Reopening alleging non-invocation of Section 50C in the hands of a non-resident assessee - year of application of Section 50C - agreement in one year and transfer in another year

Facts :

Assessee a non-resident with her father had entered into an agreement to sell a property on 15-06-2006 for Rs. 22 lakhs. The actual transfer happened only during 2012-13. The SRO value of the property in 2012-13 was Rs. 1.07 crores. The AO chose to reopen the case under section 147 and made additions for the difference between the SRO value vs Rs. 22 lakhs and passed assessment order. DRP sustained the additions. On higher appeal, the plea of the assessee was that the amendment made in Section 50C(1) vide Finance Act, 2015 giving choice to the assessee to substitute the SRO value in the year of agreement especially if the date of transfer was different to the agreement date was to be read retrospective in application. 

Held in favour of the assessee that the amendment in Section 50C(1) is to be read retrospectively thus the SRO value of the year 2006-07 ought to be seen by the AO and then the order to be revised accordingly.

"Amendment to section 50C introduced by the Finance Act 2016 for determining the full value of consideration in the case of the immovable property is curative in nature and will apply retrospectively. The Hon'ble Madras High Court in the case of CIT v. Shri VummundiAmarendran has decided an identical issue and has held that the provisions of Section 50C(1) of the Act should be taken to be retrospective from the date when the proviso exists. Similarly the Delhi Bench of the Tribunal in the case of Amit Bansal v. ACIT and Ahmedabad ITAT in DharamshibhaiSonani v. ACIT and in Rahul G. Patel has also held thus".

Case : Anupama Krishna Rao Premaraju v. ITO 2023 TaxPub(DT) 5569 (Hyd-Trib)