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Income Tax Appellate Tribunal, SURAT BENCH, SURAT
Before: SHRI C.M.GARG & SHRI O.P.MEENA
आदेश /O R D E R PER O. P. MEENA, ACCOUTANT MEMBER: This appeal by the Assessee is directed against the order of learned Commissioner of Income tax (Appeals)-3; Surat (in short “the CIT (A)”) dated 26.08.2016 for the Assessment Year 2012-13. 2. The sole ground of appeal states that Ld. CIT (A) erred in confirming addition of Rs. 20,07,145 made by invoking provision of section 50C of the Act. 3. The learned Authorized Representative (the ld. A.R.) of the assessee submitted that the assessee has sold a residential house as per agreement to sale dated 04.07.2010 for total consideration of Rs.35 lakhs of which Jantri value was at Rs. 23,73,710 at the time of agreement to sale and two cheques of Rs.
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1,50,000 each dtd. 06.07.2010 were received. It was also stated that sale deed was registered on 10.08.2011 and that total five cheques including two mentioned in the agreement, totaling to Rs.7 lakhs were received before 06.04.2011 and rest of cheques of Rs.28 lakhs were received on 09.08.2011. It was therefore, argued that the AO has wrongly considered the stamp duty valuation at Rs.55,07,145 on the date of registration of sale deed as against the fair market value of Rs.35 Lakh as mentioned in agreement to sale dtd. 04.07.2010 by the assessee and stamp duty valuation at Rs.23,73,710 as on the date of agreement to sale dtd. 04.07.2010 as the stamp duty has been revised with effect from 18.04.2011. The ld. A.R. submitted that the provisions of section 56(2)(vii) has specifically provided that where the agreement for fixing the amount of consideration for the transfer of property and the date of registration are not the same, the stamp value on the date of the agreement may be taken for the purpose of this sub-clause. It is also provided further that the said provisions shall apply only in a case where the amount of consideration referred to therein, or a part thereof, has been paid by any mode other than cash on or before the date of the agreement for the transfer of such immovable property. Similarly, other provisions of section 43CA are also have same effect. Thus, the provision of section 56 and 43CA are on the same line as the provisions of section 50C and also in the matter under consideration, part payment are made at the time of agreement to sale and amount of Rs. 7 Lakh has been paid before 06.04.2011 and last payment of Rs. 28 letter was received on 09.08.2011 after approval of Housing bank loan to the purchaser. The ld. A.R. submitted that the amendment
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by insertion of proviso to section 50C of the Act, by Finance Act 2016 has been made with effect from 01.04.2017 wherein it has been provided that stamp duty assessed or assessable on the date of the agreement for the purpose of computing to value of consideration, or part thereof has been received by account payee cheque or by bank draft order or by use of electronic system through a bank account, on or before the date of the agreement for transfer would be deemed to be sale consideration for that property sold. In the case of the assessee, a sum Rs. 3 lakh has been received on the date of the agreement by way of cheque, therefore, the fair market value available as on the date of agreement is to be adopted for the purpose of section 50C(1) of the Act. Though the proviso is inserted with effect from 01.04.2017 but same is applicable retrospective as held by Co-ordinate Bench of Ahmedabad tribunal in the case of Dharamsibhai Sonani v ACIT [2016] 161 ITD 627(Ahmedabad) wherein it has been held that the proviso to section 50C has a retrospective effect from 01.04.2003, hence, it was urged upon us that said proviso is applicable to the present case. The ld. A.R. further submitted that this decision has been followed by division bench of Ahmedabad tribunal in the case of Hansaben Bhaulabhai Parajapati v. ITO [2017] 51 CCH 289 Ahd-Trib wherein it was held that where date of agreement fixing amount of consideration and date of registration regarding transfer of capital asset in question not same, value adopted or assessed or assessable by Stamp Valuation authority on date of agreement has to be taken for the purpose of full value of consideration if payments are received by account payee cheques.
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Per contra, the learned Departmental Representative (the ld. D.R.) vehemently relied on the orders of lower authorities and submitted that proviso to section 50C is not retrospective as the effective date is clearly mentioned in the said proviso. Therefore, same cannot be applied to the facts of the case of the assessee. 5. We have heard the rival submissions and perused the relevant material on record. We observe that agreement to sale was made on 04.07.2010 and two cheques of Rs.1,50,000 each dtd. 6.7.2010 as mentioned in agreement to sale and further two cheques of Rs. 1.50 Lakh each dtd. 22.3.2011 and cheque of Rs. 1 Lakh were received on or before 06.04.2011as part payment and balance amount of Rs. 28 Lakh was received by cheque on the date of execution of registered sale deed dtd. 10.08.2011. The amendment made by insertion of proviso to section 50C of the Act, by Finance Act 2016 has been made with effect from 01.04.2017 wherein it has been provided that stamp duty assessed or assessable on the date of the agreement for the purpose of computing to value of consideration, or part thereof has been received by account payee cheque or by bank draft order or by use of electronic system through a bank account, on or before the date of the agreement for transfer would be deemed to be sale consideration for that property sold. In the case of the assessee, a sum Rs. 3 lakh has been received on the date of the agreement by way of cheque, therefore, the fair market value available as on the date of agreement or stamp duty value on the date of agreement to sale whichever is higher is to be adopted for the purpose of section 50C(1) of the Act. Though the proviso has been inserted with effect
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from 01.04.2017 but same being clarificatory in nature is applicable retrospective in nature as held by Co-ordinate Bench of Ahmedabad tribunal in the case of Dharamsibhai Sonani v ACIT [2016] 161 ITD 627 (Ahmedabad- Trib) wherein it has been held that the proviso to section 50C has a retrospective effect from 01.04.2003, hence, the said proviso is applicable to the present case. This decision of Ahmedabad tribunal was further followed by Ahmedabad Tribunal in the case of Hansaben Bhaulabhai Parajapati v. ITO [2017] 51 CCH 289 Ahd-Trib wherein it was held that where date of agreement fixing amount of consideration and date of registration regarding transfer of capital asset in question not same, value adopted or assessed or assessable by Stamp Valuation authority on date of agreement has to be taken for the purpose of full value of consideration if payments are received by account payee cheques. Since, in the case in hands, the assessee has received part payment of Rs. 7 by cheques as per agreement to sale dtd. 04.07.2010 as against registration of sale deed dtd. 10.08.2011. In view of this matter, we find that stamp duty valuation as on 04.07.2010 has to be considered for the purpose of section 50C of the Act if provision of section 50C are to be invoked. Since, the stamp duty value of property sold were at Rs.23,73,710 as against sale consideration of Rs.35 lakhs as shown in the agreement to sale dtd. 04.07.2010 and in fact received by the assessee. Therefore, sale consideration at Rs. 35 Lakh being more than stamp duty value as on date of agreement to sale would be considered for computation of gains if any. Accordingly, the addition of Rs. 20,07,145 made by the AO is therefore, directed to be deleted. This view is further supported by the provision
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of section 56(2)(vii) has specifically provided that where the agreement for fixing the amount of consideration for the transfer of property and the date of registration are not the same, the stamp value on the date of the agreement may be taken for the purpose of this sub-clause. It has been also provided further that the said provisions shall apply only in a case where the amount of consideration referred to therein, or a part thereof, has been paid by any mode other than cash on or before the date of the agreement for the transfer of such immovable property. Similarly, other provisions of section 43CA are also have same effect. In the light of above backdrop, the addition of Rs. 20,07,145 made by the AO is deleted. Accordingly, this ground of appeal is allowed. 6. In the result, the appeal of the assessee stands allowed. 7. Order pronounced in the open court on 21.08.2018 Sd/- Sd/- (सी.एम.गग� /C.M. GARG) (ओ.पी.मीना/O.P.MEENA) �याियकसद�यतथा/JUDICIAL MEMBER लेखासद�यकेसम� /ACCOUNTANT MEMBER सुरत Dated: 21.08.2018 आदेश क� �ितिलिप अ�ेिषत/Copy of the Order is forwarded to : 1.अपीलाथ�/ The Appellant; 2. ��यथ�/ The Respondent; 3. आयकरआयु� (अपील) The CIT(A)4.आयकरआयु� / Pr. CIT 5.िवभागीय�ितिनिध, आयकरअपीलीयअिधकरण/D.R. (ITAT) 6. गाड�फाईल / Guard file ITAT. By order / / TRUE COPY / / Assistant Registrar, Surat