AKSHAY AJAY RATHI,AMRAVATI vs. INCOME TAX OFFICER, WARD-4, AMRAVATI

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ITA 71/NAG/2023Status: DisposedITAT Nagpur26 March 2024AY 2016-17Bench: 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 10% tolerance limit applicable to Section 56(2)(vii)(b)(ii). The Tribunal followed a previous ruling that the enhanced tolerance limit has retrospective effect.

What were the facts?

The assessee purchased a capital asset for Rs. 2,00,00,000. The stamp duty value was Rs. 2,56,00,000 and the DVO's valuation was Rs. 2,06,25,000. An addition was made under Section 56(2)(vii)(b)(ii) for the difference between the purchase price and the DVO's valuation.

What were the issues?

Whether the enhanced 10% tolerance limit for property valuation under Section 50C, applicable mutatis mutandis 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: 26.03.2024Pronounced: 26.03.2024

ORDER PER SATBEER SINGH GODARA, J.M. : 1. This assessee’s appeal for assessment year 2016-17, arises against the National Faceless Appeal Centre [in short the “NFAC”] Delhi’s Din and Order No. ITBA/NFAC/S/250/2022- 23/1050448387(1), dated 06.03.2023, 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.2,08,335/- is concerned. This is for the precise reason that the actual purchase price of the relevant capital asset is Rs.2,00,00,000/- having inter alia having stamp value of 2 ITA.No.71 /NAG./2023 Akshay Ajay Rathi A.Y. 2016-17 Rs.2,56,00,000/- and the DVO’s valuation thereof has come to Rs.2,06,25,000/-; 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.

Sd/- [SATBEER SINGH GODARA] JUDICIAL MEMBER Pune, Dated 26th March, 2024 A Ashwini

3 ITA.No.71 /NAG./2023 Akshay Ajay Rathi A.Y. 2016-17

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