Mamta Agarwal Vs PCIT (ITAT Agra)
Tolerance band (10%) under Sec. 50C / 56 is a remedial & curative amendment & applies retrospectively
In these two connected appeals, the assessees, Smt. Mamta Agarwal & Shri Rakesh Agarwal, had jointly purchased an immovable property wherein each of them held 1/3rd share. The actual consideration for the entire property was ₹4.71 crore, resulting in each assessee paying ₹1.57 crore. The stamp duty (circle) value of the same property was ₹9.01 crore. During the reassessment proceedings u/s 147, Assessees requested AO to refer the matter to DVO, as they contended that the stamp duty valuation did not reflect the fair market value. Acting on the request, AO referred the matter to DVO u/s 142A, who determined the fair market value of the property at ₹5.16 crore, thereby fixing the value of the 1/3rd share of each assessee at ₹1.72 crore. Consequently, the difference between DVO’s valuation & the actual consideration paid by each assessee came to ₹15.14 lakh, which was less than 10% of the transaction value.
Assessee relied upon various judicial precedents, including ITAT Mumbai in the case of Maria Fernandes Cheryl & ITAT Kolkata in Chandra Prakash Jhunjhunwala, which had held that the amendment to section 50C introducing a tolerance margin of 10% was curative in nature & therefore applicable retrospectively from 01.04.2003, the date of insertion of section 50C. They further submitted that the same principle should apply to section 56(2)(vii)/(viib) as both provisions are pari materia. AO, after considering DVO report, the submissions of Assessee & the legal position laid down by various Courts & Tribunals, concluded that when the variation between actual consideration & fair market value is less than 10%, no addition is warranted. Accordingly, he accepted the returned income & completed the reassessment u/s 147 r.w.s. 144B without any addition on this issue.
