Applicability of Section 43CA of Income Tax Act, 1961 where agreement executed prior to 01/04/2013

12 Feb Applicability of Section 43CA of Income Tax Act, 1961 where agreement executed prior to 01/04/2013

INDEXONE TRADECONE PVT. LTD. VERSUS DCIT, CENTRAL CIRCLE-2, JAIPUR Appeal No.- ITA No. 470/JP/2018

Addition invoking the provisions of section 43CA – applicability of provisions at the time of entering into the agreement to sell – Held that:- In the present case, where the date of agreement to sell in respect of the two flats is 9.4.2007, which is much prior to the financial year relevant to assessment year 2014-15 when the provisions of section 43CA have become effective, there is no way the assessee would have foreseen these provisions at the time of entering into the agreement to sell that it has to receive the consideration only by any mode other than cash.

At the relevant point in time when it had entered into agreement to sell, there was no such requirement of receiving the whole of the consideration in mode other than cash. Therefore, in order to make the provisions of sub-section (4) workable, in our view, the provisions of sub-section (4) would be applicable in respect of agreement to sell for transfer of an asset which has been executed on or after 1st April, 2013 and thus, not applicable in the instant case. The matter is accordingly remanded back to the file of the ld CIT(A) to determine the valuation of the two properties in terms of sub-section (3) as on the date of agreement to sell which is 9.4.2007 and where it is so determined that such valuation is higher than what has been declared by the assessee, the same can be brought to tax in the year under consideration. – decided in favour of assessee for statistical purposes.