“section 50C stamp duty value”

The Assessing Officer is duty-bound to refer the valuation of property to the Departmental Valuation Officer under Section 50C(2) when an assessee disputes the stamp duty valuation or if there is a discrepancy between the actual sale consideration and the guideline value. This reference is mandatory, even if not explicitly requested by the assessee, to ensure a realistic fair market value and avoid injustice.

The amendment introducing a tolerance band (safe harbour) under section 50C, allowing a difference of up to 10% between actual sale consideration and stamp duty valuation, applies retrospectively. If the difference falls within this limit, the actual sale consideration is adopted as the full value of consideration for computing capital gains.

The third proviso to Section 50C(1) of the Income-tax Act, 1961, which provides a tolerance band of 10% between the sale consideration and the stamp duty value, is retrospective. This curative and declaratory amendment applies from the date of the insertion of Section 50C.

Dharmashibhai Sonani holds that if a statutory proviso is declaratory and curative, intended to remedy unintended consequences of a main provision, it should be given retrospective effect. This principle applies when determining the effective date of such provisos, including the third proviso to Section 50C(1).

Section 50C of the Income Tax Act, 1961, which is a deeming provision, applies only to the transfer of "land or building or both" and therefore does not apply to the transfer of leasehold rights.

The first and second provisos to Section 50C(1) are retrospective in nature and applicable from the inception of the main section. The third proviso to Section 50C(1) is also retrospective and applies from the same date as the main provision.

For the purpose of Section 50C of the Income-tax Act, 1961, when a reference is made to the District Valuation Officer (DVO), the comparison for determining the full value of the consideration has to be made between the value adopted or assessed by the stamp valuation authority and 110% of the consideration received, irrespective of the DVO's valuation if it falls outside this comparison.

The amendment to section 50C(1) of the Income Tax Act, 1961, by inserting the third proviso through the Finance Act, 2018, is curative and applies retrospectively. This means the tolerance band for the difference between sale consideration and stamp duty value, introduced by this amendment, is applicable to earlier assessment years.