NABHIRAJ RATNA BALRAJ BY LEGAL HEIR B.R.RAKESH,BANGALORE vs. INCOME-TAX OFFICER, WARD-7(2)(1), BANGALORE

4. In any case, the authorities below have erred in not appreciating the fact that the difference between the guidance value and sale consideration is within the 10% of tolerance limit as prescribed in third proviso to section 50C of the Act which is retrospective in nature. On the facts and circumstances of the case and the law applicable, the leeway of 10% is applicable to the case of appellant hence the addition as made/confirmed being erroneous is to be deleted in entirety.

5. The appellant denies liability to pay Interest U/s. 234B and 234C of I.T. Act, 1961. The interest having been levied erroneously is to be deleted.

6. In view of the above and on other grounds to be adduced at the time of hearing, it is requested that the orders passed be quashed or atleast, the addition made u/s 50C of the Act be deleted, returned income be accepted and the interest levied be also deleted.”

3. On appeal, the CIT(Appeals) also dismissed the appeal of the assessee. Against this, the assessee is in appeal before the ITAT.

4. The ld. AR reiterated the submissions made before the lower authorities and she pressed ground No.4 and submitted as under:-

“ 1. The appellant, an Individual, Sri B. N. Ratna Balraj expired on 16.09.2023. A copy of the Death certificate is filed before the learned CIT(Appeals), NFAC, Delhi vide a separate submission dated 15.01.2024. In this scenario, Sri B. R. Rakesh, one of the legal heirs is filing this submission on behalf of the deceased.

2. The year under appeal is assessment year 2016-17.

b) In response to the above letter dated 30.06.2021, the appellant manually filed a letter dated 01.07.2021 on 07.07.2021 vide acknowledgement no. 222262110010 with ITO, Ward- 7(2)(1), Bangalore stating the fact that the appellant had already uploaded the return of income electronically in response to notice u/s 148 on 17.04.2021 and that this return was filed in response to notice issued u/s 148 dated 31.03.2021. c) Further, the appellant requested that in the light of dictum of Supreme Court, the appellant may kindly be given: 1) A copy of the reasons if any recorded for the issue of notice u/s. 148 of the Act. 2) Copy of the satisfaction obtained from the Range -7(1), Bangalore (as noted in the notice issued u/s 148). d) The appellant has not been provided the reasons for reopening, though the appellant in its letter filed against the issue of notice u/s. 148, requested for a copy. e) The Supreme Court in G. K. N. Driveshafts [2003] 259 ITR 19 had specifically directed that when a notice under section 148 of the said Act is issued and the noticee files a return and seeks reasons for the issuance of the notice, the Assessing Officer is bound to furnish reasons within a reasonable time. On receipt of the reasons, the noticee is entitled to file objections to the issuance of notice and the Assessing Officer is bound to dispose of the same by passing a speaking order. These are specific directions given by the Supreme Court in all cases where notices under section 148 of the said Act are issued. f) Reliance is also placed on the decisions rendered in the following cases: • PCIT vs V. Ramaiah, 103 taxmann.com 201 (Kar) • PCIT vs V. Ramaiah, 103 taxmann.com 202 (SC) SLP dismissed • CIT vs Trend Electronics (Bom) of 2013 • PCIT vs Samcor Glass Ltd. & Anr (Delhi HC) g) The assessing officer having not followed the procedure laid down by the Supreme Court, makes the order passed bad in law and hence the order as passed is required to be quashed.

b) Against this order dated 21.03.2022, the appeal is filed by the appellant.

(3) Subject to the provisions contained in sub-section (2), where the value ascertained under sub-section (2) exceeds the value adopted or assessed or assessable by the stamp valuation authority referred to in sub-section (1), the value so adopted or assessed or assessable by such authority shall be taken as the full value of the consideration received or accruing as a result of the transfer.

a) Kodani Satya Srinivas Vijayawada v. ACIT (ITAT – Visakhapatnam) [ITA No. 556 & 557/Vizag/2008; AY : 2006-07; Date of order: 2.7.2010] b) Lahiri Promoters v. ACIT (ITAT-Visakhapatnam) [ITA No. 12/Vizag/2009; AY : 2006-07; Date of order: 22.6.2010] c) ITO v. Modipon Ltd. (ITAT – Delhi) [ITA No. 2049/Del/2009; AY:2005-06; Date of order: 9.1.2015] d) Mohd. Imraan Baug v. ITO (ITAT – Hyderabad) [ITA No. 1942/Hyd/2014; AY : 2006-07; Date of order: 27.11.2015] e) Moole Rami Reddy v. ITO (ITAT-Visakhapatnam) [ITA No.311/Vizag/ 2010; AY : 2006-07; Date of order: 10.12.2010] f) Parekh Marketing Ltd. v. ACIT (ITAT-Mumbai) [ITA No.4307/Mum/2013; AY : 2008-09; Date of order: 26.5.2015] 3. Insertion of 2 provisos to Section 50C by Finance Act, 2016 The Finance Act, 2016 has amended the provisions of section 50C of the Act by inserting the following two provisos with effect from 1.4.2017– “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. 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, on or before the date of the agreement for transfer.”

Rationalization of Section 50C in case sale consideration is fixed under agreement executed prior to the date of registration of immovable property. Under the existing provisions contained in Section 50C, in case of transfer of a capital asset being land or building or both, the value adopted or 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 capital gains. The Income Tax Simplification Committee (Easwar Committee) has in its report, pointed out that this provision does not provide any relief where the seller has entered into an agreement to sell the property much before the actual date of transfer of the immovable property and the sale consideration is fixed 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 amend 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 may be taken for the purposes of computing the full value of consideration. It is further proposed to provide that this provision shall apply only in a case where the amount 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 clearing system through a bank account, on or before the date of the agreement for the transfer of such immovable property. These amendments are proposed to be made effective from the 1st day of April, 2017 and shall accordingly apply to assessment year 2017-18 and subsequent years.

The amendment in Section 50C was brought in to provide relief to the assessee in a situation in which the stamp duty valuation of a property has risen between the date of execution of agreement to sell and execution of sale deed, as is the norm rather than exception, but the real estate market is now traversing through a difficult phase and there can be situations in which there is a fall in the stamp duty valuation rates with the passage of time. Such a situation has actually arisen in many places in the country, such as in Gurgaon, New Delhi and even in Dehradun (Uttarakhand) and some other places. It is therefore possible that, at first sight, first proviso to Section 50C may seem to work to the disadvantage of the assessee in certain situation in the event of the word `may’ being construed as mandatory in application, but then one cannot be oblivious to the fact that this proviso states that 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 (emphasis supplied) making it clearly optional to the assessee and that in any event, what has been brought by the lawmakers as a measure of relief to the taxpayers cannot be construed as resulting in a higher tax burden on the tax payers. Of course, assuming my understanding of this statutory provision is in harmony with the legislative intention, insertion of the words “at the option of the assessee” between ‘stamp valuation authority on the date of agreement may” and “be taken for the purposes of computing full value of consideration for such transfer”, in the first proviso to Section 50C(1) could have made the legal provision even more unambiguous.

Illustration Particulars Situation 1 Situation 2 Consideration as per agreement of transfer 10,000 10,000 Stamp duty value 12,000 10,400 Stamp duty value as a percentage of declared 120% 104% consideration Whether stamp duty value exceeds 105% of consideration Yes No as per agreement of transfer Consideration for computing capital gains 12,000 10,000 d) Why the Safe Harbour Limit of 10% Should be Retrospective? Legal maxim 'Law Prospicit Non Respicit' presumes law to be prospective & not retrospective. However, where the legislation is enacted with a purpose of mitigating undue hardship the provision in such a case has to be given a reasonable & equitable construction & has to be considered to be retrospective in nature so as to make the provisions workable. The rule of beneficial construction should apply in such a case. Hon. Apex Court has followed reasonable construction instead of strict interpretation in the following cases:- 1. R.B. Jodha Mal Kuthiala vs. CIT 82 ITR 570 (SC) [1971] 2. CIT vs. J.H. Gotla 156 I.T.R. 323(SC) [1985] 3. Good Year India Ltd. vs. State of Haryana 188 ITR 402 SC [1991] e) In CIT v. Calcutta Export Company (SC) (2018) 93 taxmann.com 51. The issue before the Hon. Apex Court was whether the amendment to sec 40(a)(ia) by Finance Act 2010 can be considered to be retrospective in nature. The hon. Apex Court after considering the relevant schema of Section 40(a)(ia) & taking into consideration the purpose of the amendment was to mitigate undue hardship held the amendment to be retrospective in nature. f) Is the tolerance limit of 10% retrospective? i. Finance Act, 2018 has w.e.f. 1.4.2019 inserted third proviso to Section 50C which provides for a tolerance limit of 5% of the consideration received or accruing as a result of the transfer. ii. The limit of 5% has been increased to 10% by the Finance Act, 2020 w.e.f. 1.4.2021. iii. A question arises as to whether the tolerance limit is prospective from the date of its introduction or is retrospective? If it is retrospective, it is retrospective since when? iv. Amendment made in scheme of section 50C(1), by inserting third proviso thereto and by enhancing tolerance band for variations between stated sale consideration vis-à-vis stamp duty valuation from 5 per cent to 10 per cent are effective from date on which section 50C, itself was introduced, i.e 1-4-2003 - Maria Fernandes Cheryl v. ITO, International Taxation [(2021) 123 taxmann.com 252 (Mumbai - Trib.)] v. The Tribunal noted that – vi. Central Board of Direct Taxes circular No. 8 of 2018, explaining the reason for the insertion of the third proviso to section 50C(1), has observed that 'It has been pointed out that the variation between stamp duty 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'. vii. Once the CBDT itself accepts that these variations could be on account of a variety of factors, essentially bona fide factors, and, for this reason, section 50C(1) should not come into play, it was an 'unintended consequence' of section 50C(1) that even in such bona fide situations, this provision, which is inherently in the nature of an anti-avoidance provision, is invoked. viii. Once this situation is sought to be addressed, this situation needs to be addressed in entirety for the entire period in which such legal provisions had effect, and not for a specific time period only ix. The Tribunal observed that – x. On a conceptual note, an estimation of market price is an estimation nevertheless, even if by a statutory authority 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. The rigour of section 50C(1) was thus relaxed, and very thoughtfully so, to take these bona fide cases of small variations between the stated sale consideration vis-à-vis stamp duty valuation, out of the scope of adjustments contemplated in the computation of capital gains under this anti-avoidance provision. It is a case of a curative amendment to take care of unintended consequences of the scheme of section 50C. xi. Parliament has introduced third proviso in section 50C(1) of the Act, as per which the difference in stamp duty valuation and actual consideration should be ignored, if it is less than 5%/10%. The Kolkata Bench of Tribunal has held it to be curative in nature in the case of Chandra Prakash Jhunjhunwala [2019 (8) TMI 1192 - ITAT KOLKATA] has held that the proviso shall apply since the date of insertion of sec.50C of the Act. The Tribunal was of the view that even prior to introduction of the proviso the Tribunals were allowing a variation of upto 10%. It also noted that the amendment is procedural in nature. xii. Reliance is placed on decision rendered by Mumbai Tribunal in the case of Joseph Mudaliar v. Deputy Commissioner of Income-tax, CC-4(3), Mumbai [2021] 130 taxmann.com 250 (Mumbai - Trib.) Dated 14.09.2021 wherein it was held that Amendment made in section 50C(1) by inserting third proviso by Finance Act, 2018, with effect from 1-4-2019 is curative in nature and same would apply retrospectively. xiii. Reliance is also placed on the decision rendered by jurisdictional Bangalore ITAT and other tribunals where in it was held that Amendment made in scheme of section 50C(1), by inserting third proviso thereto and by enhancing tolerance band for variations between stated sale consideration vis-à-vis stamp duty valuation from 5 per cent to 10 per cent are effective from date on which section 50C, itself was introduced, i.e 1-4-2003. a) Sandeep Patil vs ITO in dated 09.09.2020 for AY 2016-17. (ITAT Bangalore) b) Maria Fernandes Cheryl vs ITO 123 Taxmann 252/2021/Mum dated 15.01.2021. for AY 2011-12 c) Mamatha Divakar Shetty vs ITO in dated 30.09.2021. for AY 2009-10 (ITAT Hyderbad) d) Amrapali Cinema Vs. ACIT, [2021] 127 Taxmann.com 376 (Delhi - Trib.) dated 28.04.2021 for AY 2012-13 xiv. The relevant paras of the above judgements are reproduced as follows; a) Sri Sandeep Patil, Bangalore vs Income Tax Officer, Ward- 1(3)(5) dated 9.09.2020. We also notice that the Parliament has introduced third proviso in section 50C(1) of the Act, as per which the difference in stamp duty valuation and actual consideration should be ignored, if it is less than 5%/10%. Even though the said provision has come into effect from 1.4.2019/1.4.2021, we notice that the Kolkata Bench of Tribunal has held it to be curative in nature in the case of Chandra Prakash Jhunjhunwala (supra) and accordingly held that the proviso shall apply since the date of insertion of sec.50C of the Act. Accordingly, the above said reasoning given by the Kolkata bench of ITAT also supports the contentions of the assessee. In view of the foregoing discussions, we find merit in the prayer of the assessee. We notice that the addition of Rs.15,92,800/- sustained by Ld CIT(A) works out to less than 10% of the actual consideration of Rs.2,33,00,000/- paid by the assessee. Accordingly, we modify the order passed by Ld. CIT(A) and direct the A.O. to ignore the difference between fair market value determined by CIT(A) and the actual consideration as the same is less than 10% of the actual consideration. b) Maria Fernandes Cheryl v. Income Tax Officer, (International Taxation), 2(3)(1) (ITAT Mumbai) [2021] 123 taxmann.com 252 (Mumbai - Trib.) dated 15.01.2021. Para 7 of the decision makes a reference to the Central Board of Direct Taxes (CBDT) Circular (Circular No. 8 of 2018):

“These submissions, however, do not impress us. As noted by the Central Board of Direct Taxes circular # 8 of 2018, explaining the reason for the insertion of the third proviso to Section 50C(1), has observed that "It has been pointed out that the variation between stamp duty 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". Once the CBDT itself accepts that these variations could be on account of a variety of factors, essentially bonafide factors, and, for this reason, Section 50C(1) should not come into play, it was an "unintended consequence" of Section 50(1) that even in such bonafide situations, this provision, which is inherently in the nature of an anti-avoidance provision, is invoked. Once this situation is sought to be addressed, as is the settled legal position- as we will see a little later in our analysis, this situation needs to be addressed in entirety for the entire period in which such legal provisions had effect, and not for a specific time period only. There is no good reason for holding the curative amendment to be only as prospective in effect.” 7. ………… The reasons assigned by the CBDT, i.e., "the variation between stamp duty 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- à-vis the material facts in 2003. What holds good in 2021 was also good in 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 reasons 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 variations between the stated sale consideration vis-à-vis stamp duty valuation to 10%, are curative in nature, and, therefore, these provisions, even though stated to be prospective, must be held to relate back to the date when the related statutory provision of Section 50C, i.e. 1st April 2003.

In plain words, what is means is that even if the valuation of a property, for the purpose of stamp duty valuation, is 10% more than the stated sale consideration, the stated sale consideration will be accepted at the face value and the anti-avoidance provisions under section 50C will not be invoked.

This amendment take effect as retrospective in nature and this view is supported by the decisions of the coordinate benches of ITAT, which are as under:

1.

1. Maria Fernandes Cheryl Vs. ITO, [2021] 123 Taxmann.com 252 (Mumbai -Trib.) 2. Amrapali Cinema Vs. ACIT, [2021] 127 Taxmann.com 376 (Delhi-Trib.) 9.1. The assessee in AY 2012-13, has taken the value of Rs. 9,44,98,000/- whereas Pr. CIT adopted the value of Rs. 9,75,22,000/-, which is less than 10% as per the amended provision. Considering the above judgments, we are of the view that the order passed by the AO is not erroneous and prejudicial to the interests of revenue, as held by the Pr. CIT. g) Therefore, the case of the appellant is covered by the leverage of 10% granted by the law and therefore also no additions can be made in hands of the appellant for the year.

41. In view of the above discussion, it is erroneous to conclude that since the case of the appellant is for the period before assessment year 2016-17, the difference of 5% is only to be considered. As has been held judicially and as explained above, the benefit provision of 10% differential is available even for earlier years.

42. The appellant had fully declared the capital gains as per the return of income filed u/s.139. Further there are no undisclosed transactions. The appellant had fully accounted and declared all the income including income from capital gains and no addition can be made as explained above.

43. In view of the above submissions made, as explained, there is no escapement of income.

44. In view of the above submissions made the appellant requests that the order as made be quashed or atleast all the additions made in the order be deleted and interest levied be also deleted.

5. The ld. AR also relied on Amrapali Cinema Vs. ACIT, [2021] 127 Taxmann.com 376 (Delhi-Trib.) order dated 28.4.2021.

6. The ld. DR relied on the orders of lower authorities.

“ 8. We have heard the rival contentions and perused the material available on record. We find that there is no dispute with regard to fact that fair market value determined by the DVO at Rs. 8,89,63,168/- against the actual sale consideration of Rs. 8,78,00,000/- as disclosed in Sale Deed. The resulting difference is Rs. 11,63,168/- which is 1.02%. The Co-ordinate Bench of this Tribunal in the case of Maria Fernandes Cheryl (supra) has held as under:— 7. 'These submissions, however, do not impress us. As noted by the Central Board of Direct Taxes circular # 8 of 2018, explaining the reason for the insertion of the third proviso to Section 50C(1), has observed that "It has been pointed out that the variation between stamp duty 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". Once the CBDT itself accepts that these variations could be on account of a variety of factors, essentially bona fide factors, and, for this reason, Section 50C(1) should not come into play, it was an "unintended consequence" of Section 50(1) that even in such bona fide situations, this provision, which is inherently in the nature of an anti-avoidance provision, is invoked. Once this situation is sought to be addressed, as is the settled legal position- as we will see a little later in our analysis, this situation needs to be addressed in entirety for the entire period in which such legal provisions had effect, and not for a specific Assessment year: 2011-12 time period only. There is no good reason for holding the curative amendment to be only as prospective in effect. Dealing with a somewhat materially identical situation in the case of Rajeev Kumar Agarwal v. ACIT [(2014) 45 taxmnann.com 555 (Agra)] wherein a coordinate bench was dealing with the question whether insertion of a proviso to Section 40(a)(i) to cure intended consequence could have retrospective effect, even though not specifically provided for, and speaking through one of us (i.e. the Vice President), the coordinate bench had, after a detailed analysis of the legal position, observed that, "Now that the legislature has been compassionate enough to cure these shortcomings of provision, and thus obviate the unintended 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 state so specifically, the insertion of second proviso must be given retrospective effect from the point of time when the related legal provision was introduced". Referring to this decision, and extensively reproducing from the same, including the portion extracted above, Hon'ble Delhi High Court, in the case of CIT v. Ansal Landmark Township Pvt Ltd. [(2015) 61 taxmann.com 45 (Del)], has approved this approach and observed that "(t)he Court is of the view that the above reasoning of the Agra Bench of ITAT as regards the rationale behind the insertion of the second proviso to Section 40(a)(ia) of the Act and its conclusion that the said proviso is declaratory and curative and has retrospective effect from 1st April 2005, merits acceptance". The same was the path followed by another bench of this Tribunal in the case of Dharmashibhai Sonani v. ACIT [(2016) 161 ITD 627 (Ahd)] which has been approved by Hon'ble Madras High Court in the judgment reported as CIT v. Vummudi Amarendran [(2020) 429 ITR 97 (Mad)]. The question that we must take a call on, therefore, is as to what is the rationale behind the insertion of the third proviso to section 50C(1), and if that rationale is to provide a remedy for unintended consequences of the main provision, we must hold that the third proviso to section 50C(1) comes into force with effect from the same date on which the main provision, unintended provisions of which are sought to be nullified, itself was brought into effect. Let us understand what the nature of the provisions of Section 50C is. In terms of this provision, if the property is sold below the stamp duty valuation rate, which is often called circle rate, this stamp duty valuation report is assumed as sale consideration for the property in question, and, accordingly, capital gains tax is levied. This deeming fiction to substitute apparent sale considerations by notional consideration computed on the basis of a stamp duty valuation rate, was thus to address the issue with respect to potential evasion of taxes by understating the sale consideration amount in a sale deed. As noted by the CBDT, while explaining the justification for insertion of section 50 C, "(t)he Finance Act, 2002, has inserted a new section 50C in the Income-tax Act to make a special provision for determining the full value of consideration in cases of transfer of immovable property". Section 50C, thus, on a conceptual note, is a provision to address capital gains tax evasion on account of understatement of the consideration. Of course, the law provides, under section 50C(2), that wherever an assessee claims that the actual market rate is less than the stamp duty valuation, he can have the matter referred to a Departmental Valuation Officer for the ascertainment of the market value, but then it is a (ITA No. 4850/Mum/2019 Assessment year: 2011-12) cumbersome procedure and, at the end of the day, every valuation, whether by the departmental valuation officer or under the stamp duty valuation notification, is an estimate, and there can always be bona fide variations, though to a certain limited extent, in these estimations. Unless, therefore, some kind of a tolerance band or a safe harbour provision, in respect of such bona fide variations, is implicit in the scheme of law, the assessees are bound to face undue hardships. The mechanism under section 50C proceeds on the assumption that when the sale consideration is less than the stamp duty valuation, the sale consideration is to be treated as understated. This assumption is, however, laid to rest when the variations between the stated consideration and the stamp duty valuation figure are treated as explained. 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 immovable property. In other words, as long as the variations are within the permissible limits, the anti- avoidance provisions of section 50C do not come into play. As we have noted earlier, the CBDT itself accepts that there could be various bona fide reasons explaining the small variations between the sale consideration of immovable property as disclosed by the assessee vis-à-vis the stamp duty valuation for the said immovable property. Obviously, therefore, disturbing the actual sale consideration, for the purpose of computing capital gains, and adopting a notional figure, for that purpose, will not be justified in such cases. On a conceptual note, an estimation of market price is an estimation nevertheless, even if by a statutory authority 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. The rigour of section 50C(1) was thus relaxed, and very thoughtfully so, to take these bona fide cases of small variations between the stated sale consideration vis-à-vis stamp duty valuation, out of the scope of adjustments contemplated in the computation of capital gains under this anti-avoidance provision. In our humble understanding, it is a case of a curative amendment to take care of unintended consequences of the scheme of Section 50C. It makes perfect sense, and truly reflects a very pragmatic approach full of compassion and fairness, that just because there is a small variation between the stated sale consideration of a property and stamp duty valuation of the same property, one cannot proceed to draw an inference against the assessee, and subject the assessee to practically prove his being truthful in stating the sale consideration. Clearly, therefore, this insertion of the third proviso to section 50C(1) is in the nature of a remedial measure to address a bona fide situation where there is little justification for invoking an anti-avoidance provision. Similarly, so far as enhancement of tolerance band to 10% by the 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 to 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 these values. As a responsive Government, which is truly the hallmark of the present Government, even though the initial tolerance band level was taken at 5%, in response 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 particular time frame for implementing this enhancement (ITA No. 4850/Mum/2019 Assessment year: 2011- 12) of tolerance band or safe harbour provision. The reasons assigned by the CBDT, i.e., "the variation between stamp duty 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-à-vis the material facts in 2003. What holds good in 2021 was also good in 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 reasons 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 variations between the stated sale consideration vis-à-vis stamp duty valuation to 10%, are curative in nature, and, therefore, these provisions, even though stated to be prospective, must be held to relate back to the date when the related statutory provision of Section 50C, i.e. 1st April 2003. In plain words, what is means is that even if the valuation of a property, for the purpose of stamp duty valuation, is 10% more than the stated sale consideration, the stated sale consideration will be accepted at the face value and the anti- avoidance provisions under section 50C will not be invoked.

8. Once legislature very graciously accepts, by introducing 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 under section 50C could be pressed into service, and thus remedied the law, there is no escape from holding that these amendments are effective with effect from the date on which the related provision, i.e., Section 50C, itself was introduced. These amendments are thus held to be retrospective in effect. In our considered 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 not 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, transparent, 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 plea of the assessee.' 9. Respectfully following the same, we direct the Assessing Officer to delete the addition. Thus, Grounds of appeal raised by the assessee in this appeal are allowed.”

8. Respectfully following the above judgment, we hold that the actual consideration received is within the 10% of tolerance limit as per section 50C(1) third proviso, therefore the actual consideration received is to be considered as sale value for the purpose of computation of Long Term Capital Gain u/s 48 of the Act. and the amendment made by the Finance Act. 2018 will apply in the case of the assessee. Accordingly we allow the ground No. 4 of the assessee.

Pronounced in the open court on this 26th day of June, 2024.