WELFARE PROPERTIES PVT. LTD., MUMBAI v. DCIT 13(3)(1), MUMBAI

P A G E | 1 ITA NO.4934/MUM/2018 A.Y. 2015 - 16 WELFARE PROPERTIES P. LTD. VS. DCIT - 13(3)(1) IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH MUMBAI BEFORE SHRI S.RIFAUR REHMAN ACCOUNTANT MEMBER AND SHRI RAVISH SOOD JUDICIAL MEMBER ITA NO.4934 /MUM/2018 (ASSESSMENT YEAR: 2015 - 16 ) WELFARE PROPERTIES P. LTD. 102 - 103 A - WING SHREE SAVGAN CHS LTD. 1 ST FLOOR RTO LANE NEAR AMBEDKAR HALL FOUR BUNGALOW ANDHERI (W) MUMBAI 400 053 VS. DCIT - 13(3)(1) 2 ND FLOOR AAYAKAR BHAWAN M.K. ROAD MUMBAI 400 020 PAN AAACW1922C (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI R.C. JAIN C.A RESPONDENT BY: SHRI V. VINOD KUMAR D.R DATE OF HEARING: 20 .11.2019 DATE OF PRONOUNCEMENT: 2 9 .11.2019 O R D E R PER RAVISH SOOD JM: THE PRESENT APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A) - 21 MUMBAI DATED 29.06.2018 WHICH IN TURN ARISES FROM THE ORDER PASSED BY THE A.O UNDER SEC. 143(3) OF THE INCOME TAX ACT 1961 (FOR SHORT ACT) DATED 12.12.2017. THE ASSESSEE HAS ASSAILED THE IMPUGNED ORDER ON THE FOLLOWING GROUNDS OF APPEAL BEFORE US: 1. THE LD. CIT (A) ERRED IN UPHOLDING THE ADDITION OF RS.448350/ - U/S 43CA OF THE ACT TO THE CONSIDERATION RECEIVED IN RESPECT OF AGREEMENT TO SALE EXECUTED DURING THE YEAR AND BROUGHT TO TAX AS PER REVENUE RECOGNISED ON PERC ENTAGE COMPLETION METHOD. 1.I IN SO DOING HE DID NOT APPRECIATE THE JUDGEMENT OF THE APEX COURT IN THE CASE OF C. B. GAUTAM VS. UNION OF INDIA [199 ITR 530 (SC)] RENDERED IN RESPECT O F PRESUMPTIVE PURCHASE OF PROPERT Y UNDER CHAPTER XX - C OF THE ACT WHEREI N THE APEX COURT ACCEPTED THE TOLERANCE LIMIT OF 15% WHICH TOLERANCE LIMIT WAS FOLLOWED BY VARIOUS BENCHES OF THE TRIBUNAL THROUGHOUT THE COUNTRY WHILE ADJUDICATING THE ISSUES WITH REGARD TO PROVISIONS OF SECTION 50 - C OF THE ACT ON SALE OF CAPITAL ASSET NA MELY LAND OR BUILDING OR BOTH. P A G E | 2 ITA NO.4934/MUM/2018 A.Y. 2015 - 16 WELFARE PROPERTIES P. LTD. VS. DCIT - 13(3)(1) 1.II. THE LD . CIT (A) DID NOT APPRECIATE THAT SUB - SECTION 1 OF SECTION 43CA IS IN PARAMETERIA WITH SEC. 50(C)(1) OF THE ACT EXCEPT THAT SEC.43CA(1) APPLIES TO STOCK - IN - TRADE WHILE SECTION 50C(1) APPLIES TO SALE OF CAPITAL ASSET AND THEREFORE THE PRINCIPLES LAID DOWN IN THE CASE OF C .B. GAUTAM (SUPRA) FOLLOWED BY BENCHES OF ITAT THROUGHOUT THE COUNTRY WITH REGARD TO PROVISIONS OF SEC.50C OF THE ACT APPLIES WITH FULL FORCE TO SEC.43CA OF THE ACT WHICH IS THE FACT IN THE INS TANT CASE. 1.III. THE LD. CIT (A) FURTHER DID NOT APPRECIATE THAT IN THE DECISIONS RELIED UPON BY THE APPELLANT THE STAMP DUTY VALUE ON REFERENCE TO DVO WAS SCALED DOWN AND THE APPELLATE AUTHORITY FURTHER REDUCED THE VALUE AS DETERMINED BY DVO BASED O N THE DECISION IN THE CASE OF C. B GAUTAM (SUPRA). 2. THE CIT (A) IN THE CIRCUMSTANCES OUGHT TO HAVE DELETED THE ADDITION OF RS.448350/ - AS THE DIFFERENCE BETWEEN THE STAMP DUTY VALUE AND THE AGREEMENT VALUE IN PERCENTAGE TERMS WORKS OUT TO 9.56% OF THE ST AMP DUTY VALUE WHICH IS LESS THAN THE TOLERANCE LIMIT OF 15% AS ACCEPTED BY THE SUPREME COURT IN THE CASE OF C. B . GAUTAM (SUPRA). 2. BRIEFLY STATED THE ASSESSEE COMPANY WHICH IS ENGAGED IN THE BUSINESS OF REAL ESTATE ACTIVITIES TRADING AND DEVELOPMENT OF PROPERTIES HAD E - FILED ITS RETURN OF INCOME FOR A.Y. 2015 - 16 ON 30.09.2015 D ECLARING ITS TOTAL INCOME AT RS. 66 99 670/ - . RETURN OF INCOME FILED BY THE ASSESSEE WAS PROCESSED AS SUCH UNDER SEC. 143(1) OF THE ACT. SUBSEQUENTLY THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY ASSESSMENT UNDER SEC.143(2) OF THE ACT. 3. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS ON A PERUSAL OF THE TAX AUDIT REPORT IT WAS OBSERVED BY THE A.O THAT THE ASSESSEE COMPANY DURING THE YEAR UNDER CONSIDERATION HAD TRAN SFERRED FLATS NOS. 401 & 402 4 TH FLOOR VRINDAVAN CHSL PLOT NO.54 CHURCH ROAD VILLE PARLE (W EST ) MUMBAI FOR A SALE CONSIDERATION OF RS.42 40 000/ - . ON A PERUSAL OF THE RECORDS IT WAS OBSERVED BY THE A.O THAT THE AFORESAID SALE CONSIDERATION WAS LOWE R THAN THE VALUE OF RS. 74 23 500/ - THAT WAS ADOPTED BY THE S UB - REGISTRAR GOVERNMENT OF MAHARASHTRA . IN THE BACKDROP OF THE AFORESAID FACTS THE A.O CALLED UPON THE ASSESSEE TO EXPLAIN AS TO WHY THE PROVISIONS OF SEC. 43CA OF THE ACT MAY NOT BE INVOKED A ND THE VALUE ADOPTED BY THE STAMP VALUATION AUTHORITY FOR THE PURPOSE OF PAYMENT OF STAMP DUTY MAY NOT BE DEEMED AS THE FULL VALUE OF CONSIDERATION RECEIVED AS A RESULT OF SUCH TRANSFER. IN REPLY IT WAS SUBMITTED BY THE ASSESSEE THAT THE DISCLOSURE MADE BY THE AUDITORS IN ITEM NO. 17 OF FORM NO.3CD WAS INCORRECT. I T WAS THE CLAIM OF THE ASSESSEE THAT A GREEMENTS WERE REGISTERED IN RESPECT OF THE ADDITIONAL AREA PURCHASED BY THE TENANTS BESIDES THE AREA TO WHICH THEY WERE ENTITLED FREE OF COST PURSUANT TO THE RE - DEVELOPMENT AGREEMENT THAT WAS ENTERED INTO BY THEM WITH THE SOCIETY. IN SUM AND SUBSTANCE IT WAS THE CLAIM OF THE ASSESSEE THAT THE STAMP DUTY VALUE COMPRISED OF THE COST OF CONSTRUCTION OF THE AREA WHICH WAS AGREED TO BE GIVEN FREE OF P A G E | 3 ITA NO.4934/MUM/2018 A.Y. 2015 - 16 WELFARE PROPERTIES P. LTD. VS. DCIT - 13(3)(1) COST TO THE TENANTS AND ALSO THE COST OF LAND BUILDING AND THE CONSTRUCTION COST OF THE ADDITIONAL AREA THAT WAS PURCHASED B Y THE SAID TENANT. ON THE BASIS OF HIS AFORESAID CLAIM IT WAS SUBMITTED BY THE ASSESSEE THAT AS THE SALE CONSIDERATION AS PER THE A GREEMENT WAS ONLY IN RESPECT OF THE ADDITIONAL AREA PURCHASED BY THE TENANTS THEREFORE WHAT COULD BE CONSIDERED FOR THE PURPOSE OF APPLYING SEC. 43CA WAS THE STAMP DUTY VALUE OF SUCH ADDITIONAL AREA WHICH A S PER THE ASSESSEE WORKED OUT AT RS.46 88 350/ - AND NOT RS.74 23 500/ - THAT WAS WRONGLY REPORTED IN THE FORM NO. 3CD. AS SUCH I T WAS SUBMITTED BY THE ASSESSEE THAT A S THE STAMP DUTY VALUE ADOPTED FOR THE ADDITIONAL AREA PURCHASED BY THE TENANTS WORKED OUT AT RS. 46 88 350/ - THEREFORE CONSIDERING THE ACTUAL SALE CONSIDERATION OF RS. 42 40 000/ - THE DEEMED INCOME U NDER SEC . .4 3CA WORKED OUT AT RS. 4 48 350/ - [RS.46 88 350/ - ( - ) RS.42 40 000/ - ]. AT THE SAME TIME A S THE AFORESAID DIFFERENCE WORKED OUT TO 9.56% OF THE STAMP DUTY VALUE WHICH WAS LESS THAN 15% THEREFORE IT WAS SUBMITTED BY THE ASSESSEE THAT THE SAME IN THE BACKDROP OF THE JUDICIAL PRONOUNCEMENTS WAS T O BE IGNORED AND NO ADDITION WAS CALLED FOR IN ITS CASE . IN SUM AND SUBSTANCE IT WAS THE CLAIM OF THE ASSESSEE THAT AS THE DIFFERENCE BETWEEN THE ACTUAL SALE CONSIDERATION RECEIVED AND THE VALUE ADOPTED BY THE STAMP VALUATION AUTHORITY WAS LESS THAN 15% THEREFORE NO ADDITION UNDER SEC.43CA WAS CALLED FOR IN ITS CASE . ALTERNATIVELY IT WAS SUBMITTED BY THE ASSESSEE THAT IF AT ALL THE DEEMED INCOME OF RS.4 48 350/ - WAS TO BE ASSESSED THE SAME COULD BE BROUGHT TO TAX ONLY IN THE YEAR WHEN THE REVENUE WAS RECOGNISED IN RESPECT OF THE AFORESAID FLATS AS PER THE METHOD OF ACCOUNTING REGU LARLY FOLLOWED BY THE ASSESSEE. 4. THE A.O AFTER DELIBERATING ON THE CONTE NTIONS ADVANCED BY THE ASSESSEE WAS IN AGREEMENT WITH ITS CLAIM THAT THE STAMP DUTY VALUE /SEGMENT VALUE OF THE ADDITIONAL AREA PURCHASED BY THE TENANTS WAS TO BE TAKEN AT RS. 46 88 350/ - . HOWEVER THE A.O WAS OF THE VIEW THAT AS THE DIFFERENCE BETWEEN THE F . M . V OF THE AFORESAID PROPERTY (AS ADOPTED BY THE STAMP VALUATION AUTHORITY) AND THE ACTUAL SALE CONSIDERATION OF THE FLATS REGISTERED DURING THE YEAR WORKED OUT AT RS. 4 48 350/ - THEREFORE THE SAME AS PER THE PROVISIONS OF SEC. 43CA WAS TO BE ADDED TO THE CONSIDERATION RECEIVED BY THE ASSESSEE . AT THE SAME TIME IT WAS OBSERVED BY THE A.O THAT THE AFORESAID AMOUNT WAS TO BE BROUGHT TO TAX A S PER THE PERCENTAGE COMPLETION METHOD THAT WAS BEING FOLLOWED BY THE ASSESSEE . P A G E | 4 ITA NO.4934/MUM/2018 A.Y. 2015 - 16 WELFARE PROPERTIES P. LTD. VS. DCIT - 13(3)(1) 5. AGGRIEVED THE ASSESSEE ASSAILED THE ASSESSMENT FRAMED BY THE A.O BEFORE THE CIT(A). IN THE COURSE OF THE PROCEEDINGS BEFORE THE FIRST APPELLATE AUTHORITY IT WAS SUBMITTED BY THE ASSESSEE THAT AS THE DIFFERENCE BETWEEN THE STAMP DUTY VALUE AND THE ACTUAL SALE CONSIDERATION RECEIVED IN PERCENTAGE TERMS WORKED OUT SUBSTANTIALLY LESS THAN 15% THEREFORE THE SAME OUGHT TO BE IGNORED AND NO ADJUSTMENT WOULD BE CALLED FOR AS REGARDS THE SALE CO NSIDERATION RECEIVED BY THE ASSESSEE. HOWEVER THE CIT (A) WAS NOT PERSUADED TO SUBSCRIBE TO THE CONTENTIONS ADVAN CED BY THE ASSESSEE AND UPHELD THE ADDITION OF RS.4 48 350/ - MADE BY THE A.O. 6. THE ASSESSEE BEING AGGRIEVED WITH THE ORDER OF THE CIT(A) HAS CARRIED THE MATTER IN APPEAL BEFORE US. THE LD. AUTHORIZED REPRESENTATIVE (FOR SHORT A.R.) FOR THE ASSESSEE TOOK US THROUGH THE FACTS OF THE CASE. IT WAS REITERATED BY THE LD. A.R THAT AS THE DIFFERENCE BETWEEN THE STAMP DUTY VALUE I.E RS.46 88 350/ - AN D THE ACTUAL SALE CONSIDERATION OF RS. 42 40 000/ - RECEIVED BY THE ASSESSEE ON THE TRANSFER OF THE AFORESAID PROPERTY WAS LESS THAN 15% THEREFORE AS HAD CONSISTENTLY BEEN HELD IN VARIOUS JUDICIAL PRONOUNCEMENTS THE SAID DIFFE RENCE WAS TO BE IGNORED AND NO ADDITION WAS CALLED FOR IN THE HANDS OF THE ASSESSEE. IN SUPPORT OF HIS AFORESAID CONTENTION THE LD. A.R HAD RELIED ON CERTAIN JUDICIAL PRONOUNCEMENT S VIZ. (I) C.B. GAUTAM VS. UNION OF INDIA & ORS. 1993 (1) SCC 78; (II) RAHUL CONSTRUCTION VS. DY. CIT (2010) 38 DTR (PUNE) (TRIB.) 19; (III) ITO WARD - 2(3) KOLKATA VS. M/S L.G.M LTD. KO L KATA (ITA NO.267/KO L /2013); (IV) M/S JOHN FOWLER (I) PVT. LTD. VS. DY. CIT 1(2) MUMBAI ITA 7545/MUM/2014; AND (V) SMT.SEETA BAI KHETAN S. ITO W ARD 6(3) JAIPUR (ITA NO.826/JP/2013). 7. PER CONTRA THE LD. DEPARTMENTAL REPRESENTATIVE (FOR SHORT D.R) RELIED ON THE ORDERS OF THE LOWER AUTHORITIES. 8. WE HAVE HEARD THE AUTHORIZED REPRESENTATIVES FOR BOTH THE PARTIES PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIAL AVAILABLE ON RECORD AS WELL AS THE JUDICIAL PRONOUNCEMENTS RELIED UPON BY THEM. AFTER DELIBERATING AT LENGTH ON THE CONTENTIONS ADVANCED BY THE LD. A.R WE ARE UNABLE TO PERSUADE OURSELVES TO SUBSCRIBE TO THE SAME. IT IS THE CLAIM OF THE LD. A.R THAT AS THE DIFFERENCE BETWEEN THE VALUE ADOPTED BY THE S TAMP V ALUATION A UTHORITY AND THE ACTUAL SALE CONSIDERATION RECEIVED BY THE ASS ESSEE ON THE TRANSFER OF THE AFORESAID PROPERTY WORKS OUT TO 9.56% I.E LESS THAN 15% THEREFORE NO ADDITION OF THE IMPUGNED P A G E | 5 ITA NO.4934/MUM/2018 A.Y. 2015 - 16 WELFARE PROPERTIES P. LTD. VS. DCIT - 13(3)(1) DIFFERENCE OF RS.4 48 350/ - WAS CALLED FOR IN THE HANDS OF THE ASSESSEE. IN SUPPORT OF HIS AFORESAID CONTENTION THE LD. A.R HAD RE LIED ON CERTAIN JUDICIAL PRONOUNCEMENT S TO WHICH WE WOULD HEREINAFTER REFER. BEFORE ADVERTING ANY FURTHER IT WOULD BE RELEVANT TO CULL OUT THE PROVISIONS OF SEC. 43CA AS WERE AVAILABLE ON THE STATUTE DURING THE YEAR UNDER CONSIDERATION AND READ AS UNDER: [SPECIAL PROVISION FOR FULL VALUE OF CONSIDERATION FOR TRANSFER OF ASSETS OTHER THAN CAPITAL ASSETS IN CERTAIN CASES. 43CA. (1) . WHERE THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF THE TRANSFER BY AN ASSESSEE OF AN ASSET (OTHER THAN A CAPITAL ASSET) BEING LAND OR BUILDING OR BOTH IS LESS THAN THE VALUE ADOPTED OR ASSESSED OR ASSESSABLE BY A AUTHORITY OF A STATE GOVERNMENT FOR THE PURPOSE OF PAYMENT OF STAMP DUTY IN RESPECT OF SUCH TRAN SFER THE VALUE SO ADOPTED OR ASSESSED OR ASSESSABLE SHALL FOR THE PURPOSES OF COMPUTING PROFITS AND GAINS FROM TRANSFER OF SUCH ASSET BE DEEMED TO BE THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF SUCH TRANSFER. (2) . THE PROVIS IONS OF SUB - SECTION (2) AND SUB - SECTION (3) OF SECTION 50C SHALL SO FAR AS MAY BE APPLY IN RELATION TO DETERMINATION OF THE VALUE ADOPTED OR ASSESSED OR ASSESSABLE UNDER SUB - SECTION (1). (3) . WHERE THE DATE OF AGREEMENT FIXING THE VALUE OF CONSIDERATION FOR TRANSFER OF THE ASSET AND THE DATE OF REGISTRATION OF SUCH TRANSFER OF ASSET ARE NOT THE SAME THE VALUE REFERRED TO IN SUB - SECTION (1) MAY BE TAKEN AS THE VALUE ASSESSABLE BY ANY AUTHORITY OF A STATE GOVERNMENT FOR THE PURPOSE OF PAYMENT OF STAMP DUTY IN RESPECT OF SUCH TRANSFER ON THE DATE OF THE AGREEMENT. (4) . THE PROVISIONS OF SUB - SECTION (3) SHALL APPLY ONLY IN A CASE WHERE THE AMOUNT OF CONSIDERATION OR A PART THEREOF HAS BEEN RECEIV ED 43A [ BY ANY MODE OTHER THAN CASH ] ON OR BEFORE THE DATE OF AGREEMENT FOR TRANSFER OF THE ASSET.] IN THIS REGARD WE MAY HEREIN OBSERVE THAT VIDE THE FINANCE ACT 2018 W.E F 01.04.2019 THE LEGISLATURE IN ALL ITS WISDOM HAS INSERTED A PROVISO TO SUB - SECTION (1) OF SEC.43CA WHICH READS AS UNDER: PROVIDED THAT WHERE THE VALUE ADOPTED OR ASSESSED OR ASSESSABLE BY THE AUTHORITY FOR THE PURPOSE OF PAYMENT OF STAMP DUTY DOES NOT EXCEED ONE HUNDRED AND FIVE PER CENT OF THE CONSIDERATION RECEIVED OR AC CRUING AS A RESULT OF THE TRANSFER THE CONSIDERATION SO RECEIVED OR ACCRUING AS A RESULT OF THE TRANSFER SHALL FOR THE PURPOSES OF COMPUTING PROFITS AND GAINS FROM TRANSFER OF SUCH ASSET BE DEEMED TO BE THE FULL VALUE OF THE CONSIDERATION. ON A PERUSAL OF THE AFORESAID STATUTORY PROVISION I.E SEC.43CA WE FIND THAT NO TOLERA NCE LIMIT OF 15% BETWEEN THE VALUE ADOPTED BY THE S TAMP V ALUATION A UTHORITY AND THE ACTUAL SALE CONSIDERATION RECEIVED ON THE TRANSFER OF THE ASSET (OTHER THAN A CAPITAL ASSET) BEING LAND OR P A G E | 6 ITA NO.4934/MUM/2018 A.Y. 2015 - 16 WELFARE PROPERTIES P. LTD. VS. DCIT - 13(3)(1) BUILDING OR BOTH WAS THEREIN CONTEMPLATED. ON THE CONTRARY A PLAIN READING OF THE AFORESAID STATUTORY PROVISION REVEALED THAT IF THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF THE TRANSFER BY THE ASSESSEE OF AN ASSET (OTHER THAN A CAPITAL ASSET) BEING LAND OR BUILDING OR BOTH WAS LESS THAN THE VALUE ADOPTED OR ASSESSED OR ASSESSABLE BY A N AUTHORITY OF A STATE GOVERNMENT FOR THE PURPOSE OF PAYMENT OF STAMP DUTY IN RESPECT OF SUCH TRANSFER THEN THE VALUE SO ADOPTED OR ASSESS ED OR ASSESSABLE WAS MANDATORILY TO BE DEEMED AS THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF SUCH TRANSFER FOR THE PURPOSES OF COMPUTING PROFITS AND GAINS FROM TRANSFER OF SUCH ASSET. IN FACT A PERUSAL OF THE PROVISO MADE AVAILABLE IN SUB - SECTION (1) OF SEC.43CA VIDE THE FINANCE ACT 2018 W.E.F 01.04.2019 THEREIN REVEALS THAT THE LEGISLATURE HAD FOR THE VERY FIRST TIME PROVIDE D FOR A TOLERA NCE LIMIT OF 5% DIFFERENCE BETWEEN THE VALUE ADOPTED BY THE S TAMP V ALUATION A UTHORITY AND THE ACTUAL CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF TRANSFER OF THE ASSET (OTHER THAN A CAPITAL ASSET) . OUR AFORESAID VIEW THAT PRIOR TO INCORPORATION OF THE PROVISO TO SUB - SECTION (1) OF SEC. 43CA VIDE THE FINANCE ACT 2018 W .E.F 01.04.2019 THERE WAS NO TOLERA NCE LIMIT ENVISAGED IN SEC.43CA AS REGARDS THE DIFFERENCE BETWEEN THE VALUE ADOPTED BY THE STAMP VALUATION AUTHORITY AND THE ACTUAL SALE CONSIDERATION RECEIVED BY THE ASSESSEE ON THE TRANSFER OF THE ASSET (OTHER THAN A CAPITAL ASSET) IS FORTIFIED FROM A PERUSAL OF THE EXPLANATORY NOTES TO THE PROVISIONS OF THE FINANCE ACT 2018 WHICH READS AS UNDER : EXPLANATORY NOTES TO THE PROVISIONS OF THE FINANCE ACT 2018 [CIRCULAR NO. /2018 DATED THE 26TH OF DECEMBER 2018 ] 16. RATIONALIZATION OF SECTION 43CA SECTION 50C AND SECTION 56 16.1 BEFORE AMENDMENT BY THE ACT FOR COMPUTING INCOME FROM BUSINESS PROFITS (SECTION 43CA) CAPITAL GAINS (SECTION 50C) AND OTHER SOURCES (SECTION 56) ARISIN G OUT OF TRANSACTIONS IN IMMOVABLE PROPERTY THE HIGHER OF SALE CONSIDERATION OR STAMP DUTY VALUE WAS ADOPTED. THE DIFFERENCE WAS TAXED AS INCOME BOTH IN THE HANDS OF THE PURCHASER AND THE SELLER. 16.2 IT HAS BEEN POINTED OUT THAT THE VARIATION BETWEEN STA MP DUTY VALUE AND ACTUAL CONSIDERATION RECEIVED CAN OCCUR IN RESPECT OF SIMILAR PROPERTIES IN THE SAME AREA BECAUSE OF A VARIETY OF FACTORS INCLUDING SHAPE OF THE PLOT OR LOCATION. 16.3 IN ORDER TO MINIMIZE HARDSHIP IN CASE OF GENUINE TRANSACTIONS IN THE REAL ESTATE SECTOR SECTION 43CA SECTION 50C AND SECTION 56 OF THE INCOME - TAX ACT HAVE BEEN AMENDED TO PROVIDE THAT NO ADJUSTMENTS SHALL BE MADE IN A CASE WHERE THE VARIATION BETWEEN STAMP DUTY VALUE AND THE SALE CONSIDERATION IS NOT MORE THAN FIVE PER CE NT OF THE SALE CONSIDERATION. P A G E | 7 ITA NO.4934/MUM/2018 A.Y. 2015 - 16 WELFARE PROPERTIES P. LTD. VS. DCIT - 13(3)(1) 16.4 APPLICABILITY ; THESE AMENDMENTS TAKE EFFECT FROM 1ST APRIL 2019 AND WILL ACCORDINGLY APPLY IN RELATION TO THE ASSESSMENT YEAR 2019 - 20 AND SUBSEQUENT ASSESSMENT YEARS. 9. ACCORDINGLY IN OUR CONSIDERED VIEW THERE IS NO SUBSTANCE IN THE CLAIM OF THE ASSESSEE THAT AS PER THE PRE - AMENDED PROVISION OF SEC.43CA IN CASE THE DIFFERENCE BETWEEN THE VALUE ADOPTED BY THE S TAMP V ALUATION A UTHORITY AND THE ACTUAL SALE CONSIDERATION W AS LESS THAN 15% THEN THE SAME WAS TO BE IGNORED AND NO ADDITION ON THE SAID COUNT WAS CALLED FOR IN THE HANDS OF THE ASSESSEE. AS PER THE DOCTRINE OF STATUTORY INTERPRETATION NO WORD HOWSOEVER MEANINGFUL IT MAY SO APPEAR CAN BE ALLOWED TO BE READ INTO A STATUTORY PROVISION UNLESS THE SAME HAD SPECIFICALLY BEEN THERE IN PROVIDED FOR. AS OBSERVED BY US HEREINABOVE IT IS ONLY VIDE THE FINANCE ACT 2018 W.E.F 01.04.2019 THAT AS PER THE PROVISO INCORPORATED IN SEC. 43CA(1) THAT THE LEGISLATURE IN ALL ITS WISDOM HAD PROVIDED FOR A TOLERA NCE LIMIT OF 5% AS REGARDS THE DIFFERENCE BETWEEN THE VALUE ADOPTED BY THE S TAMP V ALUATION A UTHORITY AND THE ACTUAL CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF TRANSFER OF TH E ASSET (OTHER THAN A CAPITAL ASSET). AS SUC H IT IS ONLY W.E.F 01.04.2019 IF THE VALUE ADOPTED OR ASSESSED OR ASSESSABLE BY THE STAMP VALUATION AUTHORITY FOR THE PURP OSE OF PAYMENT OF STAMP DUTY DOES NOT EXCEED ONE HUNDRED AND FIVE PER CENT OF THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF THE TRANSFER OF THE ASSET (OTHER THAN A CAPITAL ASSET) THEN THE CONSIDERATION SO RECEIVED OR ACCRUING AS A RESULT OF THE TRANSFER FOR THE PURPOSES OF COMPUTING THE PROFITS AND GAINS FROM TRANSFER OF SUCH ASSET WAS TO BE DEEMED TO BE THE FULL VALUE OF CONSIDERATION. ACCORDINGLY AS LONG AS THE DIFFERENCE BETWEEN THE VALUE ADOPTED BY THE STAMP VALUATION AUTHORITY AND THE ACTUAL CONSIDERATION RECEIVED OR ACCRUED TO THE ASSESSEE ON THE TRANSFER OF THE ASSET (OTHER THAN A CAPITAL ASSET) IS NOT IN EXCESS OF FIVE PERCENT THEN SUCH DIFFERENCE IS TO BE IGNORED AND THE PROFITS AND GAINS ON TRANSFER OF THE ASSET HAS TO BE WORKED OUT ON THE BASIS OF THE ACTUAL CONSIDERATION RECEIVED OR ACCRUING TO THE AS SESSEE. IN CASE THE AFORESAID CLAIM OF THE ASSESSEE THAT IF THE DIFFERENCE BETWEEN THE VALUE ADOPTED BY THE STAMP VALUATION AUTHORITY AND THE ACTUAL CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF TRANSFER OF THE ASSET (OT HER THAN A CAPITAL ASSET) DOES NOT EXCEED 15% THEN NO ADDITION WOULD BE CALLED FOR UNDER SEC.43CA IS ACCEPTED THEN WE ARE AFRAID THAT THE SAME WOULD RENDER THE AFORESAID PROVISO TO SEC. 43CA(1) AS HAD SPECIFICALLY BEEN MADE AVAILABLE ON THE STATUTE VID E THE FINANCE ACT 2018 W.E.F A.Y. 2019 - 20 WOULD BE RENDERED AS MEANINGLESS. P A G E | 8 ITA NO.4934/MUM/2018 A.Y. 2015 - 16 WELFARE PROPERTIES P. LTD. VS. DCIT - 13(3)(1) 10 . WE SHALL NOW ADVERT TO THE CLAIM OF THE LD. A.R THAT AS THE DIFFERENCE BETWEEN THE STAMP DUTY VALUE AND THE ACTUAL CONSIDERATION RECEIVED AS A RESULT OF TRANSFER OF THE AFORE SAID PROPERTY UNDER CONSIDERATION IN PERCENTAGE TERMS WORK S OUT TO 9.56% THEREFORE AS PER THE JUDICIAL PRONOUNCEMENTS RELIED UPON BY HIM NO ADDITION WAS CALLED FOR IN THE HANDS OF THE ASSESSEE. WE ARE UNABLE TO PERSUADE OURSELVES TO SUBSCRIBE TO THE RELIANCE PLACED BY THE LD. A.R ON THE VARIOUS JUDICIAL PRONOUNC EMENT S WHICH WE FIND ARE DISTINGUISHABLE ON FACTS . A S REGARDS THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF C.B. GAUTAM VS. UNION OF INDIA & ORS. 1993 (1) SCC 78 WE FIND THAT AS THE SAID JUDGEMENT WAS RENDERED IN CONTEXT OF THE SCOPE AND GAMUT OF THE PROVISIONS OF CHAPTER XX - C OF THE ACT THEREFORE THE SAME WOULD NOT ASSIST THE CASE OF THE ASSESSEE BEFORE US. IN FACT WE FIND THAT IN THE AFORESAID JUDGMENT THE HONBLE APEX COURT HAD OBSERVED THAT THE RIGHT OF PRE - EMPTIVE PURCHASE HAS TO BE EXE RCISED BY THE APPROPRIATE AUTHORITY ONLY IF THE FAIR MARKET VALUE WAS FOUND TO BE AT LEAST 15% MORE THAN THE APPARENT CONSIDERATION. IN OUR CONSIDERED VIEW AS THE AFORESAID JUDGMENT HAD BEEN RENDERED BY THE HONBLE APEX COURT IN A DIFFERENT CONTEXT THERE FORE THE SAME BEING DISTINGUISHABLE AS AGAINST THE ISSUE INVOLVED IN THE CASE BEFORE US WE DECLINE TO ACCEPT THE SUPPORT DRAWN BY THE LD. A.R FROM THE SAID JUDICIAL PRONOUNCEMENT. AS REGARDS THE REMAINING ORDERS OF THE CO - ORDINATE BENCHES OF THE TRIBUNAL THAT HAVE BEEN RELIED UPON BY THE LD. A.R WE FIND THAT NEITHER OF THE SAID ORDERS WERE RENDERED IN SPECIFIC CONTEXT OF SEC. 43CA. ALTERNATIVELY WE MAY HEREIN OBSERVE THAT IN NEITHER OF THE AFORESAID ORDERS THE CO - ORDINATE BENCHES OF THE TRIBUNAL HAD BE FORE THEM THE PROVISO TO SEC.43CA(1) THAT HAS BEEN MADE AVAILABLE ON THE STATUTE VIDE THE FINANCE ACT 2018 W.E.F 01.04.2019. AS OBSERVED BY US HEREINABOVE A S A TOLERA NCE LIMIT OF 5% BETWEEN THE VALUE ADOPTED BY THE S TAMP V ALUATION A UTHORITY AND THE AC TUAL CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF TRANSFER OF THE ASSET (OTHER THAN A CAPITAL ASSET) HAD BEEN MADE AVAILABLE ON THE STATUTE ONLY VIDE THE FINANCE ACT 2018 W.E.F A.Y. 01.04.2019 THEREFORE IT WOULD BE ABSOLUTELY INCORRECT TO INFER TH AT PRIOR TO THE AFORESAID AMENDMENT A TOLERA NCE LIMIT OF 15% WAS ALREADY AVAILABLE AND/OR INBUILT IN THE SAID STATUTORY PROVISION. IN O UR CONSIDERED VIEW IF THAT WOULD HAVE BEEN SO THEN THERE WOULD HAVE BEEN NO REQUIREMENT FOR INCORPORATION OF THE PROVI SO TO SEC. 43CA (1) OF THE ACT. O N THE BASIS OF OUR AFORESAID OBSERVATIONS WE ARE OF THE CONSIDERED VIEW THAT THE CONTENTION OF THE LD. A.R THAT AS THE DIFFERENCE OF RS. 4 48 350/ - BETWEEN THE VALUE ADOPTED BY THE S TAMP V ALUATION A UTHORITY AND THE ACTUAL CONSIDERATION RECEIVED AS A RESULT OF TRANSFER OF THE AFORESAID PROPERTY WORK S OUT P A G E | 9 ITA NO.4934/MUM/2018 A.Y. 2015 - 16 WELFARE PROPERTIES P. LTD. VS. DCIT - 13(3)(1) TO 9.56% I.E LESS THAN 15% THEREFORE THE SAME WAS TO BE IGNORED AND NO ADDITION WAS CALLED FOR IN THE HANDS OF THE ASSESSEE DOES NOT MERIT ACCEPTANCE AND IS RESUL TANTLY REJECTED . WE THUS I N TERMS OF OUR AFORESAID OBSERVATIONS FINDING NO INFIRMITY IN SUSTAIN ING OF THE ADDITION OF RS.4 48 350/ - BY THE CIT(A) UPHOLD HIS ORDER. 11 . RESULTANTLY THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OP EN COURT ON 2 9 . 11.2019 S D / - S D / - ( S. RIFAUR REHMAN ) (RAVISH SOOD) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; 29 .11 .2019 PS. ROHIT / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. / DR ITAT MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER / (DY./ASSTT. REGISTRAR) / ITAT MUMBAI