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2. On the facts and circumstances of the case and in law, the learned Commissioner of Income Tax(Appeal)-50, Mumbai, erred in confirming the addition of Rs.4,46,63,000/- u/s.43CA in this assessment year, whereas the plain reading of section 43CA suggests, that this addition can be made only in the year in which the project is completed.

3. On the facts and in circumstances of the case and in law, the learned Commissioner of Income (Appeal)-50, Mumbai erred in confirming the addition u/s.43CA in respect of property whose agreement value was only 6.6% less than the value fixed for stamp purposes ignoring the fact, that, the amendment to section 43CA by finance acts of 2018 and 2020, being curative in nature had retrospective effect from the day 43CA was introduced in the act.

3. Therefore, the AO issued a notice under section 148 of the Act reopening the assessment. The assessee filed its objections against the reopening vide letter dated 24.08.2021 which were then disposed of vide order dated 06.12.2021. The AO issued a show-cause notice to the assessee as to why the difference between the stamp duty value and the sale consideration cannot be treated as an addition under section 43CA of the Act. The assessee submitted that the difference between the stamp duty value and the sale consideration with respect to first property as listed above is less than the tolerance band as per the proviso to section 43CA of the Act i.e. 10% and therefore no addition is warranted under the said section is warranted with respect to the said property. The assessee without prejudice further submitted that the stamp duty valuation of both the properties is not correct and accordingly prayed that a reference may be made by the AO to the Departmental Valuation Officer (DVO). The AO did not accept the submissions of the assessee with regard to applicability of the Proviso to section 43CA containing the tolerance band. The AO held that the said proviso was inserted in section 43CA only by Finance Act 2018 w.e.f. 01.04.2019 and therefore not applicable to assessee's case for the year under consideration. Accordingly the AO made an addition of Rs. 4,46,63,000/- under section 43CA of the Act.

"4. We observe from plain reading of sec. 43CA that it provides in a case where consideration received or accruing as a result of the transfer by an assessee of an asset other than the capital asset being land or building is lesser than the value adopted or assessed by any Government authority for the purpose of payment of stamp duty then the difference will taxed as deemed income. At the same time, the proviso to this section states that if there is a difference of such value within 10% margin then there cannot be any addition on the pretext of deemed income and this 10% margin has been inserted by Finance Act, 2020 w.e.f. 1-4-2021. The assessment year under consideration before us is A.Y. 2015-16 that is prior to the date when the amendment look place and such 10% margin was inserted. The question therefore, arises whether this amendment effective from 1-4-2021 can even apply to prior assessment years as well. The assessee had relied on Pune Tribunal decision in ITA No. 923/PUN/2019 (supra) where the Tribunal has given retrospective effect in regard to section 43CA first proviso where the tolerance margin of 10% has been held to be applicable even for the prior assessment years. However, in this decision, reliance was placed on another decision of Bombay Tribunal in the case of Maria Fernandes Cheryl v. ITO (International Taxation) [2021] 123 taxmann.com 252/187 ITD 738 (Mum) which relates to section 50C of the Act. It was contended that section 43CA and section 50C of the Act are pari materia provisions and therefore, holding of retrospective application of section 50C is even applicable making retrospective application to section 43CA of the Act as well. The Id. A.R was unable to place on record before us any direct decision where the first proviso of section 43CA which has been brought into effect from 1-4-2021 was held to be applicable retrospectively. In such scenario, we place reliance on the doctrine enshrined in the judgment of the full bench decision of Hon'ble Supreme Court in the case of CIT v. Vatika Township (P) Ltd. [2014] 49 taxmann.com 249/227 Taxman 121/367 ITR 466. The fact in this case was that search and seizure u/s 132 was conducted on 10-2-2001 pursuant to which the assessment order for the block period from 1-4-1989 to 10-2- 2000 was passed on 28-02-2002 at a total undisclosed income of Rs. 85,00,000/-. The tax was charged as prescribed in section 113 of the Act. Subsequently, a proviso was inserted u/s 113 by the Finance Act, 2002 w.e.f. 01-06-2002 to provide for levy of surcharge at 10%. The A.O took the view that the said amendment was clarificatory in nature and he levied surcharge by passing rectification order u/s 154 of the Act. However, the M/s Gaurav Investments Tribunal and the Hon'ble High Court upheld the assessee's claim that the said amendment was prospective in nature and did not apply to block period falling before 01-06-2002. However, the plea of the assessee was rejected by the Hon'ble Supreme Court in CIT v. Suresh N. Gupta [2008] 166 Taxman 313/297 ITR 322 also held that the proviso to section 113 is clarificatory and hence, should be read into block assessment scheme under Chapter XIV-B with retrospective effect. Similar view was reiterated by the Hon'ble Supreme Court in CIT v. Rajiv Bhatara (2009) 178 Taxman 285/310 ITR 105 by holding the proviso u/s 113 to be retrospective in nature. Then the Supreme Court was of the view that the issue ought to be referred to a larger Bench of Five Judges. In this decision, the Hon'ble Supreme Court has given fundamental doctrine of retrospective applicability of provision. It has been held that no statute shall be construed to have a retrospective operation unless such a construction appears very clearly in terms of the Act or arises by necessary and distinct implication. The assessment creates a vested right on the assessee. The assessee cannot be subjected to re-assessment unless the provision to that effect is inserted by amendment either retrospectively or by necessary implications retrospectively. The Hon'ble Apex Court also opined that there cannot be any imposition of tax without the authority of law and such law has to be unambiguous and should prescribe liability to pay taxes in clear terms. This very principle is based on the doctrine, which means that if a particular provision of statute is not clear regarding imposition of tax or because of persons from whom the tax has to be collected, in such case the persons should not be fastened with any liability to pay tax. It was further observed that though the Chief Commissioner in their Conference suggested that there should be retrospective amendment to section 113 of the Act, the Legislature chose not to do so even though for other provisions in which the legislature in its wisdom felt the need to do so has brought in amendments made with retrospective effect. The CBDT circular No. 2002 dated 27-08-2002 also makes it clear that the amendment to section 113 is prospective. Consequently, the conclusion reached in N. Suresh Gupta (supra) treating the proviso to section 113 of the Act as clarificatory and having retrospective effect was held to be incorrect and was over-ruled.

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14. The ratio laid down in the above decision is that the rational for holding newly inserted proviso to sub-section (1) to section 50C of the Act as curative in nature, hence, having retrospective application. In our considered view the same analogy would apply to the provisions of Section 43CA of the Act also since both the sections are similarly worded with the difference being that section 50C is applicable in case of transfer of capital asset being land or building or both and section 43CA is for the transfer of asset (other than capital asset) being land or building or both. We further notice that in Circular 8 of 2018 dated 26.12.2018 containing Explanatory Notes to the provisions of Finance Act 2018 in Para 16 for 'Rationalization of Sections 43CA and 50C' it is stated that the proviso containing the tolerance band is inserted in order to minimize hardship in case of genuine M/s Gaurav Investments transactions in the real estate sector. When the reason behind the introduction of the proviso is read with the ratio laid down by the judicial precedence as discussed here in above on the retrospective applicability of beneficial provision, we have no hesitation in holding that the tolerance band of 10% is applicable in assessee's case for AY 2017-18. In assessee's case the difference between the DVO valuation that is considered for making addition under section 43CA and the sale consideration is less than the tolerance band as per the proviso to the said section (refer table extracted in the earlier part of this order). Accordingly we hold that in assessee's case no addition under section 43CA of the Act is warranted for the year under consideration.