Smt. Kundanben Ambalal Shah,, Ahmedabad v. The Income Tax Officer, Ward-10(2),, Ahmedabad

ITA 3354/AHD/2014 | 2009-2010
Pronouncement Date: 30-11-2017 | Result: Allowed

Appeal Details

RSA Number 335420514 RSA 2014
Assessee PAN ADAPS6884R
Bench Ahmedabad
Appeal Number ITA 3354/AHD/2014
Duration Of Justice 2 year(s) 11 month(s) 15 day(s)
Appellant Smt. Kundanben Ambalal Shah,, Ahmedabad
Respondent The Income Tax Officer, Ward-10(2),, Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 30-11-2017
Appeal Filed By Assessee
Tags No record found
Order Result Allowed
Bench Allotted A
Tribunal Order Date 30-11-2017
Assessment Year 2009-2010
Appeal Filed On 15-12-2014
Judgment Text
ITA NO. 3354/AHD/2014 SMT KUNDANBEN AMHALAL SHAH VS. ITO A.Y. 2009-10 PAGE 1 OF 10 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH AHMEDABAD [CORAM: PRAMOD KUMAR AM AND MAHAVIR PRASAD JM] I.T.A. NO.3354/AHD/2014 ASSESSMENT YEAR : 2009-10 SMT. KUNDANBEN AMBALAL SHAH .....APPELLANT SUMERU BUNGLOW NR. ZT. XAVIERS COLLEGE CORNER NAVRANGPURA AHMEDABAD-380009 [PAN : ADAPS 6884 R] VS. INCOME TAX OFFICER .RESPONDENT WARD 10 (2) AHMEDABAD APPEARANCES BY: SN SOPARKAR FOR THE APPELLANT JAYANT JHAVERI FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING : 29.11.2017 DATE OF PRONOUNCING THE ORDER : 30.11.2017 O R D E R PER PRAMOD KUMAR AM: 1. BY WAY OF THIS APPEAL THE ASSESSEE APPELLANT HA S CHALLENGED CORRECTNESS OF THE ORDER DATED 14 TH OCTOBER 2014 PASSED BY THE CIT(A)-XVI AHMEDABAD I N THE MATTER OF ASSESSMENT UNDER SECTION 143(3) R.W.S. 14 7 OF THE INCOME-TAX ACT 1961 FOR THE ASSESSMENT YEAR 2009-10 2. GRIEVANCES RAISED BY THE ASSESSEE ARE AS FOLLOWS :- (1) ORDER U/S.250 DT. 14. 10. 2014 BEING ERRONEOUS WITHOUT CONSIDERING FACTS ON RECORD PROPERLY AND AGAINST THE PRINCIPLES OF JU STICE BE CANCELLED AND SET ASIDE. (2) LONG TERM CAPITAL GAIN CONSIDERED RS.41 78 564 /- U/S 50C OF THE ACT TAKING THE VALUE OF RS.1 48 05 950/- AS PER VALUATI ON BY THE REGISTERING AUTHORITY INSTEAD OF ACTUAL SALE CONSIDERATION RS.1 05 00 000/- BEING IMPROPER AND UNWARRANTED BE CANCELLED. ITA NO. 3354/AHD/2014 SMT KUNDANBEN AMHALAL SHAH VS. ITO A.Y. 2009-10 PAGE 2 OF 10 (3) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) AHMEDABAD HAS ERRED IN NOT CONSIDERING PROPERLY AND JUDICIOUSLY T HAT: (I) PROVISIONS OF SECTION 50C ARE NOT APPLICABLE AT ALL. (II) AGREEMENT TO SALE THE CONCERNED PROPERTY WAS MADE ON 04.07.2007. (III) OUT OF THE TOTAL SALE CONSIDERATION AGREED AS PER AGREEMENT TO SALE 95% OF THE SALE PRICE ALREADY RECEIVED IN F.Y.2007- 08 31.03.2008. (IV) POSSESSION OF THE PROPERTY WAS HANDED OVER AS PER AGREEMENT DT.30.01.2009. (V) DEED OF SALE EXECUTED AND REGISTERED ON 24.09.2 009 FOR WHICH AUTHORITY CHARGED REGISTRATION FEES ETC. AT RS.1 05 200/- ON THE BASIS OF SALE CONSIDERATION OF RS.1 05 00 000/- (VI)VALUATION REPORT OF APPROVED VALUER PARAS RANGW ALA OF S.C. RANGWALA DT. 04.06.2007 SUBMITTED IN SUPPORT OF PRE VAILING RATE AT THE TIME OF ENTERING INTO AGREEMENT TO SALE IS ALSO NOT TAKEN INTO ACCOUNT. (VII)IN VIEW OF (VI) ABOVE ASSISTANT COMMISSIONER O F INCOME TAX EVEN NOT REFERRED THE VALUATION TO DEPARTMENT VALUATION OFFI CER AND THEREBY NOT ACTED IN THE SPIRIT OF JUSTICE. (VIII)IN VIEW OF THE ABOVE VALUATION ADOPTED BY STA MP DUTY AUTHORITY AMOUNTS TO PROCEDURE ON THE BASIS OF THEN PREVAILIN G JANTRY RATES. 3. LEARNED REPRESENTATIVES FAIRLY AGREE THAT WHATEV ER WE DECIDE IN THE CASE OF AMITKUMAR AMBALAL (HUF) VS. ACIT (ITA NO. 3353/AHD/ 2014) WILL BE EQUALLY APPLICABLE HERE AS WELL. VIDE OUR ORDER OF EVEN DAT E IN THE SAID CASE WE HAVE HELD AS FOLLOWS: 3. WHEN THIS APPEAL WAS CALLED OUT FOR HEARING LE ARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE SHORT ISSUE THAT HE WOU LD LIKE TO PURSUE IN THIS APPEAL IS THAT THE STAMP DUTY VALUATION FOR THE PUR POSE OF ADOPTING VALUE OF CONSIDERATION UNDER SECTION 50C SHOULD BE AS ON THE DATE ON WHICH THE AGREEMENT TO SALE WAS ENTERED INTO AND NOT THE DATE ON WHICH THE TRANSACTIONS ACTUALLY TOOK PLACE. LEARNED COUNSEL SUBMITTED THAT THE RELEVANT DATE FOR ASCERTAINING WHETHER OR NOT THE SALE CONSI DERATION IS SUPPRESSED IS THE DATE ON WHICH AN AGREEMENT WAS ENTERED INTO. I N SUPPORT OF THIS PROPOSITION HE INVITES OUR ATTENTION TO A DECISION OF AHMEDABAD SMC BENCH IN THE CASE OF DHARAMSHIBHAI SONANI VS. ACIT (ITA N O.1237/AHD/2013; ORDER DATED 30.09.2016) WHICH INTER ALIA OBSERVES AS FO LLOWS:- [4] THE FUNDAMENTAL PURPOSE OF INTRODUCING SECTION 50C WAS TO COUNTER SUPPRESSION OF SALE CONSIDERATION ON SALE O F IMMOVABLE PROPERTIES AND THIS SECTION WAS INTRODUCED IN THE LIGHT OF WIDESPREAD BELIEF THAT SALE TRANSACTIONS OF LAND AND BUILDING ARE OFTEN UNDERVALUED RESULTING IN LEAKAGE OF LEGITIMATE TAX REVENUES. TH IS SECTION PROVIDES FOR A PRESUMPTION A REBUTTABLE PRESUMPTION THOUGH- SOMETHING WITH WHICH I AM NOT CONCERNED FOR THE TIME BEING THAT T HE VALUE FOR THE ITA NO. 3354/AHD/2014 SMT KUNDANBEN AMHALAL SHAH VS. ITO A.Y. 2009-10 PAGE 3 OF 10 PURPOSE OF COMPUTING STAMP DUTY ADOPTED BY THE STA MP DUTY VALUATION AUTHORITY REPRESENTS FAIR INDICATION OF THE MARKET PRICE OF THE PROPERTY SOLD. SECTION 50C(1) PROVIDES THAT WHERE THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF THE TRANSFER BY AN ASSESSEE OF A CAPITAL ASSET BEING LAND OR BUILDING OR BOTH IS LESS THAN THE VALUE ADOPTED OR ASSESSED OR ASSESSABLE BY ANY AUTH ORITY OF A STATE GOVERNMENT (HEREAFTER IN THIS SECTION REFERRE D TO AS THE 'STAMP VALUATION AUTHORITY') FOR THE PURPOSE OF PAY MENT OF STAMP DUTY IN RESPECT OF SUCH TRANSFER THE VALUE SO ADOP TED OR ASSESSED OR ASSESSABLE SHALL FOR THE PURPOSES OF SECTION 48 BE DEEMED TO BE THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF SUCH TRANSFER . THE TROUBLE HOWEVER IS THAT WHILE THE SALE CONSIDERATION IS FIXED AT THE POINT OF TIME WHEN AG REEMENT TO SELL IS ENTERED INTO THERE IS SOMETIMES CONSIDERABLE GAP I N PARTIES AGREEING TO A TRANSACTION (I.E. AGREEMENT TO SELL) AND THE A CTUAL EXECUTION OF THE TRANSACTION (I.E. SALE DEED) AND YET IT IS THE VA LUE AS ON THE DATE OF EXECUTION OF SALE DEED WHICH IS RECOGNIZED BY SECTI ON 50C FOR THE PURPOSE OF COMPUTING THE CAPITAL GAIN BECAUSE THAT IS WHAT IS RELEVANT FOR THE PURPOSE OF COMPUTING STAMP DUTY FOR REGISTR ATION OF SALE DEED. THE VERY COMPARISON BETWEEN THE VALUE AS PER SALE D EED AND THE VALUE AS PER STAMP DUTY VALUATION ACCORDINGLY CEA SES TO BE DEVOID OF A RATIONAL BASIS BECAUSE THESE TWO VALUES REPRESENT THE VALUES AT TWO DIFFERENT POINTS OF TIME. IN A SITUATION IN WHICH T HERE IS SIGNIFICANT DIFFERENCE BETWEEN THE POINT OF TIME WHEN AGREEMENT TO SELL IS EXECUTED AND WHEN THE SALE DEED IS EXECUTED THEREF ORE SHOULD IDEALLY BE BETWEEN THE SALE CONSIDERATION AS PER REGISTERED SALE DEED WHICH IS FIXED BY WAY OF THE AGREEMENT TO SELL VIS--VIS THE STAMP DUTY VALUATION AS AT THE POINT OF TIME WHEN AGREEMENT TO SELL WHEREBY SALE CONSIDERATION WAS INFACT FIXED BECAUSE IF AT ALL ANY SUPPRESSION OF SALE CONSIDERATION SHOULD BE ASSUMED IT SHOULD BE ON THE BASIS OF STAMP DUTY VALUATION AS AT THE POINT OF TIME WHEN T HE SALE CONSIDERATION WAS FIXED. INCOME TAX SIMPLIFICATION COMMITTEE SET UP IN 2015 HEADED BY JUSTICE R V EASWAR- A FORMER JUDGE OF DELHI HIGH COURT AND ONE OF THE MOST ILLUSTRIOUS FORMER PRESID ENTS OF THIS TRIBUNAL TOOK NOTE OF THIS INCONGRUITY AND IN ITS VERY FIRS T REPORT ( HTTP://TAXSIMPLIFICATION.IN/REPORT.PDF ) OBSERVED AS FOLLOWS: 6.1 RATIONALISATION OF SECTION 50C TO PROVIDE RELIE F WHERE SALE CONSIDERATION FIXED UNDER AGREEMENT TO SELL SECTION 50C MAKES A SPECIAL PROVISION FOR DETERMINI NG THE FULL VALUE OF CONSIDERATION IN CASES OF TRANSFER OF IMMOVABLE PRO PERTY. IT PROVIDES THAT WHERE THE CONSIDERATION DECLARED TO BE RECEIVED OR ACCRUING AS A RESULT OF THE TRANSFER OF LAND OR BUILDING OR BOTH IS LESS THAN THE VALUE ADOPTED OR ASSESSED OR ASSESSABLE BY ANY AUTHORITY OF A STATE GOVERNMEN T (I.E. STAMP VALUATION AUTHORITY) FOR THE PURPOSE OF PAYMENT OF STAMP DUT Y IN RESPECT OF SUCH TRANSFER THE VALUE SO ADOPTED OR ASSESSED OR ASSES SABLE SHALL BE DEEMED TO BE THE FULL VALUE OF THE CONSIDERATION AND CAPITAL GAINS SHALL BE COMPUTED ON THE BASIS OF SUCH CONSIDERATION UNDER SECTION 48 OF THE INCOME-TAX ACT. ITA NO. 3354/AHD/2014 SMT KUNDANBEN AMHALAL SHAH VS. ITO A.Y. 2009-10 PAGE 4 OF 10 THE SCOPE OF SECTION 50C WAS EXTENDED W.E.F. A.Y. 2 010-11 TO THE TRANSACTION WHICH WERE EXECUTED THROUGH AGREEMENT TO SELL OR PO WER OF ATTORNEY BY INSERTING THE WORD ASSESSABLE ALONGWITH WORDS TH E VALUE SO ADOPTED OR ASSESSED. HENCE SECTION 50C IS NOW ALSO APPLICABL E IN CASE OF SUCH TRANSFERS. THE PRESENT PROVISIONS OF SECTION 50C DO NOT PROVID E ANY RELIEF WHERE THE SELLER HAS ENTERED INTO AN AGREEMENT TO SELL THE AS SET MUCH BEFORE THE ACTUAL DATE OF TRANSFER OF THE IMMOVABLE PROPERTY AND THE SALE CONSIDERATION HAS BEEN FIXED IN SUCH AGREEMENT. A LATER SIMILAR PROVI SION INSERTED BY WAY OF SECTION 43CA DOES TAKE CARE OF SUCH A SITUATION. 6.2 IT IS THEREFORE PROPOSED TO INSERT THE FOLLOWIN G PROVISIONS IN SECTION 50C: (4) WHERE THE DATE OF AN AGREEMENT FIXING THE VALUE OF CONSIDERATION FOR THE TRANSFER OF THE ASSET AND THE DATE OF REGISTRAT ION OF THE TRANSFER OF THE ASSET ARE NOT SAME THE VALUE REFERRED TO IN SUB- SECTION (1) MAY BE TAKEN AS THE VALUE ASSESSABLE BY ANY AUTHORITY OF A STATE GOVERN MENT FOR THE PURPOSE OF PAYMENT OF STAMP DUTY IN RESPECT OF SUCH TRANSFER O N THE DATE OF THE AGREEMENT. (5) THE PROVISIONS OF SUB-SECTION (4) SHALL APPLY O NLY IN A CASE WHERE THE AMOUNT OF CONSIDERATION OR A PART THEREOF HAS BEEN RECEIVED BY ANY MODE OTHER THAN CASH ON OR BEFORE A DATE OF AGREEMENT FO R TRANSFER OF THE ASSET. [5] TRUE TO THE WORK ETHOS OF THE CURRENT GOVERNMEN T IT WAS THE FIRST TIME THAT WITHIN FOUR MONTHS OF THE TAX SIMPLIFICAT ION COMMITTEE BEING NOTIFIED NOT ONLY THE FIRST REPORT OF THE COMMITTE E WAS SUBMITTED BUT THE GOVERNMENT ALSO WALKED THE TALK BY ENSURING THA T THE SEVERAL STATUTORY AMENDMENTS BASED ON RECOMMENDATIONS OF T HIS REPORT WERE INTRODUCED IN THE PARLIAMENT. SO FAR AS SECTION 50 C IS CONCERNED THE FINANCE ACT 2016 WITH EFFECT FROM 1 ST APRIL 2017 INSERTED THE FOLLOWING PROVISOS TO SECTION 50C: PROVIDED THAT WHERE THE DATE OF THE AGREEMENT FIXING THE AM OUNT OF CONSIDERATION AND THE DATE OF REGISTRATION FOR THE TRANSFER OF THE CAPITAL ASSET ARE NOT THE SAME THE VALUE ADOPTED OR ASSESSED OR ASSESSABLE BY THE STAMP VALUATION AUTHORITY ON THE DATE OF AGREEMENT MAY BE TAKEN FOR THE PURPOSES OF COMPUTING FULL VALUE OF CONSIDERATION FOR SUCH TRAN SFER: PROVIDED FURTHER THAT THE FIRST PROVISO SHALL APPLY ONLY IN A CASE WHERE THE AMOUNT OF CONSIDERATION OR A PART THEREOF HAS BEE N RECEIVED BY WAY OF AN ACCOUNT PAYEE CHEQUE OR ACCOUNT PAYEE BANK DRAFT OR BY USE OF ELECTRONIC CLEARING SYSTEM THROUGH A BANK ACCOUNT ON OR BEFOR E THE DATE OF THE AGREEMENT FOR TRANSFER. [6] THIS AMENDMENT WAS EXPLAINED IN THE MEMORANDUM EXPLAINING THE PROVISIONS OF FINANCE BILL 2016 ( HTTP://INDIABUDGET.NIC.IN/UB2016- 17/MEMO/MEM1.PDF ) AS FOLLOWS: ITA NO. 3354/AHD/2014 SMT KUNDANBEN AMHALAL SHAH VS. ITO A.Y. 2009-10 PAGE 5 OF 10 RATIONALIZATION OF SECTION 50C IN CASE SALE CONSIDE RATION IS FIXED UNDER AGREEMENT EXECUTED PRIOR TO THE DATE OF REGISTRATIO N OF IMMOVABLE PROPERTY UNDER THE EXISTING PROVISIONS CONTAINED IN SECTION 50C IN CASE OF TRANSFER OF A CAPITAL ASSET BEING LAND OR BUILDING ON BOTH THE V ALUE ADOPTED OR ASSESSED BY THE STAMP VALUATION AUTHORITY FOR THE PURPOSE OF PA YMENT OF STAMP DUTY SHALL BE TAKEN AS THE FULL VALUE OF CONSIDERATION FOR THE PURPOSES OF COMPUTATION OF CAPITAL GAINS. THE INCOME TAX SIMPLIFICATION COMMIT TEE (EASWAR COMMITTEE) HAS IN ITS FIRST REPORT POINTED OUT THAT THIS PROV ISION DOES NOT PROVIDE ANY RELIEF WHERE THE SELLER HAS ENTERED INTO AN AGREEMENT TO S ELL THE PROPERTY MUCH BEFORE THE ACTUAL DATE OF TRANSFER OF THE IMMOVABLE PROPERTY AND THE SALE CONSIDERATION IS FIXED IN SUCH AGREEMENT WHEREAS S IMILAR PROVISION EXISTS IN SECTION 43CA OF THE ACT I.E. WHEN AN IMMOVABLE PROP ERTY IS SOLD AS A STOCK-IN- TRADE. IT IS PROPOSED TO AMEND THE PROVISIONS OF SE CTION 50C SO AS TO PROVIDE THAT WHERE THE DATE OF THE AGREEMENT FIXING THE AMO UNT OF CONSIDERATION FOR THE TRANSFER OF IMMOVABLE PROPERTY AND THE DATE OF REGI STRATION ARE NOT THE SAME THE STAMP DUTY VALUE ON THE DATE OF THE AGREEMENT M AY BE TAKEN FOR THE PURPOSES OF COMPUTING THE FULL VALUE OF CONSIDERATI ON. IT IS FURTHER PROPOSED TO PROVIDE THAT THIS PROVISION SHALL APPLY ONLY IN A C ASE WHERE THE AMOUNT OF CONSIDERATION REFERRED TO THEREIN OR A PART THEREO F HAS BEEN PAID BY WAY OF AN ACCOUNT PAYEE CHEQUE OR ACCOUNT PAYEE BANK DRAFT OR USE OF ELECTRONIC CLEARING SYSTEM THROUGH A BANK ACCOUNT ON OR BEFOR E THE DATE OF THE AGREEMENT FOR THE TRANSFER OF SUCH IMMOVABLE PROPER TY. 30 THESE AMENDMENTS ARE PROPOSED TO BE MADE EFFECTIVE FROM T HE 1ST DAY OF APRIL 2017 AND SHALL ACCORDINGLY APPLY IN RELATION TO ASS ESSMENT YEAR 2017-18 AND SUBSEQUENT YEARS. [7] WHILE THE GOVERNMENT HAS THUS RECOGNIZED THE GE NUINE AND INTENDED HARDSHIP IN THE CASES IN WHICH THE DATE OF AGREEMENT TO SELL IS PRIOR TO THE DATE OF SALE AND INTRODUCED WELCOME A MENDMENTS TO THE STATUE TO TAKE THE REMEDIAL MEASURES THIS BRINGS N O RELIEF TO THE ASSESSEE BEFORE ME AS THE AMENDMENT IS INTRODUCED O NLY WITH PROSPECTIVE EFFECT FROM 1 ST APRIL 2017. THERE CANNOT BE ANY DISPUTE THAT THIS AMENDMENT IN THE SCHEME OF SECTION 50C HAS BEE N MADE TO REMOVE AN INCONGRUITY RESULTING IN UNDUE HARDSHIP TO THE ASSESSEE AS IS EVIDENT FROM THE OBSERVATION IN EASWAR COMMITTEE REPORT TO THE EFFECT THAT THE (THEN PREVAILING) PROVISIONS OF SECTION 50C DO NOT PROVIDE ANY RELIEF WHERE THE SELLER HAS ENTERED INT O AN AGREEMENT TO SELL THE ASSET MUCH BEFORE THE ACTUAL DATE OF TR ANSFER OF THE IMMOVABLE PROPERTY AND THE SALE CONSIDERATION HAS B EEN FIXED IN SUCH AGREEMENT RECOGNIZING THE INCONGRUITY THAT THE DATE AGREEME NT OF SELL HAS BEEN IGNORED IN THE STATUTE EVEN THOUG H IT WAS CRUCIAL AS IT WAS AT THIS POINT OF TIME THAT THE SALE CONSIDERATI ON IS FINALIZED. THE INCONGRUITY IN THE STATUTE WAS GLARING AND UNDUE HA RDSHIP NOT IN DISPUTE. ONCE IT IS NOT IN DISPUTE THAT A STATUTOR Y AMENDMENT IS BEING MADE TO REMOVE AN UNDUE HARDSHIP TO THE ASSESSEE OR TO REMOVE AN APPARENT INCONGRUITY SUCH AN AMENDMENT HAS TO BE T REATED AS EFFECTIVE FROM THE DATE ON WHICH THE LAW CONTAININ G SUCH AN UNDUE HARDSHIP OR INCONGRUITY WAS INTRODUCED. IN SUPPORT OF THIS PROPOSITION I FIND SUPPORT FROM HONBLE DELHI HIGH COURTS JUDGME NT IN THE CASE OF ITA NO. 3354/AHD/2014 SMT KUNDANBEN AMHALAL SHAH VS. ITO A.Y. 2009-10 PAGE 6 OF 10 CIT VS ANSAL LANDMARK TOWNSHIP PVT LTD [(2015) 377 ITR 635 (DEL)] WHEREIN APPROVING THE REASONING ADOPTED AN ORDER AUTHORED BY ME DURING MY TENURE AT AGRA BENCH [I..E RAJEEV KUMA R AGARWAL VS ACIT (2014) 149 ITD 363 (AGRA)] WHICH CENTRED ON TH E PRINCIPLE THAT WHEN LEGISLATURE IS REASONABLE AND COMPASSIONATE EN OUGH TO UNDO THE UNDUE HARDSHIP CAUSED BY THE STATUTE SUCH AN AMENDMENT IN LAW IN VIEW OF THE WELL SETTLED LEGAL POSITION TO THE EFFE CT THAT A CURATIVE AMENDMENT TO AVOID UNINTENDED CONSEQUENCES IS TO BE TREATED AS RETROSPECTIVE IN NATURE EVEN THOUGH IT MAY NOT STAT E SO SPECIFICALLY . IN THIS CASE IT WAS SPECIFICALLY OBSERVED AND IT WAS THIS OBSERVATION WHICH WAS REPRODUCED WITH APPROVAL BY T HEIR LORDSHIPS AS FOLLOWS: NOW THAT THE LEGISLATURE HAS BEEN COMPASSIONATE ENO UGH TO CURE THESE SHORTCOMINGS OF PROVISION AND THUS OBVIATE THE UNI NTENDED HARDSHIPS SUCH AN AMENDMENT IN LAW IN VIEW OF THE WELL SETTL ED LEGAL POSITION TO THE EFFECT THAT A CURATIVE AMENDMENT TO AVOID UNINT ENDED CONSEQUENCES IS TO BE TREATED AS RETROSPECTIVE IN N ATURE EVEN THOUGH IT MAY NOT STATE SO SPECIFICALLY THE INSERTION OF SEC OND PROVISO MUST BE GIVEN RETROSPECTIVE EFFECT FROM THE POINT OF TIME W HEN THE RELATED LEGAL PROVISION WAS INTRODUCED. IN VIEW OF THESE DISCUSSIONS AS ALSO FOR THE DETAILED REASONS SET OUT EARLIER WE CANNOT SUBSCRI BE TO THE VIEW THAT IT COULD HAVE BEEN AN 'INTENDED CONSEQUENCE' TO PUNISH THE ASSESSEES FOR NON-DEDUCTION OF TAX AT SOURCE BY DECLINING THE DEDUCTION IN RESPECT OF RELATED PAYMENTS EVEN WHEN THE CORRESPONDING IN COME IS DULY BROUGHT TO TAX. THAT WILL BE GOING MUCH BEYOND THE OBVIOUS INTENTION OF THE SECTION. ACCORDINGLY WE HOLD THAT THE INSERTION OF SECOND PROVISO TO SECTION 40(A)(IA) IS DECLARATORY AND CURATIVE IN NA TURE AND IT HAS RETROSPECTIVE EFFECT FROM 1ST APRIL 2005 BEING TH E DATE FROM WHICH SUB CLAUSE (IA) OF SECTION 40(A) WAS INSERTED BY THE FI NANCE (NO. 2) ACT 2004 [8] THEIR LORDSHIPS WERE PLEASED TO HOLD THAT THIS REASONING AND RATIONALE OF THIS DECISION MERITS ACCEPTANCE. TH E SAME PRINCIPLE WHEN APPLIED IN THE PRESENT CONTEXT LEADS TO THE C ONCLUSION THAT THE PRESENT AMENDMENT BEING AN AMENDMENT TO REMOVE AN APPARENT INCONGRUITY WHICH RESULTED IN UNDUE HARDSHIPS TO TH E TAXPAYERS SHOULD BE TREATED AS RETROSPECTIVE IN EFFECT. QUITE CLEARL Y THEREFORE EVEN WHEN THE STATUTE DOES NOT SPECIFICALLY STATE SO SUCH AM ENDMENTS IN THE LIGHT OF THE DETAILED DISCUSSIONS ABOVE CAN ONLY BE TREA TED AS RETROSPECTIVE AND EFFECTIVE FROM THE DATE RELATED STATUTORY PROVI SIONS WAS INTRODUCED. VIEWED THUS THE PROVISO TO SECTION 50 C SHOULD ALS O BE TREATED AS CURATIVE IN NATURE AND WITH RETROSPECTIVE EFFECT FR OM 1 ST APRIL 2003 I.E. THE DATE EFFECTIVE FROM WHICH SECTION 50C WAS INTRO DUCED. WHILE THE GOVERNMENT MUST BE COMPLIMENTED FOR THE UNPARALLELE D SWIFTNESS WITH WHICH THE EASWAR COMMITTEE RECOMMENDATIONS AS ACCE PTED BY THE GOVERNMENT WERE IMPLEMENTED I AS A JUDICIAL OFFI CER WOULD THINK THIS WAS STILL ONE STEP SHORT OF WHAT OUGHT TO HAVE BEEN DONE INASMUCH AS THE AMENDMENT IN TUNE WITH THE JUDGE MADE LAW OUG HT TO HAVE BEEN EFFECTIVE FROM THE DATE ON WHICH THE RELATED LEGAL PROVISIONS WERE ITA NO. 3354/AHD/2014 SMT KUNDANBEN AMHALAL SHAH VS. ITO A.Y. 2009-10 PAGE 7 OF 10 INTRODUCED. AS I SAY SO IN ADDITION TO THE REASONI NG GIVEN EARLIER IN THIS ORDER I MAY ALSO REFER TO THE OBSERVATIONS OF HON BLE SUPREME COURT THE CASE OF CIT VS ALOM EXTRUSION LTD [(2009) 319 ITR 306 SC)] TO THE FOLLOWING EFFECT: ONCE THIS UNIFORMITY IS BROUGHT ABOUT IN THE FIRST PROVISO THEN IN OUR VIEW THE FINANCE ACT 2003 WHICH IS MADE APPLICABLE BY THE PARLIAMENT ONLY W.E.F. 1ST APRIL 2004 WOULD BECOME CURATIVE IN NATURE HENCE IT WOULD AP PLY RETROSPECTIVELY W.E.F. 1ST APRIL 1988 (I.E. THE DATE ON WHICH THE RELATED LEGAL PROVISION WAS INTRODUCED). SECONDLY IT MAY BE NOTED THAT IN THE CASE OF ALLIED MOTORS (P) LTD. ETC. VS. CIT (1997) 139 C TR (SC) 364: (1997) 224 ITR 677 (SC) THE SCHEME OF S. 43B OF THE ACT CAME TO BE EXAMINED. IN THAT CASE THE QUESTION WHICH AROSE FOR DETERMINATION WA S WHETHER SALES-TAX COLLECTED BY THE ASSESSEE AND PAID AFTER THE END OF THE RELEVANT PREVIOUS YEAR BUT WITHIN THE TIME ALLOWED UNDER THE RELEVANT SALE S-TAX LAW SHOULD BE DISALLOWED UNDER S. 43B OF THE ACT WHILE COMPUTING THE BUSINESS INCOME OF THE PREVIOUS YEAR? THAT WAS A CASE WHICH RELATED TO ASST. YR. 1984-85. THE RELEVANT ACCOUNTING PERIOD ENDED ON 30TH JUNE 1983 . THE ITO DISALLOWED THE DEDUCTION CLAIMED BY THE ASSESSEE WHICH WAS ON ACCO UNT OF SALES-TAX COLLECTED BY THE ASSESSEE FOR THE LAST QUARTER OF T HE RELEVANT ACCOUNTING YEAR. THE DEDUCTION WAS DISALLOWED UNDER S. 43B WHICH AS STATED ABOVE WAS INSERTED W.E.F. 1ST APRIL 1984. IT IS ALSO RELEVAN T TO NOTE THAT THE FIRST PROVISO WHICH CAME INTO FORCE W.E.F. 1ST APRIL 1988 WAS NO T ON THE STATUTE BOOK WHEN THE ASSESSMENTS WERE MADE IN THE CASE OF ALLIED MOT ORS (P) LTD. ETC. (SUPRA). HOWEVER THE ASSESSEE CONTENDED THAT EVEN THOUGH TH E FIRST PROVISO CAME TO BE INSERTED W.E.F. 1ST APRIL 1988 IT WAS ENTITLED TO THE BENEFIT OF THAT PROVISO BECAUSE IT OPERATED RETROSPECTIVELY FROM 1ST APRIL 1984 WHEN S. 43B STOOD INSERTED. THIS IS HOW THE QUESTION OF RETROSPECTIVI TY AROSE IN ALLIED MOTORS (P) LTD. ETC. (SUPRA). THIS COURT IN ALLIED MOTORS (P) LTD. ETC. (SUPRA) HELD THAT WHEN A PROVISO IS INSERTED TO REMEDY UNINTENDED CON SEQUENCES AND TO MAKE THE SECTION WORKABLE A PROVISO WHICH SUPPLIES AN OBVIOUS OMISSION IN THE SECTION AND WHICH PROVISO IS REQUIR ED TO BE READ INTO THE SECTION TO GIVE THE SECTION A REASONABLE INTERPRETA TION IT COULD BE READ RETROSPECTIVE IN OPERATION PARTICULARLY TO GIVE EF FECT TO THE SECTION AS A WHOLE. ACCORDINGLY THIS COURT IN ALLIED MOTORS (P ) LTD. ETC. (SUPRA) HELD THAT THE FIRST PROVISO WAS CURATIVE IN NATURE HENC E RETROSPECTIVE IN OPERATION W.E.F. 1ST APRIL 1988 . IT IS IMPORTANT TO NOTE ONCE AGAIN THAT BY FINANCE ACT 2003 NOT ONLY THE SECOND PROVISO IS D ELETED BUT EVEN THE FIRST PROVISO IS SOUGHT TO BE AMENDED BY BRINGING ABOUT A N UNIFORMITY IN TAX DUTY CESS AND FEE ON THE ONE HAND VIS-A-VIS CONTRIBUTION S TO WELFARE FUNDS OF EMPLOYEE(S) ON THE OTHER. THIS IS ONE MORE REASON W HY WE HOLD THAT THE FINANCE ACT 2003 IS RETROSPECTIVE IN OPERATION. M OREOVER THE JUDGMENT IN ALLIED MOTORS (P) LTD. ETC. (SUPRA) IS DELIVERED BY A BENCH OF THREE LEARNED JUDGES WHICH IS BINDING ON US. ACCORDINGLY WE HOL D THAT FINANCE ACT 2003 WILL OPERATE RETROSPECTIVELY W.E.F. 1ST APRIL 1988 (WHEN THE FIRST PROVISO STOOD INSERTED). LASTLY WE MAY POINT OUT THE HARDSHIP AN D THE INVIDIOUS DISCRIMINATION WHICH WOULD BE CAUSED TO THE ASSESSE E(S) IF THE CONTENTION OF THE DEPARTMENT IS TO BE ACCEPTED THAT FINANCE ACT 2003 TO THE ABOVE EXTENT OPERATED PROSPECTIVELY. TAKE AN EXAMPLEIN THE PRES ENT CASE THE RESPONDENTS HAVE DEPOSITED THE CONTRIBUTIONS WITH T HE R.P.F.C. AFTER 31ST MARCH (END OF ACCOUNTING YEAR) BUT BEFORE FILING OF THE RETURNS UNDER THE IT ACT AND THE DATE OF PAYMENT FALLS AFTER THE DUE DAT E UNDER THE EMPLOYEES' PROVIDENT FUND ACT THEY WILL BE DENIED DEDUCTION F OR ALL TIMES. IN VIEW OF THE ITA NO. 3354/AHD/2014 SMT KUNDANBEN AMHALAL SHAH VS. ITO A.Y. 2009-10 PAGE 8 OF 10 SECOND PROVISO WHICH STOOD ON THE STATUTE BOOK AT THE RELEVANT TIME EACH OF SUCH ASSESSEE(S) WOULD NOT BE ENTITLED TO D EDUCTION UNDER S. 43B OF THE ACT FOR ALL TIMES. THEY WOULD LOSE THE B ENEFIT OF DEDUCTION EVEN IN THE YEAR OF ACCOUNT IN WHICH THEY PAY THE C ONTRIBUTIONS TO THE WELFARE FUNDS WHEREAS A DEFAULTER WHO FAILS TO PA Y THE CONTRIBUTION TO THE WELFARE FUND RIGHT UPTO 1ST APRIL 2004 AND WH O PAYS THE CONTRIBUTION AFTER 1ST APRIL 2004 WOULD GET THE B ENEFIT OF DEDUCTION UNDER S. 43B OF THE ACT. IN OUR VIEW THEREFORE FI NANCE ACT 2003 TO THE EXTENT INDICATED ABOVE SHOULD BE READ AS RETROSPEC TIVE. IT WOULD THEREFORE OPERATE FROM 1ST APRIL 1988 WHEN THE F IRST PROVISO WAS INTRODUCED. IT IS TRUE THAT THE PARLIAMENT HAS EXPLICITLY STAT ED THAT FINANCE ACT 2003 WILL OPERATE W.E.F. 1ST APRIL 2004. HOWEVER THE MATTER BEFORE US INVOLVES THE PRINCIPLE OF CONSTRUCTION TO BE PLACED ON THE PROVISIONS OF FINANCE ACT 2003. [9] SO FAR AS THE AMENDMENT TO SECTION 50C BEING RE TROSPECTIVE IN EFFECT IS CONCERNED THERE IS NO DOUBT ABOUT THE LE GAL POSITION. I HOLD THE PROVISOS TO SECTION 50C BEING EFFECTIVE FROM 1 ST APRIL 2003. THIS IS PRECISELY WHAT THE LEARNED COUNSEL HAS PRAYED FOR. IN HIS DETAILED WRITTEN SUBMISSIONS HE HAS MADE OUT OF A STRONG CA SE FOR THE AMENDMENT TO SECTION 50C BEING TREATED AS RETROSPEC TIVE AND WITH EFFECT FROM 1 ST APRIL 2003. THE PLEA OF THE ASSESSEE IS INDEED WEL L TAKEN AND DESERVES ACCEPTANCE. WHAT FOLLOWS IS THIS. THE MATTER WILL NOW GO BACK TO THE ASSESSING OFFICER. IN CASE HE FINDS THA T A REGISTERED AGREEMENT TO SELL AS CLAIMED BY THE ASSESSEE WAS ACTUALLY EXECUTED ON 29.6.2005 AND THE PARTIAL SALE CONSIDERATION WAS RECEIVED THROUGH BANKING CHANNELS THE ASSESSING OFFICER SO FAR AS COMPUTATION OF CAPITAL GAINS IS CONCERNED WILL ADOPT STAMP DUTY V ALUATION AS ON 29.6.2005 OF THE PROPERTY SOLD AS IT EXISTED AT TH AT POINT OF TIME. IN CASE THE ASSESSEE IS NOT CONTENT WITH THIS VALUE BE ING ADOPTED UNDER SECTION 50C HE WILL BE AT LIBERTY TO SEEK THE MATT ER BEING REFERRED TO THE DVO FOR VALUATION AGAIN AS ON 29.6.2005 OF TH E SAID PROPERTY. AS A COROLLARY THERETO THE SUBSEQUENT DEVELOPMENTS IN RESPECT OF THE PROPERTY SOLD (E.G. THE CONVERSION OF USE OF LAND) ARE TO BE IGNORED. IT IS ON THIS BASIS THAT THE CAPITAL GAINS WILL BE RECOMP UTED. WITH THESE DIRECTIONS THE MATTER STANDS RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR ADJUDICATION DE NOVO AFTER GIVING AN O PPORTUNITY OF HEARING TO THE ASSESSEE AND BY WAY OF A SPEAKING ORDER. I O RDER SO. 4. LEARNED COUNSEL THEN ALSO INVITES OUR ATTENTION TO A DECISION OF HONBLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS SHIMBHU MEHRA [2016] 65 TAXMANN.COM 142 (ALLAHABAD) IN SUPPORT OF THE SAME PROPOSITION. LEARNED COUNSEL THEN INVITES OUR ATTENTION TO THE COPY OF T HE AGREEMENT TO SALE WHICH IS PLACED AT PAGE NOS. 1-8 OF THE PAPER BOOK AS ALS O THE COPY OF THE SALE DEED WHICH IS PLACED AT PAGE NOS. 9-30 OF THE PAPER-BOOK . LEARNED COUNSEL FURTHER POINTS OUT THAT THE DATES ON WHICH RELEVANT PAYMENT S ARE MADE ARE CLEARLY SET OUT IN THE SALE DEED AT INTERNAL PAGE NO.12 WHICH ARE IN ACCORDANCE WITH THE AGREEMENT TO SALE. LEARNED COUNSEL THUS CONTENDS T HAT THE BONAFIDES OF THE AGREEMENT TO SALE IN THE LIGHT OF THE DATES ON WHI CH THE PAYMENTS ARE MADE CANNOT BE DOUBTED. ON THE STRENGTH OF THIS SUBMISS ION WE ARE URGED TO REMIT ITA NO. 3354/AHD/2014 SMT KUNDANBEN AMHALAL SHAH VS. ITO A.Y. 2009-10 PAGE 9 OF 10 THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER WIT H THE DIRECTION THAT THE STAMP DUTY VALUATION AS ON THE DATE ON WHICH THE AGREEMEN T TO SALE WAS ENTERED INTO SHOULD BE TAKEN FOR THE PURPOSES OF APPLICATION OF SECTION 50C AND NOT THE DATE ON WHICH THE SALE DEED WAS ACTUALLY EXECUTED. 5. LEARNED DEPARTMENTAL REPRESENTATIVE ON THE OTHE R HAND RELIES UPON THE ORDERS OF THE AUTHORITIES BELOW AND SUBMITS THA T THE PROVISIONS OF THE STATUTE ARE CLEAR AND UNAMBIGUOUS INASMUCH AS THE R ELEVANT DATE FOR THE PURPOSE OF SECTION 50C STAMP DUTY VALUE IS THE DATE ON WHICH THE SALE DEED IS ENTERED INTO. 6. HAVING HEARD THE RIVAL CONTENTIONS AND HAVING PE RUSED THE MATERIAL ON RECORD WE FIND THAT THE ISSUE IN APPEAL IS SQUAREL Y COVERED BY THE TRIBUNALS DECISION IN THE CASE OF DHARAMSHIBHAI SONANI (SUPRA ) WHICH HAS BEEN SUBSEQUENTLY FOLLOWED BY LARGE NUMBER OF DIVISION B ENCH OF THIS TRIBUNAL. AS RIGHTLY HELD BY THE TRIBUNAL IN THE CASE OF DHARAMS HIBHAI SONANI (SUPRA) THE AMENDMENT BROUGHT ABOUT BY FINANCE ACT 2016 PROVI DING THAT WHERE THE DATE OF THE AGREEMENT FIXING THE AMOUNT OF CONSIDER ATION AND THE DATE OF REGISTRATION FOR THE TRANSFER OF THE CAPITAL ASSET ARE NOT THE SAME THE VALUE ADOPTED OR ASSESSED OR ASSESSABLE BY THE STAMP VALU ATION AUTHORITY ON THE DATE OF AGREEMENT MAY BE TAKEN FOR THE PURPOSES OF COMPUTING FULL VALUE OF CONSIDERATION FOR SUCH TRANSFER IS RETROSPECTIVE IN EFFECT AND APPLIES FROM 1 ST APRIL 2003. THE DETAILED REASONS FOR COMING TO THI S CONCLUSION ARE ALREADY SET OUT IN THE EXTRACT FROM THE TRIBUNALS DECISION QUO TED EARLIER IN THIS ORDER. 7. IN VIEW OF THESE DISCUSSIONS AND BEARING IN MIND ENTIRETY OF THE CASE WE ARE OF THE CONSIDERED VIEW THAT THE PLEA OF THE LEARNED COUNSEL INDEED MERITS ACCEPTANCE. WE THEREFORE DEEM IT FIT AND PROPER TO REMIT THE ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR ADJUDICATION DE NOVO IN THE LIGHT OF OBSERVATIONS ABOVE AND THE LEGAL POSITION SET OUT I N DHARAMSHIBHAI SONANI (SUPRA). ORDERED ACCORDINGLY. 4. WE SEE NO REASONS TO TAKE ANY OTHER VIEW OF TH E MATTER THAN THE VIEW SO TAKEN BY US AS ABOVE. OUR OBSERVATIONS AS ABOVE WILL APPL Y MUTATIS MUTANDIS IN THIS CASE AS WELL. RESPECTFULLY FOLLOWING OUR VIEWS AS ABOVE WE REMIT THE MATTER TO THE FILE OF THE ASSESSING OFFICER IN THIS CASE AS WELL. 5. IN THE RESULT APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT TODAY ON THIS 30 TH TH DAY OF NOVEMBER 2017. SD/- SD/- MAHAVIR PRASAD PRAMOD KUMAR (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) AHMEDABAD THE 30 TH DAY OF NOVEMBER 2017 **BT* ITA NO. 3354/AHD/2014 SMT KUNDANBEN AMHALAL SHAH VS. ITO A.Y. 2009-10 PAGE 10 OF 10 COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER TRUE COPY ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES AHMEDABAD 1. DATE OF TAKING DICTATION: .. .3 PAGES DICTATION PAD ATTACHED 30.11.2017 LEAD CASE ITA NO.3353/AHD/2014. 2. DATE OF TYPING & DRAFT ORDER PLACED BEFORE THE DI CTATING MEMBER: ... 30.11.2017.................... ..... 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S.: ... 30.11.2017...... 4. DT. ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT: . . 30.11.2017. ..... 5. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK: . .... . 30.11.2017........................ 6. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK: ..... 7. THE DT. ON WHICH THE FILE GOES TO THE ASTT. REGISTR AR FOR SIGNATURE ON THE ORDER: .................. ....... 8. DATE OF DESPATCH OF THE ORDER: ................. ........