN FORCE IS TO EXCLUDED FOR THE PURPOSE OF TIME LIMITS SET OUT IN RULE 34(5) OF THE APPELLATE TRIBUNAL RULES, 1963. VIEWED THUS, THE EXCEPTION, TO 90-DAY TIME-LIMIT FOR PRONOUNCEMENT OF ORDERS, INHE RENT IN RULE 34(5)(C), WITH RESPECT TO THE PRONOUNCEMENT OF ORDERS WITHIN NINET Y DAYS, CLEARLY COMES INTO PLAY IN THE PRESENT CASE. OF COURSE, THERE IS NO, A ND THERE CANNOT BE ANY, BAR ON THE DISCRETION OF THE BENCHES TO RE-FIX THE MATTERS FOR CLARIFICATIONS BECAUSE OF CONSIDERABLE TIME LAG BETWEEN THE POINT OF TIME WHE N THE HEARING IS CONCLUDED AND THE POINT OF TIME WHEN THE ORDER THEREON IS BEI NG FINALIZED, BUT THEN, IN OUR CONSIDERED VIEW, NO SUCH EXERCISE WAS REQUIRED TO B E CARRIED OUT ON THE FACTS OF THIS CASE. 14. ON THE BASIS OF THE OBSERVATION MADE IN THE AFO RESAID JUDGMENT WE EXCLUDE THE PERIOD OF LOCKDOWN WHILE COMPUTING THE LIMITATION PROVIDED UNDER ITA NO.64/AHD/2018 RAMESH GOVINDBHAI PATEL VS. ITO ASST.YEAR 2011-12 - 18 - RULE 34(5) OF THE INCOME TAX (APPELLATE TRIBUNAL) R ULE 1963. ORDER IS, THUS, PRONOUNCED IN THE OPEN COURT. 15. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. THIS ORDER PRONOUNCED IN OPEN COURT ON 28 / 0 7 /20 20 SD/- SD/- (WASEEM AHMED) (MS. MADHUMITA ROY) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 28/07/2020 TANMAY, SR. PS TRUE COPY / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A)- 5. , ! ' , #$%% / DR, ITAT, AHMEDABAD 6. &' () / GUARD FILE. / BY ORDER, / (DY./ASSTT. REGISTRAR) !, #$ / ITAT, AHMEDABAD 1. DATE OF DICTATION 01.07.2020 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 07.07.2020 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S 23.07.2020 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 27.07.20 20 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S .07.2020 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 28.07.2020 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER