HARISH PAHALAJMAL KHATRI, HUF, AMRAVATI vs. INCOME TAX OFFICER, WARD-2, AMRAVATI

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ITA 384/NAG/2022Status: DisposedITAT Nagpur26 March 2024AY 2015-16Bench: SHRI SATBEER SINGH GODARA (Judicial Member)3 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the difference between the actual purchase price and the DVO's valuation was less than the statutory tolerance limit of 10%. The Tribunal further held that the enhanced tolerance margin of 10% has retrospective effect, being curative in nature.

What were the facts?

The assessee challenged an addition made under section 56(2)(vii)(b)(ii) of the Income Tax Act. The addition was based on the difference between the actual purchase price and the stamp duty value of a capital asset.

What were the issues?

Whether the enhanced tolerance limit of 10% for valuation differences under section 50C, applicable to section 56(2)(vii)(b)(ii), has retrospective effect.

Which sections of the Income-tax Act were involved?

Section 56(2)(vii)(b)(ii),Section 50C

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Income Tax Appellate Tribunal, NAGPUR “SMC” BENCH :NAGPUR [VIRTUAL HEARING]

Before: SHRI SATBEER SINGH GODARA

Hearing: 22.03.2024Pronounced: 26.03.2024

ORDER PER SATBEER SINGH GODARA, J.M. : 1. This assessee’s appeal for assessment year 2015-16, arises against the National Faceless Appeal Centre [in short the “NFAC”] Delhi’s Din and Order No. ITBA/NFAC/S/250/2022- 23/1045633309(1), dated 19.09.2022, involving proceedings u/s. 143(3) of the Income Tax Act, 1961 (in short “the Act”). Heard both the parties. Case file perused.

2.

It emerges at outset that there is hardly any need to delve with the relevant factual matrix at length so far as the assessee’s sole substantive grievance challenging correctness of both the lower authorities action making section 56(2) (vii)(b)(ii) addition of Rs.2,22,950/- is concerned. This is for the precise reason that the actual purchase price of the relevant capital asset is 2 ITA.No.384/NAG./2022 Harish Pahalajmal Khatri, HUF, A.Y. 2015-16 Rs.1,10,72,000/- having inter alia having stamp value of Rs.1,56,37,000/- and the DVO’s valuation thereof has come to Rs.1,19,63,800/-; respectively. That been the case, the difference between actual purchase price and DVO’s valuation comes to the less than the statutory tolerance limit of 10% as per section 50C 3rd proviso applicable mutatis mutandis to S.56(2)(vii)(b)(ii) by virtue of 3rd proviso thereof.

3.

Learned departmental representative vehemently argued that the above tolerance margin; enhanced from 5% to 10%, by the Finance Act, 2020 with effect from 01.04.2021 carries prospective effect only. This Tribunal in C. Maria Fernandes V/s. ITO (2021)187 ITD 738 (Mum.) has already rejected the Revenue’s very stand thereby holding that the same carries retrospective effect being curative in nature. I accept the assessee’s forgoing sole substantive ground in very terms. This assessee’s appeal is allowed. Order pronounced in the open Court on 26.03.2024.

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