Smt. Rashmi Kaur Chug, Patiala V. Income Tax Officer, Patiala

CO 36/CHANDI/2015

• Counselvise Citation: [2016] 123 COUNSELVISE.COM (IT) 1912 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 month(s) 18 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 18-01-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 30-11-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: DEEPINDER SINGH
• Assessee Lawyers: MANJIT SINGH
• Keywords: Capital asset; Period of limitation; Time period of passing order

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES, CHANDIGARH BEFORE SHRI H.L.KARWA, HON'BLE VICE PRESIDENT & MS. RANO JAIN, ACCOUNTANT MEMBER ITA NO. 801/CHD/2015 ASSESSMENT YEAR : 2011-12 THE ITO, WARD-4, VS. SMT. RASHMI KAUR CHUG, PATIALA PATIALA PAN NO. AAIPPC7306Q & C.NO. 36/CHD/2015 IN ITA NO.801/CHD/2015 (ASSESSMENT YEAR : 2011-12) SMT. RASHMI KAUR CHUG, THE ITO, WARD-4 PATIALA PATIALA PAN NO. AAIPPC7306Q (APPELLANT) (RESPONDENT) APPELLANT BY : SH. MANJIT SINGH RESPONDENT BY : SH. DEEPINDER SINGH DATE OF HEARING : 22.12.2015 DATE OF PRONOUNCEMENT : 18.01.2016 . ORDER PER H.L.KARWA, VP THIS APPEAL FILED BY THE REVENUE AND CROSS OBJECTIO N BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF CIT(A) PATIALA DATED 25.8.2015 RELATING TO ASSESSMENT YEAR 2011-12. 2. IN THIS APPEAL, THE REVENUE HAS RAISED THE FOLLO WING GROUNDS:- 2 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD. CIT(A) HAS ERRED IN ALLOWING THE APPEAL OF THE ASSESSEE BY NOT SUSTAINING THE AOS ACTION REGARDIN G DISALLOWING THE DEDUCTION CLAIMED U/S 54EC OF THE I NCOME TAX ACT, 1961. 2. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD. CIT(A) HAS ERRED IN NOT APPRECIATING THE PR OVISION OF SECTION 54EC OF THE INCOME TAX ACT, 1961, WHEREIN, THE WORDS AFTER THE DATE OF TRANSFER HAVE BEEN MENTIO NED AND NOT FROM THE END OF THE MONTH OF TRANSFER. 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE IS AN INDIVIDUAL DERIVING INCOME FROM OTHER SOURCES. DURING THE PERI OD RELEVANT TO ASSESSMENT YEAR UNDER CONSIDERATION, THE ASSESSEE SOLD A RESID ENTIAL PROPERTY FOR A TOTAL CONSIDERATION OF RS. 96 LAKHS. THE ASSESSEE CLAIMED EXEMPTION OF CAPITAL GAIN ARISING ON ACCOUNT OF SALE OF SAID HOUSE. THE SAID EXEMPTION HAS BEEN CLAIMED BY THE ASSESSEE U/S 54EC OF THE INCOME-TAX ACT, 196 1 (IN SHORT 'THE ACT'). THE ASSESSING OFFICER NOTICED THAT FOR THE CLAIM OF DED UCTION U/S 54EC OF THE ACT, THE ASSESSEE HAD MADE INVESTMENT IN SPECIFIED ASSET S I.E. THE PURCHASE OF BONDS OF RURAL ELECTRICAL CORPORATION(REC). AS PER THE PR OVISIONS OF SECTION 54EC OF THE ACT, THE INVESTMENT IS REQUIRED TO BE MADE WITH IN SIX MONTH FROM THE SALE OF THE ASSETS FOR CLAIMING DEDUCTION U/S 54EC OF THE A CT. THE ASSESSEE HAD SOLD IMMOVABLE PROPERTY AT JAMSHEDPUR ON 27.10.2010. THE ASSESSEE MADE INVESTMENT FOR THE PURPOSE OF REC BONDS AS UNDER:- I. RS. 50 LACS INVESTED VIDE CHEQUE DATED 22/03/2011 A ND BONDS WORTH RS. 50 LACS WERE ALLOTTED BY THE RURAL ELECTRIFICATION CORPORATION, NEW DELHI TO THE ASSES SEE ON 31/03/2011. THE SAID INVESTMENT OF RS. 50 LACS C AN BE SAID TO HAVE BEEN MADE BY THE ASSESSEE WELL WITH IN THE STIPULATED PERIOD OF SIX MONTHS. II. SECOND INVESTMENT OF RS. 46 LACS WAS MADE BY THE ASSESSEE VIDE HER CHEQUE DATED 28/04/2013. AS PER 3 LETTER FILED BY THE ASSESSEE ON 27/12/2013 DURING T HE COURSE OF ASSESSMENT PROCEEDINGS, A CERTIFICATE DAT ED 26/12/2013 FROM THE HDFC BANK, LEELA BHAWAN, PATIALA HAD BEEN ENCLOSED WHICH READ AS UNDER:- TO WHOMSOEVER IT MAY CONCERN THIS IS FOR INFORMATION THAT CHEQUE NO. 005274 DATE D 28/04/2011 AMOUNTING TO RS. 46,00,000/- (FORTY SIX LACS ONLY) FAVOURING RURAL ELECTRIFICATION CORPORAT ION LTD. 54 EC BONDS DRAWN ON FEDERAL BANK WAS RECEIVED AT HDFC BANK LTD.ON 30/04/2011 FOR PRESENTATION IN CLEARING AND PAID ON 03/05/2011. THE ASSESSING OFFICER OBSERVED THAT THE SECOND INVE STMENT OF RS. 46 LAKHS WAS MADE BY THE ASSESSEE AFTER THE STIPULATED PERIOD OF 6 MONTHS FROM THE DATE OF SALE OF THE CAPITAL ASSETS AND, HENCE, A SHOW CAUSE NOTICE WAS ISSUED TO THE ASSESSEE ASKING HIM AS TO WHY THE DEDUCTION U/S 54E C SHOULD NOT BE DISALLOWED IN RESPECT OF THE SECOND INVESTMENT OF RS. 46 LAKHS AS THE SAME WAS NOT MADE WITHIN THE STIPULATED PERIOD OF 6 MONTHS. IN RESPON SE TO THE SAID NOTICE, THE ASSESSEE FILED A WRITTEN REPLY DATED 6.1.2014 WHERE IN IT WAS STATED THAT THE APPLICATION OF REC BONDS FOR RS. 46 LAKHS WAS SUBM ITTED BY THE ASSESSEE IN BANK ON 25.4.2011 I.E. WITHIN THE STIPULATED TIME O F SIX MONTHS. ON THE CONTRARY, THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HA D DEPOSITED CHEQUE OF RS. 46 LAKHS DATED 28.4.2011 IN THE BANK ON 30.4.2011 FOR THE PURPOSE OF REC BONDS. ACCORDING TO ASSESSING OFFICER THE INVESTMENT WAS D ELAYED BY THREE DAYS AND THE SAME COULD NOT BE ALLOWED AS PER THE PROVISIONS OF SECTION 54EC OF THE ACT. THE ASSESSING OFFICER FURTHER OBSERVED THAT THE CON TENTION OF THE ASSESSEE THAT APPLICATION FOR PURCHASE OF BONDS WAS SUBMITTED ON 25.4.2011, IS WITHOUT ANY BASIS WHEN THE CHEQUE WAS DATED 28.4.2011 WHICH WAS PRESENTED IN THE BANK ON 30.4.2011 . THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HERSELF MADE THE INVESTMENT AFTER THE EXPIRY OF THE LAST DATE OF STI PULATED PERIOD OF SIX MONTHS. 4 THE ASSESSING OFFICER ALLOWED THE DEDUCTION U/S 54E C ONLY TO THE EXTENT OF RS. 50 LAKHS I.E. INVESTMENT MADE WITHIN THE PERIOD OF SIX MONTHS AND NO DEDUCTION U/S 54EC OF THE ACT WAS ALLOWED TO THE ASSESSEE IN RESPECT OF THE INVESTMENT OF RS. 46 LAKHS MADE BY HER VIDE CHEQUE DATED 28.4.201 1 (WRONGLY MENTIONED THE DATE AS 28.4.2013 IN ASSESSMENT ORDER), WHICH WAS DEPOSITED IN THE BANK ON 30.4.2013 WHICH WAS AFTER STIPULATED PERIOD OF 6 MO NTHS. 4. ON APPEAL, THE CIT(A) HELD THAT THE ASSESSEE HAD MADE INVESTMENT WITHIN SIX MONTHS FROM THE END OF THE MONTH IN WHICH TRANS FER TOOK PLACE. ACCORDINGLY, THE ASSESSEE WAS HELD ENTITLED FOR THE FULL EXEMPTI ON CLAIMED U/S 54EC OF THE ACT. THE RELEVANT OBSERVATIONS OF THE CIT(A) ARE AS UNDER:- 05. DURING THE APPELLATE PROCEEDINGS, APPELLANT REL IED ON THE CASE OF ITAT AHMEDABAD BENCH (SPECIAL BENCH) IN THE CASE OF ALKABEN B. PATEL VS INCOME TAX OFFICER 43 TAXMANN.COM 333. IT WAS CONTENDED THAT IN THE DECIS ION AS REFERRED TO ABOVE, IT HAS BEEN HELD THAT THE MONTH MEANS FULL MONTH WHICH IS TO BE RECKONED FROM THE END OF THE MONTH IN WHICH TRANSFER TOOK PLACE. THE APPELLANT SUBMITT ED A COPY OF THE ORDER. I HAVE GONE THROUGH THE SAME. IN THIS CASE, THE PROPERTY WAS SOLD ON 10.06.2008 AND ACCORDINGLY AS PER ASSESSING OFFICER THE LAST DATE FOR INVESTMENT WAS 10.12.2008. THE APPELLANT IN THIS CASE TENDERED CHE QUE ON 08.12.2008 WHILE IT WAS CLEARED ON 17.12.2008 AND T HUS THERE WAS A DELAY OF SOME DAYS IN INVESTMENT MADE. IN THI S RESPECT, HONBLE ITAT HELD THAT THE MONTH SHALL MEAN A MON TH AS DEFINED UNDER THE GENERAL CLAUSES ACT, 1897 AND THE REFORE FOR THE PURPOSE OF SECTION 54EC THE CALENDAR MONTH IS TO BE TAKEN AND NOT 180 DAYS. THE HONBLE ITAT HELD THAT THE SAID INVESTMENT WAS MADE IN THE MONTH OF DECEMBER 2008. THERE WAS ONLY A DELAY OF FEW DAYS FROM THE TIME LIMIT OF SIX MONTHS COUNTED FROM THE ACTUAL DATE OF TRANSFER. BUT IT WA S WITHIN SIX MONTHS PERMISSIBLE LIMIT FROM THE END OF THE MONTH IN WHICH THE TRANSFER TOOK PLACE. COMING TO THE CASE UNDER A PPEAL, IT IS 5 NOTED THAT PROPERTY WAS SOLD ON 27 TH OCTOBER, 2010, IN TERMS OF THE DECISION OF THE HONBLE ITAT (SPECIAL BENCH) , AHMEDABAD MENTIONED SUPRA, THE APPELLANT COULD HAVE MADE INVESTMENT UP TO 30.04.2011 . FURTHER, THE CHEQUE D ATED 28.04.2011 WAS PRESENTED TO THE PAYEE BANK I.E. HDF C ON 30.04.2011 WHICH WAS EVENTUALLY ENCASHED ON 03.05.2 011. IT HAS BEEN CONTENDED ON BEHALF OF THE APPELLANT THAT DATE OF ENCASHMENT OF CHEQUE IS IMMATERIAL FOR COUNTING THE LIMITATION PERIOD OF INVESTMENT. THE DATE OF PRESEN TATION OF CHEQUE IN THE BANK IS MATERIAL WHICH IS AGAIN WITHI N THE PRESCRIBED LIMIT OF INVESTMENT U/S 54EC. IN HER SUP PORT THE APPELLANT RELIED ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT BOMBAY SOUTH, BOMBAY VS. OGALE GLAS S WORKS LT.D 1954 AIR 429. I HAVE PERUSED THE AFORE-M ENTIONED JUDGEMENT OF THE HONBLE SUPREME COURT AND FIND FOR CE IN THE ASSERTION OF THE APPELLANT. THUS, IN VIEW OF THE FA CTS AND CIRCUMSTANCES OF THE CASE, I AM OF THE VIEW THAT TH E APPELLANT HAD MADE INVESTMENT WITHIN 6 MONTHS FROM THE END OF THE MONTH IN WHICH TRANSFER TOOK PLACE, SO AS TO ENTITL E HER FOR THE FULL EXEMPTION CLAIMED U/S 54EC. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS. THERE IS N O DISPUTE AS REGARDS THE FACTS OF THE PRESENT CASE. ADMITTEDLY, THE ASSESSEE SOLD THE PROPERTY I.E A HOUSE AT JAMSHEDPUR FOR A TOTAL CONSIDERATION OF RS. 96 L AKHS ON 27.10.2010. THE CHEQUE DATED 28.4.2011 WAS PRESENTED TO THE PAYEE B ANK ON 30.4.2011 FOR THE PURCHASE OF REC BONDS. THE ASSESSING OFFICER REJECT ED THE CLAIM OF THE ASSESSEE STATING THAT INVESTMENT WAS DELAYED BY THREE DAYS A ND THE SAME COULD NOT BE ALLOWED AS PER THE PROVISIONS OF SECTION 54EC OF TH E ACT. HOWEVER, THE CHEQUE WAS ENCHASED ON 3.5.2011. IN OUR OPINION, THE LD. C IT(A) HAS TAKEN A CORRECT VIEW THAT THE DATE OF PRESENTATION OF CHEQUE IN THE BANK IS MATERIAL WHICH IS WITHIN THE PRESCRIBED LIMIT OF INVESTMENT U/S 54EC OF THE ACT. IN THE INSTANT CASE, THE INVESTMENT IN REC BONDS WAS MADE WITHIN S IX MONTHS FROM THE END OF THE MONTH IN WHICH THE TRANSFER TOOK PLACE. IN OUR OPINION, THE LD. CIT(A) HAS 6 CORRECTLY FOLLOWED THE DECISION IN THE CASE OF ALK ABEN B. PATEL VS. ITO (2014) 43 TAXMAN.COM 333 (AHMEDABAD TRIBUNAL )(SB), WHEREIN IT HAS BEEN HELD THAT THE MONTH SHALL MEAN A MONTH AS DEFINED IN THE GE NERAL CLAUSE ACT, 1897 AND, THEREFORE, FOR THE PURPOSE OF SECTION 54EC, THE CAL ENDAR MONTH HAS TO BE TAKEN AND NOT 180 DAYS. IN THE INSTANT CASE, THE ASSESSEE HAD MADE THE INVESTMENT WITHIN 6 MONTHS FROM THE END OF THE MONTH IN WHICH THE TRANSFER TOOK PLACE. THEREFORE, WE DO NOT SEE ANY INFIRMITY IN THE ORDER OF CIT(A) ON THIS ISSUE. CONSEQUENTLY, THE APPEAL DESERVES DISMISSAL. C.O. NO. 36/CHD/2015 6. IT IS OBSERVED THAT THE CROSS OBJECTIONS FILED B Y THE ASSESSEE MERELY SUPPORTS THE ORDER OF CIT(A). THE ASSESSEE HAS NOT CLAIMED ANY EFFECTIVE RELIEF IN THE CROSS OBJECTION. ACCORDINGLY, WE DISMISS TH E CROSS OBJECTION. 7. IN THE RESULT, THE APPEAL OF THE REVENUE AND THE CROSS OBJECTIONS BY THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 18.01.2016 SD/- SD/- (RANO JAIN) (H.L.KARWA) ACCOUNTANT MEMBER VICE PRESIDENT DATED 18 TH JANUARY, 2016 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR