Section 43CA of the Income Tax Act

Legislation is ordinarily presumed not to have retrospective operation, especially for taxing statutes unless explicitly stated or when intended to remove hardship for the assessee. The decision clarifies the principles for determining whether an amendment to a taxing statute applies prospectively or retrospectively, distinguishing between clarificatory and substantive amendments.

Interest charged on delayed realization of sale proceeds constitutes business income and is eligible for deduction under Section 80-I of the Income-tax Act.

The revenue must prove that an assessee received extra consideration beyond the declared value; a Departmental Valuation Officer's (DVO) report alone is insufficient to establish such receipt.

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.

Curative amendments, such as a proviso to Section 40(a)(ia) introduced to remove undue hardship, apply retrospectively even without specific legislative declaration, rectifying shortcomings and obviating unintended difficulties.

The proviso to Section 113 of the Income-tax Act is clarificatory and applies retrospectively to block assessments under Chapter XIV-B. It rejects the argument that the amendment is prospective, applying only to periods after June 1, 2002, and establishes a fundamental doctrine of retrospective applicability of statutory provisions.

The primary burden of proof for concealment of income lies with the revenue, and a DVO valuation report can only be relied upon after the revenue has discharged this initial burden.

Under Section 68, once an assessee discharges its initial onus by providing the identity, address, and genuineness of the transaction (e.g., through banking channels) for share capital, share premium, or loan creditors, the amount cannot be treated as undisclosed income of the assessee. Furthermore, before AY 2013-14, there is no onus on the assessee to justify the basis of share premium.

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).

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.