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Facts
The revenue appealed an order by the NFAC for assessment year 2013-14, which arose from an ITO's order under Section 143(3). The assessee had income from other sources and capital gains, declaring Rs. 3,37,250/-. The case was selected for scrutiny, and the AO noticed capital gains of Rs. 52,190/- from the sale of an immovable property for Rs. 67,11,000/-, after claiming indexed cost and exemptions.
Held
The Tribunal held that the amendment to Section 50C, which is curative in nature, should be allowed retrospectively. Therefore, the long-term capital gain should be computed based on the actual sale consideration received (Rs. 67,11,000/-), and the deduction under Section 54F should be computed proportionately.
Key Issues
Whether the amendment to Section 50C of the Income Tax Act, 1961, can be applied retrospectively for the assessment year 2013-14, allowing the benefit of actual sale consideration instead of the stamp duty valuation.
Sections Cited
143(3), 50C, 54EC, 54F, 48
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Income Tax Appellate Tribunal, JAIPUR BENCHES, “SMC” JAIPUR
Before: SHRI SANDEEP GOSAIN, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ITA No. 533/JPR/2023
आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, “SMC” JAIPUR Jh lanhi xkslkbZ] U;kf;d lnL; ,oa Jh jkBkSM deys’k t;arHkkbZ] ys[kk lnL; ds le{k BEFORE: SHRI SANDEEP GOSAIN, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ fu/kZkj.k o"kZ@Assessment Year : 2013-14 cuke Income Tax Officer, Smt. Maya Khandelwal Vs. Ward-1(2), Jaipur D-34/Flat No. C-3, Nilgiri Apartment, Saraswati Marg, Bani Park, Jaipur LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AMTPK 9120 E vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : None jktLo dh vksj ls@ Revenue by : Sh. Monisha Choudhary (Addl.CIT) lquokbZ dh rkjh[k@ Date of Hearing : 18/01/2024 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 07/02/2024 vkns'k@ ORDER PER: RATHOD KAMLESH JAYANTBHAI, A.M. This appeal is filed by the revenue aggrieved from the order of the National Faceless Appeal Centre, Delhi [Here in after referred as (NFAC)] for the assessment year 2013-14 dated 30.06.2023, which in turn arises from the order passed by the ITO, Ward-3(2), Jaipur passed under Section 143(3) of the Income tax Act, 1961 (in short 'the Act') dated 11.03.2016.
ITO vs. Smt. Maya Khandelwal 2. The revenue assailed the present appeal on the following grounds;
“1. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) was justified in allowing retrospective benefits to the assessee by directing the AO to take actual sale consideration of the immovable property amounting to Rs. 64,11,000/- while calculating the LTCG despite the fact that the amendment to section 50C(1) of the IT. Act was wef 01.04.2019.”
The fact as culled out from the records is that the assessee has income from other sources and capital gains and filed the return of her total income at Rs. 3,37,250/- on 29.07.2013. The case was selected for scrutiny under CASS. Notice u/s. 143(2) of the Act was issued on 05.09.20214. During the course of assessment proceeding from the computation of income the ld. AO noticed that the assessee has shown capital gains of Rs. 52,190/- out of sale of immovable property for Rs. 67,11,000/- during the year under consideration. The claim of capital gain was offered after clamming the indexed cost of acquisition, transfer expenses and exemption u/s. 54EC and 54F of the Act.
3.1 From the copy of the sale document of the property the ld. AO noted that the assessee has not received the copy of the registered sale deed, as the Hon’ble Rajasthan High Court has ITO vs. Smt. Maya Khandelwal given the stay on the valuation the impugned property for stamp duty purposes. The value of the which was challenged by the assessee before the High Court was valued by the Sub-registrar for an amount of Rs. 1,49,83,640/-. The matter for valuation of the property went in appeal before revenue authorities. The Rajasthan Tax Board, Ajmer vide order dated 18.03.2014 valued the property at Rs. 1,10,77,000/- for stamp duty purposes and value of boundary wall and tin shade was decided at Rs. 1,43,640/- totaling to Rs. 1,12,20,640/-. Against the said order of Rajasthan Tax Boad, the assessee preferred a write petition before the Hon’ble Rajasthan High Court. In the meanwhile, since the matter of valuation of property was in dispute the matter for valuation of the property was referred to DVO who valued the property at Rs. 1,48,40,000/- as against the consideration at Rs. 67,11,000/- in the sale deed. The ld. AO issued a Show cause notice to the assessee as to why the value of the property should not be taken at Rs. 1,12,20,640/- as per the provision of section 50C (3) of the Act. In response the assessee submitted that Hon’ble Rajasthan High Court granted the stay on the order of Rajasthan Tax Board order.
The ld. AO contended that the said stay is for stamp duty valuation
ITO vs. Smt. Maya Khandelwal and therefore, he proceeded to tax the capital gain as per provision of section 50C of the Act and determined the taxable income at Rs. 47,37,900/-.
Aggrieved from the said action of the Assessing Officer, assessee preferred an appeal before the ld. CIT(A)/NFAC. Apropos to the grounds so raised the relevant finding of the ld. CIT(A)/NFAC is reiterated here in below:-
“7. Decision: I have carefully considered the submissions made by the appellant, the facts on record and the applicable law in this regard. 7.1 Ground of appeal No. 3 being general in nature does not require adjudication. 7.2 Ground of appeal No. 1 is against the action of the Assessing Officer in reducing the deduction under section 54F of the Act to Rs. 15,30,658/-. Ground of appeal No. 2 is against the computation made by the Assessing Officer of long term capital gain at Rs. 44,52,844/- as against Rs. 52,190/- declared by the assessee. As both these grounds are interlinked, they are taken up for adjudication together. In the instant case, the assessee had filed her return of income declaring capital gains of Rs. 52,190/- arising from the sale of an immovable property for Rs. 67,11,000/- during the year, after claiming indexed cost of acquisition, transfer expenses and exemption u/s 54EC & 54F of the Act. However, the valuation of the property for stamp duty purposes was made by the Sub-Registrar, Sanganer at Rs. 1,49,83,640/- against which appeal was preferred before Revenue Authorities. The Rajasthan Tax Board, Ajmer vide their order dated 18-03-2014 valued the property at total value at Rs. 1,12,20,640/- for stamp duty proposes. Further appeal against the order of Rajasthan Tax Board, Ajmer was filed before Hon'ble Rajasthan High Court, which vide order dated 02/12/2014 in D.B. Civil Writ Petition No. 6794/2014 stayed the operation of order of ITO vs. Smt. Maya Khandelwal Rajasthan Tax Board, Ajmer till further orders. In the interim the Assessing Officer completed the assessment in the assessee's case by computing the long term capital gain on sale of property taking the value as per DLC value determined by Rajasthan Tax Board, Ajmer vide their order dated 18.03.2014 of property sold on less brokerage at Rs. 11086420/-. Consequently, the deduction u/s 54F of the Act was restricted to Rs.1530658 and after allowing deduction u/s 54EC of the Act at Rs.4060000/-, the taxable Long-term Capital Gains was computed at Rs.44,52,844/-.
In the present appellate proceedings, the appellant submitted that the Hon'ble High Court of Rajasthan had decided the matter and directed the stamp duty valuation authority to make assessment of value for the purpose of stamp duty and accordingly Collector (Stamps), Jaipur Circle Third (Raj.) had assessed the property for the purpose of stamp duty at Rs. 6781105/-. Copy of order of Hon'ble High Court of Rajasthan and order of Collector (Stamps), Jaipur, Circle Third (Raj.) along with copy of sale agreement showing registered at Rs. 6781105/-were duly furnished. The appellant further submitted that after considering the stamp duty value at Rs. 6781105/- as determined by Collector (Stamps), Jaipur, the difference between sale consideration and value adopted for the purpose of stamp duty remained only 1.045% (Difference in value Rs 70105/-, i.e. Stamp duty value Rs. 6781105/-minus Sale consideration Rs. 6711000/-). Hence it was requested to accept the stated sale consideration i.e. 6711000/- at the face value and not to invoke the provisions of section 50C. In this regard the appellant relied on order of Hon'ble ITAT, Mumbai in case of Smt. Cheryl Maria Fernandes vs Ito (It)-2(3)(1), in Assessment year: 2011-12) where Hon'ble ITAT, Mumbai. The appellant further relied on the decision of Hon'ble ITAT, Mumbai in the case of Shaista Irphan Mogul, Mumbai vs Central Circle-5(3), Mumbai dated 1st July, 2021. (I.T.A. No. 4916/Mum/2019 (Assessment Year 2016-17).
Having duly considered the facts on record, the appellant's submissions and the judicial decisions cited as above, it is an undisputed fact that the matter of valuation for stamp duty purposes of the property sold by the assessee has reach finality with the order passed by the Collector Stamps as per the direction of the Hon'ble Rajasthan High Court, and the value has been decided at Rs. 6781105/- as against the actual sale consideration of Rs. 6711000/-. With regard to the applicability of the provisions of Section 50C it is noted that amendment was made vide insertion of 3rd proviso with effect from 1.4.2019 as under: Provided also that where the value adopted or assessed or assessable by the stamp valuation authority does not exceed one hundred and five percent of the consideration received or accruing as a result of the transfer, the consideration so received or accruing as a result of the ITO vs. Smt. Maya Khandelwal transfer shall, for the purpose of section 48, be deemed to be the full value of consideration. Thus from the above it is seen that w.e.f. 01-04-2019, provisions of section 50C(1) will not apply if the difference between the stamp duty valuation and the actual sales consideration does not exceed 5%. This limit was increased to 10% by Finance Act, 2020 to take effect from 01- 04-2021. The relevant F.Y in the instant case is F.Y 2012-13. However, it has been held by various higher judicial authorities including the Appellate Tribunals in the decisions relied upon by the appellant that in case of amendments that are curative in nature and brought into the statute to mitigate hardship to taxpayers, benefit of the amendments should be allowed retrospectively. Respectfully following the same, it is held that long term capital gain in the appellant's case should be computed taking the value of consideration received on transfer of the property at actual sale consideration received i.e., Rs.6711000/- and consequently, the deduction to be allowed u/s 54F is to be computed proportionately. The A.O is directed to re-compute the long term capital gains arising in the appellant's case for the relevant A.Y accordingly. The appellant's grounds are thus treated as allowed subject to verification and re- computation of long term capital gain as above.
Accordingly, in the result, the appeal filed by the appellant is allowed for statistical purposes.”
The ld DR submitted that the main issue in these appeals is about the applicability of the amended section of 50C from the A.Y 2019-20 and can be given benefit to the assessee for A,Y 2013-14 or not. Therefore, considering that aspect of the matter, the ld. DR prayed that at least the addition that has been arising on account of the reduction of DLC rate granted by the Hon’ble High Court be sustained in the hands of the assessee and the amendment of ITO vs. Smt. Maya Khandelwal section 50C cannot be given benefit to the assessee retrospectively.
We have heard the ld. DR and perused the material placed on record. The bench noted that the revenue has taken the single ground of the applicability of the amendment made in section 50C of the Act being applied to the assessee for the year under consideration by ld. CIT(A) retrospectively. On the aspect of the matter the bench noted that the dispute of valuation of the property for stamp duty purposes was made by the Sub-Registrar, Sanganer at Rs. 1,49,83,640/- against which appeal was preferred before Revenue Authorities. The Rajasthan Tax Board, Ajmer vide their order dated 18-03-2014 valued the property at total value at Rs. 1,12,20,640/- for stamp duty purposes. Further appeal against the order of Rajasthan Tax Board, Ajmer was filed before Hon'ble Rajasthan High Court, which vide order dated 2/12 / 2014 in D.B.
Civil Writ Petition No. 6794/2014 stayed the operation of order of Rajasthan Tax Board, Ajmer till further orders. In the interim the Assessing Officer completed the assessment in the assessee's case by computing the long term capital gain on sale of property
ITO vs. Smt. Maya Khandelwal taking the value as per DLC value determined by Rajasthan Tax Board, Ajmer vide their order dated 18.03.2014 of property sold on less brokerage. Consequently, the deduction u/s 54F of the Act was restricted to Rs.1530658 and after allowing deduction u/s 54EC of the Act at Rs.40,60,000/-, the taxable Long-term Capital Gains was computed at Rs.44,52,844/-.
6.1 Based on the set of evidence furnished by the assessee in the proceeding before the ld. CIT(A) has considered the plea of the assessee that the Hon'ble High Court of Rajasthan had decided the matter and directed the stamp duty valuation authority to make assessment of value for the purpose of stamp duty and accordingly Collector (Stamps), Jaipur Circle Third ( Raj , ) had assessed the property for the purpose of stamp duty at Rs. 67,81,105/-. Copy of order of Hon'ble High Court of Rajasthan and order of Collector (Stamps), Jaipur, Circle Third ( Raj .) along with copy of sale agreement showing registered at Rs. 67,81,105/-were duly furnished before the ld. CIT(A). The appellant further submitted that after considering the stamp duty value at Rs. 67,81,105/- as determined by Collector (Stamps), Jaipur, the difference between
ITO vs. Smt. Maya Khandelwal sale consideration and value adopted for the purpose of stamp duty remained only 1.045% (Difference in value Rs 70,105/-, i.e. Stamp duty value Rs. 67,81,105/- minus Sale consideration Rs. 67,11,000/-). Hence it was requested to accept the stated sale consideration i.e. 6711000/- at face value and not to invoke the provisions of section 50C. In this regard the appellant relied on order of Hon'ble ITAT, Mumbai in case of Smt. Cheryl Maria Fernandes vs Ito (It)-2(3)(1), in Assessment year: 2011-12) where Hon'ble ITAT, Mumbai. The appellant further relied on the decision of Hon'ble ITAT, Mumbai in the case of Shaista Irphan Mogul, Mumbai vs Central Circle-5(3), Mumbai dated 1st July, 2021. (Ι.Τ.Α. No. 4916/Mum/2019 (Assessment Year 2016-17).
6.2 The bench noted that the difference in the valuation remain after the direction of the High Court is only 1.04% and therefore, considering the specific exclusion provision which is benefit in nature and ld. CIT(A) has already considered the judicial decisions cited by the assessee has granted the benefit to the assessee. We do not find any infirmity in the said finding in the order of the ld.
ITO vs. Smt. Maya Khandelwal CIT(A) and therefore, we do not find any merit in the arguments advanced and the grounds so raised by the revenue thus dismissed.
In the result, the appeal of the revenue is dismissed.
Order pronounced in the open court on 07/02/2024.