Benefit of 5percent variation between stamp duty value and consideration: Curative and retrospective applicability of provisions of section 50C
Outcome: In favour of Assessee
- During the Assessment Year 2008-09, as per valuation report of the valuation officer the value of the building was to the tune of Rs. 1.76 Crs. However, the Assessee had shown the same in the return of income at Rs.1.66 Crs.
- The revenue was of the view that the Assessee had invested an amount of Rs. 1.76 Crs as reported by valuation officer as against Rs. 1.66 Crs shown by the Assessee in return of income. Therefore, the excess investment of Rs. 10.03 lakhs was treated as an unexplained investment under Section 69 of the Act.
- The Tribunal placed reliance on the decision of co-ordinate bench in the case of Chandra Prakash Jhunjhunwala Vs. Deputy Commissioner of Income Tax, wherein it was concluded that the third proviso to Section 50C should be treated as curative in nature and with retrospective effect from 1st April 2003, i.e. the date effective from which Section 50C was introduced.
- It was observed that the third proviso to Section 50C of the Act was only a procedural amendment and hence, a variation of upto 10% in the value could be ignored pertaining to the retrospective nature of the amendment.
- In the present facts of the case, the valuation officer valued the building at Rs.1.76 Crs whereas the Assessee had shown the same in books of accounts at Rs.1.66 Crs and the difference of these two figures was Rs. 10.03 lakhs. The said difference of Rs. 10.03 lakhs was less than 10% of the valuation shown by the Assessee i.e. Rs.16.65 lakhs. The said variation or difference may have arisen because of various factors.
- Following the view of Chandra Prakash Jhunjhunwala in the case of Assessee, it was concluded that such minor difference should be ignored and no addition should be made on account of such minor variations.
- Therefore, as the variation in valuation of valuation officer and the valuation made by the Assessee did not exceed 10%, the addition of Rs.10.03 lakhs was to be deleted.