ANUPAMA KRISHNA RAO PEMMARAJU,HYDERABAD vs. ITO, (INT TAXN)-1, HYDERABAD

आयकर अपील�य अ�धकरण, हैदराबाद पीठ IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘ B ‘ Bench, Hyderabad Before Shri R.K. Panda, Vice-President AND Shri K. Narasimha Chary, Judicial Member Assessment Year: 2013-14 Smt. Anupama Krishna Vs. Income Tax Officer Rao Premaraju (International Taxation)-1 Hyderabad Hyderabad PAN:GCZPP2622A (Appellant) (Respondent) Assessee by: Shri K.A. Sai Prasad, CA Revenue by: Shri K Madhusudan, CIT(DR) Date of hearing: 29/08/2023 Date of pronouncement: 31/08/2023 ORDER

Per R.K. Panda, Vice-President

ITA 138 of 2023 Anupama Krishna Raju Premaraju Subsequently, notices issued by the Assessing Officer u/s 142(1) also remained uncompiled with. In view of the above the Assessing Officer proceeded to complete the assessment u/s 147 r.w.s. 144 of the I.T. Act.

ITA 138 of 2023 Anupama Krishna Raju Premaraju and the SRO value is Rs.1,07,93,300/-, the Assessing Officer invoked the provisions of section 50C and determined the assessee’s share being 50% of the SRO value at Rs.53,96,650/- which is thedeemed sale consideration in the hands of the assessee for the purpose of capital gain computation. In absence of any compliance from the side of the assessee, the Assessing Officer completed the assessment u/s 144 r.w.s. 147 of the Act determining the long- term capital gain in the hands of the assessee at Rs.41,35,125/-.

4. Since the assessee is an NRI and as per the provisions of section 144C(15), the Assessing Officer issued a draft assessment order. The assessee filed objections before the DRP vide application dated 19.5.2022. However, the DRP upheld the proposed addition made by the Assessing Officer but gave direction to the Assessing Officer to allow indexed cost of acquisition while computing the capital gains. The Assessing Officer accordingly, after allowing the indexed cost of acquisition, made addition of Rs.27,86,328/- in the hands of the assessee.

5. Aggrieved with such order of the learned CIT (A) the assessee is in appeal before the Tribunal by raising the following grounds: “

1. The direction of the Ld.DRP-1 and order of the assessing officer dated 28-01 2023are erroneous, and contrary to the law and facts of the case.

2. The order passed by the learned A.O. u/s 147 rws 144 of the Income tax Act, 1961 is bad in law since the order in pursuance to DRP directions u/s 144C(5) is not passed u/s 144C (13).

3. The learned DRP-1 failed to appreciate the fact that the transfer of the property got concluded in the previous year relevant to AY 2007-08 itself when the agreement of sale was executed by the appellant's father on 15.06.2006 and ITA 138 of 2023 Anupama Krishna Raju Premaraju handed over the possession after receiving the entire consideration of which over 90% is through banking channels.

6. The appellant craves leave to add amend or alter any of the above grounds at the time of hearing of the appeal.”

6.1 Referring to the copy of the Bank Statement along with the original sale deed, the learned Counsel for the assessee submitted that the cheques were issued originally on 15.06.2006, 15.09.2006 and 15.09.2006 as per the details given below: a) Rs. 2,00,000/- (Rupees Two Lakhs only) by way of Cheque bearing No. 372562,dated 15.08.2006 drawn on The Karur Vysya Bank Limited, R.P, Road Branch, Secunderabad; Page 4 of 11

ITA 138 of 2023 Anupama Krishna Raju Premaraju b) Rs. 9,00,00O/- (Rupees Nine Lakhs only) by way of Cheque bearing No. 372563, dated 15.09.2006 drawn on The Karur Vysya Bank Limited, R.P. Road Branch, Secunderabad; c) Rs. 9,00,000/- (Rupees Nine Lakhs only) by way of Cheque bearing No. 372564, dated 15.09.2006 drawn on The Karur Vysya Bank Limited, R.P. Road Branch, Secunderabad; 6.1.1 He submitted that the above amounts were credited to the Bank Account and the cheques have been duly cleared and reflected in the bank account of the assessee.

6.2 Referring to the provisions of section 50C(1) he submitted that where the date of 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 Valuation Authority on the date of agreement should be taken as the value. He submitted that in the present case the correct value that has to be adopted is the rate applicable on the date of agreement as against the date of actual sale. Referring to various decisions including the decision of the Hon'ble Madras High Court in the case of CIT vs. Shri Vummundi Amarendran vide TCA No.329 of 2020 order dated 28.9.2020 and the decision of the Delhi Bench of the Tribunal in the case of Amit Bansal vs. ACIT reported in (2019) 174 ITD 349 (Del.), he submitted that the amendment to section 50C(1) introduced by the Finance Act 2015 for determining the full value of consideration is curative in nature and will apply retrospectively.

ITA 138 of 2023 Anupama Krishna Raju Premaraju 6.3 The learned Counsel for the assessee also relied on the following decisions: a) Mumbai Bench of the Tribunal in the case of Maria Fernandes Cheryl vs. Income Tax Officer (International Taxation) (2021) 123 taxmann.com 252. b) Delhi Bench of the Tribunal in the case of Amrapali Cinema vs. ACIT (2021) 127 taxmann.com 376. c) Ahmedabad Bench of the Tribunal in the case of Ramesh Govindbhai Patel vs. Income Tax Officer (2020) 118 Taxmann.com 201.

ITA 138 of 2023 Anupama Krishna Raju Premaraju allowed indexed cost of acquisition due to non-availability of details, the DRP vide order dated 12.12.2022 directed the Assessing Officer to give relief by way of computing the capital gain. It is the submission of the learned Counsel for the assessee that since the property was agreed to be sold for a consideration of Rs.22.00 lakhs as per agreement dated 15.06.2006 and the assessee has received the consideration vide cheques dated 15.06.2006 and 15.09.2006 respectively which is also mentioned in the final sale deed, therefore, the value adopted or assessed or assessable by the Stamp Valuation Authority on the date of agreement has to be taken. It is his submission that the provisions of section 50C(1) inserted by the Finance Act, 2016 w.e.f. 1.4.2017 was curative in nature and will apply retrospectively.

Provided that where the date of 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 valuation authority on the date of agreement may be taken for the purposes of computing 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 electronic clearing system through a bank account (or through such other electronic mode as may be prescribed on or before the date of the agreement for transfer.

ITA 138 of 2023 Anupama Krishna Raju Premaraju

Provided also that where the value adopted or assessed or assessable by the stamp valuation authority does not exceed one hundred and ten per cent of the consideration received or accruing as a result of the transfer, the consideration so received or accruing as a result of the transfer shall, for the purposes of section 48 be deemed to be the full value of the consideration.”

ITA 138 of 2023 Anupama Krishna Raju Premaraju

7. I have considered the rival submissions and perused the orders of the authorities below. The undisputed facts in the instant case are that the assessee has purchased the property jointly with Shri Vikas Bansal on 28th July, 2010 for a consideration of Rs.39,33,600/- which was sold on 22nd July, 2011 for a net consideration of Rs.42 lakhs. The assessee had entered into an agreement to sell the property on 25th March, 2011 and taken the part payment of Rs.10 lakhs. It is also an admitted fact that there is no registered conveyance deed. We find the Assessing Officer, relying on the provisions of section 53A and the provisions of section 2(47)(v) of the IT Act, treated the property as a capital asset and treated the profit from sale of such property as short- term capital gain in the hands of the assessee. Further, the Assessing Officer has also invoked the provisions of section 50C and adopted the circle rate of the property as on 22nd July, 2011 at Rs.16,000/- per sq. yard as against the circle rate of 11,000/- as on 25th March, 2011 contended by the assessee and calculated the full value of the consideration at Rs.57,21,600/- as against the actual sale consideration of Rs.42 lakhs. Accordingly, the Assessing Officer made an addition of Rs.7,60,800/- in the hands of the assessee which has been upheld by the CIT(A). It is the submission of the ld. counsel for the assessee that in view of the proviso to section 50C(1) of the IT Act 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 valuation authority on the date of agreement may be taken and, thus, the assessee has correctly adopted the rates applicable on the date of the agreement as against the date of actual sale. We find the proviso to section 50C(1) read as under:-

50C. (1) 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 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 : [Provided 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 valuation authority on the date of agreement may be taken for the purposes of computing full value of consideration for such transfer:"

8. The above proviso was inserted by the Finance Act, 2016 w.e.f. 01.04.2017. Therefore, the question that has to be decided is as to whether the above amendment is prospective in nature i.e., will be applicable from A.Y. 2017-18 or is retrospective in nature being curative in nature. We find identical issue had come up before the Ahmedabad Bench of the Tribunal in the case of Dharamshibhai Sonani versus ACIT (supra) where it has been held that amendment to section 50C introduced by the Finance Act, 2016 for determining full value of consideration in the case of involved property is curative in nature and will apply retrospectively. We find following the above decision, the Ahmedabad Bench of the Tribunal in the case of Rahul G. Patel (Supra), held that the proviso to section 50C(1) introduced by the Finance Act, 2016 can be construed as clarificatory in nature and can be applied on pending matters. The various other decisions relied on by the ld. counsel for the assessee also support the case of the assessee that where the date of the agreement fixing the amount of consideration and the date of registration regarding the transfer of the capital asset in question are not the ITA No.3974/Del/2018 same, the value adopted or assessed or assessable by the stamp valuation authority on the date of the agreement is to be taken for the purpose of full value of consideration. I, therefore, accept the argument of the ld. counsel for the assessee in principle and restore the issue to the file Page 9 of 11

ITA 138 of 2023 Anupama Krishna Raju Premaraju of the Assessing Officer with a direction to verify necessary facts and decide the issue in the light of my above observation directing to adopt the circle rate on the date of agreement to sell in order to compute the consequential capital gain.”

Order pronounced in the Open Court on 31st August, 2023.