Section 45(5A) provides for the scheme by which capital gains arising to an
individual or HUF will be chargeable as the income of the previous year in which the
certificate of completion for the whole or part of the project is issued by the
Competent Authority. This provision is applicable only where the transfer is through a
specified agreement which means an agreement which is registered and where the
person owning the land or building or both in consideration for the transfer receives a
share in the land or building or both in such project with or without payment of part of
consideration in cash. This sub section was brought into the statute books with effect
from AY 2018-19. An amendment has been made by Finance Act 2023 with effect
from AY 2024-25 to substitute the words “the consideration received in cash if any”
with the words “any consideration received in cash or by a cheque or draft or by any
other mode”. The effect of section 45(5A) would be that the stamp duty valuation as
on the date of issue of the certificate of completion by the competent authority, of the
share of the land owner, being land or building or both in the project as increased by
any consideration received in cash or by a cheque or draft or by any other mode. On
a plain reading it may be noticed that prior to this amendment with effect from AY
2024-25 i.e. from AY 2018-19 to 2023-24 what could be increased to the stamp duty
value discussed above is only the consideration in cash if any for determining the full
value of consideration. Does this mean that upto AY 2023-24 consideration received
otherwise than by cash i.e. by a cheque or draft or by any other mode cannot be
increased in arriving at the full value of consideration. This appears to be illogical
though the plain language of the statute gives such an interpretation.
Even the memorandum explaining the Finance Bill clearly states that the amendment
is made to set right a drafting lacunae but the amendment, one can see is not
retrospective. This only further strengthens the case to urge that prior to the
amendment i.e. from assessment years 2018-19 to 2023-24 consideration received
in cash alone, can be increased to the stamp duty value.
