Sec. 50C of Income Tax Act, 1961— Capital gains- Special provisions for computation of capital gains — Variation if valuation shown by DVO and the valuation made by the assessee does not exceed 10% hence, addition deleted

Facts: Brief facts qua the issue are that as per valuation report of the valuation officer (DVO), the value of the building (asset) was to the tune of Rs. 1,76,55,900/- as against Rs. 1,66,52,805/- shown by the assessee. CIT(A) was of the view that assessee has invested an amount of Rs. 1,76,55,900/-, as reported by DVO as against Rs. 1,66,52,805/- shown by the assessee in return of income. Therefore, the excess investment of Rs. 10,03,095/- (1,76,55,900 – 1,66,52,805) was treated by the CIT(A) as an unexplained investment u/s 69 and the said amount had been enhanced by CIT(A).

Held, that if the difference between the valuation adopted by the Stamp Valuation Authority and declared by the assessee is less than 10%, the same should be ignored and no adjustments shall be made. Accordingly, we hold that the insertion of third proviso to Section 50C is declaratory and curative in nature. That is, the third proviso to Section 50C relates to computation of value of property as explained by us above, hence it is not a substantive amendment, it is only a procedural amendment therefore the Coordinate Benches of the ITAT used to ignore the variation up to 10%, therefore, the said amendment should be retrospective. Quite clearly therefore, even when the statute does not specifically state so, such amendments, in the light of the detailed discussions above, can only be treated as retrospective and effective from the date related statutory provisions was introduced. Viewed thus, 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. We note that the variation in valuation shown by DVO and the valuation made by the assessee does not exceed 10% hence relying on the judgment of Co-ordinate Bench(supra), on the identical issue, as noted above, we delete the addition of Rs. 10,03,035/-. In the result, the appeal of the assessee is allowed. - DULARI DEVI HETAMSARIA V/s ASSTT. CIT - [2020] 26 ITCD Online 056 (ITAT-KOLKATA)