ANAND DEVELOPERS,SANGLI vs. ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE -2, SANGLI

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ITA 430/PUN/2020Status: DisposedITAT Pune29 August 2022AY 2016-174 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the difference between the DVO's valuation and the actual sale consideration was less than 10%. Relying on previous judgments, the Tribunal applied the tolerance margin retrospectively, similar to Section 50C.

What were the facts?

The assessee's appeal for AY 2016-17 challenged an addition made under Section 43CA. The actual sale consideration was Rs. 5,58,00,000, while the DVO determined it at Rs. 5,84,79,000.

What were the issues?

Whether the tolerance margin provided in Section 43CA(1) for the difference between the DVO's valuation and actual sale consideration is applicable retrospectively for AY 2016-17.

Which sections of the Income-tax Act were involved?

Section 43CA,Section 143(3),Section 50C

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, “A” BENCH, PUNE

Before: SHRI S.S.GODARA, JM & SHRI DR. DIPAK P. RIPOTE, AM

For Respondent: Shri Arvind Desai
Hearing: 21.06.2022Pronounced: 29.08.2022

आदेश / ORDER PER S. S. GODARA, JM :

1.

This assessee’s appeal for A.Y. 2016-17 is directed against the CIT(A), Pune’s order dated 04/03/2020 passed in case No. ITBA/APL/S/250/2019- 20/1026127927(1) involving proceeding u/s. 143(3) of the Income Tax Act, 1961; in short "the Act”. Case called twice. None appears on assessee’s behest. It is accordingly proceeded ex-parte. We have heard the Revenue. Case file perused.

Anand Developers,

2.

Coming to the assessee’s sole substantive grievance in the instant appeal challenging the correctness both the lower authorities action making section 43 CA addition of Rs.26,79,000 in both the lower proceedings, it inter alia emerges at the outset from a perusal of the CIT(A)’s detailed discussion that the corresponding actual sale consideration figure was Rs.5,58,00,000/-, SRO price at Rs.8,50,20,000/- and DVO had determined the sum to the tune of Rs.5,84,79,000/- ; respectively. Meaning thereby that the difference between DVO and actual rate turns out to be less than 10% as per section 43 CA(1) first proviso stipulating tolerance margin of 5% vide Finance Act, 2018 w.e.f. 01.04.2019; as increased to 10% by the Finance Act 2020 w.e.f. 01.04.2021; respectively.

Mr. Desai vehemently argued that we are in assessment year 2016-17 whereas foregoing statutory amendment(s) do not carry any retrospective effect. We find no merit in the Revenue’s instant argument as tribunal co- ordinate bench in Dharamshibhai Sonani V/s ACIT(2016) 161 ITD 627(Ahd) and Maria Fernandes Cheryl V/s. ITO (2021) 123 taxmann.com 252(Mum) hold the foregoing tolerance similar tolerance margin(s) in section 50C as carrying retrospective effect being curative in nature. We also wish to make it clear that the legislature has introduced pari materia provision both at section 43CA (2)(4) and section 50C(1) 1st and 2nd proviso, applicable in specified circumstances. We therefore hold that tribunal’s foregoing co- ordinate benches’ decisions very much apply in the facts of the instant case as well where the differential rate in actual sale consideration vis-à-vis SRO

Anand Developers, prices is less than 10% (supra) u/s. 43CA(1) 1st proviso The assessee succeeds in his sole substantive ground in very terms.

3.

This assessee’s appeal is allowed.

Order pronounced in the Open Court on this 29th day of August, 2022.

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