M/s Shantabai V Kamat, Mapusa V. Commissioner of Income Tax, Panaji

ITA 10/PAN/2013

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 66813 (ITAT-PANAJI)
• Duration Of Justice: 5 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-06-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 22-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRASANNA KUMAR
• Assessee Lawyers: CHINMAY S KAMAT; SHAM J KAMAT
• Keywords: Capital asset
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH, PANAJI BEFORE SHRI P.K. BANSAL, HONBLE ACCOUNTANT MEMBER AND SHRI D.T. GARASIA, HONBLE JUDICIAL MEMBER ITA NO. 10/PNJ/2013 : (ASST. YEAR : 2008 - 09) MS. SHANTABAI V. KAMAT SHRI KRIPA, ALTINHO, MAPUSA, GOA PAN : ADPPK9990H (APPELLANT) VS. COMMISSIONER OF INCOME TAX, PANAJI (RESPONDENT) APPELLANT BY : SHAM J. KAMAT, CA & CHINMAY S. KAMAT, CA RESPONDENT BY : PRASANNA KUMAR, D.R DATE OF HEARING : 17/04/2013 DATE OF PRONOUNCEMENT : 28 / 6 /2013 O R D E R PER D.T. GARASIA : 1. THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT, PANAJI DT. 8.1.2013 FOR A.Y. 2008 - 09. THE FOLLOWING EFFECTIVE GROUNDS OF APPEAL HAVE BEEN RAISED BY THE APPELLANT IN THIS APPEAL : 1) THE CIT IS NOT ENTITLED, IN THE FACTS AND CIRCUMSTANCES OF THE CASE, TO HOLD THAT THE ORDER DATED 13/12/2010 U/S 143(3) PASSED B Y THE AO IS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE. 2) THE CIT IS NOT ENTITLED TO DIRECT THE AO TO RE - FRAME THE ASSESSMENT TO RESTRICT THE EXEMPTION U/S 54EC TO RS.50,00,000/ - INSTEAD OF RS. 90,00,000/ - . 3) WHILE THE FIRST APPEAL FROM THE ORDER U/S 143(3) IS PENDING BEFORE THE LEARNED CIT(APPEALS), PANAJI WHO HAS POWERS AND DISCRETION, IN APPROPRIATE CASES TO ENHANCE THE ASSESSMENT IF FOUND NECESSARY, THERE IS NO OCCASION FOR THE LEARNED CIT, PANAJI TO REVISE THE ORDER U/S 143(3) AS ERR ONEOUS OR PREJUDICIAL TO THE INTEREST OF REVENUE. 4) THE APPELLANT CRAVES TO LEAVE TO ADD TO, DELETE FROM OR TO MODIFY THE ABOVE GROUNDS OF APPEAL AT THE TIME OF HEARING. 2 ITA NO. 10/PNJ/2013 (ASST. YEAR : 2008 - 09) 2. THE SHORT FACTS OF THE CASE ARE THAT THE ASSESSEE HAS SOLD CAPITAL ASSETS ON 22.1.2008 FOR RS. 1,90,00,000/ - AND DERIVED CAPITAL GAINS OF RS.1,36,86,597/ - . THE ASSESSEE HAS INVESTED FOLLOWING AMOUNTS IN ELIGIBLE BONDS U/S 54EC WITHIN 6 MONTHS OF 22.1.2008 AS UNDER : I) O N 31.3.2008 DURING THE F.Y ENDING 3 1.3.2008 RS. 50 LACS II) ON 30.6.2008 DURING THE F.Y ENDING 31.3.2009 RS. 40 LACS THE ASSESSEE HAS NOT INVESTED AMOUNT MORE THAN RS. 50 LACS IN A NY F.Y IN ELIGIBLE BONDS U/S 54EC OF THE ACT. THE ASSESSMENT WAS COMPLETED ON 13.12.2010 U/S 143(3). THE AO HAS ALLOWED TOTAL DEDUCTION OF RS. 90 LACS U/S 54EC. THE COMMISSIONER WAS OF THE VIEW THAT AO HAS ALLOWED EXCESS CLAIM OF DEDUCTION U/S 54EC OF RS. 40 LACS. SHOW CAUSE N OTICE WAS GIVEN AND AFTER CONSIDERING THE REPLY, THE CIT HAS HELD AS UNDER : 10. PLAIN READING OF SECTION 54EC SHOWS THAT THE LIMIT IS PER PERSON PER FINANCIAL YEAR . PROVIDED THAT THE INVESTMENT MADE ON OR AFTER THE 1 ST DAY OF APRIL, 2007 IN THE LON G - TERM SPECIFIED ASSET BY AN ASSESSEE DURING ANY FINANCIAL YEAR DOES NOT EXCEED FIFTY LAC RUPEES. A) SINCE THIS IS THE CLEAR INTERPRETATION EMERGING ON A PLAIN READING OF THE LANGUAGE OF THE STATUTE THERE IS NO WARRANT FOR LABOURING TO UNFATHOM SOME SUPPOSE D LEGISLATIVE INTENT BEHIND THIS PROVISO, BECAUSE, AS IS JUDICIALLY WELL - SETTLED, THE FIRST AND PRIMARY RULE OF CONSTRUCTION IS THAT THE INTENTION OF THE LEGISLATION MUST BE FOUND IN THE WORDS USED BY THE LEGISLATURE ITSELF. THE WORDS OF THE STATUTE, AS D ISCUSSED ABOVE, CLEARLY SUGGEST THE INTERPRETATION ADOPTED ABOVE. B) ON A PLAIN READING OF THE PROVISO IT IS SUBMITTED THAT THE CEILING OF RS . 50 LAC LAID DOWN IN THE PROVISO IS A CEILING ON THE AMOUNT OF INVESTMENT AND NOT ON THE TOTAL AMOUNT OF EXEMPTION, AND FURTHER THE SAID CEILING ON THE AMOUNT OF INVESTMENTS ALSO QUA THE AGGREGATE IN A FINANCIAL YEAR AND NOT QUA THE AGGREGATE PER ASSESSEE IN DIFFERENT YEARS AS SUCH. 2.1 THE LD. AR SUBMITTED THAT THE ORDER UNDER PROPOSED REVISION IS NEITHER ERRONEOUS NOR PREJUDICIAL TO THE INTEREST OF THE REVENUE . THE AO HAS GRANTED 3 ITA NO. 10/PNJ/2013 (ASST. YEAR : 2008 - 09) DEDUCTION U/S 54EC IN RESPECT OF BOTH AMOUNTS INVESTED IN TWO DIFFERENT FINANCIAL YEARS ENDING ON 31.3.2008 AND 31.3.2009 IN ACCORDANCE WITH LAW. THE ITAT IN ASP I GINWALA, SHREE RAM ENG G. & MFG. INDUSTRIES [2012] 20 TAXMAN 75 (AHD.) HAS HELD THAT IT IS PERMISSIBLE TO GRANT DEDUCTION FOR AMOUNT INVESTED IN TWO FINANCIAL YEARS SO LONG AS THE AMOUNT INVESTED IN ONE YEAR DOES NOT EXCEED RS.50 LACS. THUS, THE AO HAS TAKEN A VIEW WHICH IS ONE OF THE VIEWS PERMISSIBLE, IN CASE TWO VIEWS ARE CAPABLE OF BEING TAKEN. THEREFORE, THE ACTION OF AO CANNOT BE ERRONEOUS. THE LD. AR HAS SUB MITTED THAT UNDER SECTION 54EC THERE WAS NO LIMIT PRIOR TO DECEMBER, 2006 BUT RS. 50 LACS LIMIT WAS PUT BY WAY OF NOTIFICATION ONLY ON THE GROUND THAT FEW PERSONS WOULD GET BENEFIT OF SECTION 54EC IN RESPECT OF BONDS ISSUED IN A YEAR. THIS NOTIFICATION H AS BEEN INTRODUCED ON THE GROUND THAT THIS MONEY WAS INVESTED FOR NATIONAL HIGHWAY UNDER NATIONAL HIGHWAYS ACT AND SOME OF THE ASSESSEES GET THE BONDS AND SOME OF THE ASSESSES DO NOT. THEREFORE, TO GIVE BENEFIT OF SUCH BONDS TO ALL THE PERSONS, THIS NOTIF ICATION HAS BEEN BROUGHT BY THE STATUTE. THEREFORE, IT CANNOT BE SAID THAT U/S 54EC ONLY RS. 50 LACS IS INVESTMENT LIMIT IN NATIONAL HIGHWAYS AUTHORITY BONDS OR RURAL ELECTRIFICATION CORPORATION LTD. BONDS. THE AO HAS TAKEN ONE OF THE POSSIBLE VIEWS. TH EREFORE, THE ORDER IS NOT ERRONEOUS. 2.2 THE LD. DR RELIED UPON THE ORDER OF REVENUE AUTHORITIES. 2.3 WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES. LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND THAT THE ASSESSEE HAS SOLD CAPITAL ASSET ON 22.1.2008 FOR RS. 1,90,00,000/ - AND DERIVED CAPITAL GAINS OF RS.1,36,86,597/ - . THE ASSESSEE HAS INVESTED RS. 50 LACS ON 31.3.2008 IN F.Y. 2007 - 08 AND RS. 40 LACS ON 30.6.2008 IN F.Y. 2008 - 09. THUS, THE ASSESSEE HAS NOT INVESTED RS. 50 LACS IN ONE FINANCIAL YEAR IN ELIGIBLE BONDS U/S 54EC. THE ASSESSEE HAS INVESTED THESE TWO AMOUNTS IN DIFFERENT ASSESSMENT YEARS. THE AO HAS ALLOWED THE CLAIM U/S 54EC OF THE INCOME TAX ACT FOR TOTAL AMOUNT OF 4 ITA NO. 10/PNJ/2013 (ASST. YEAR : 2008 - 09) RS. 90 LACS. WE FIND THAT THE ITAT IN ASPI GINWALA, SHREE RAM ENGG. & MFG. INDUSTRIES [2012] 20 TAXMAN 75 (AHD.) ( SUPRA) HAS HELD THAT IT IS PERMISSIBLE TO GRANT DEDUCTION FOR AMOUNT INVESTED IN TWO FINANCIAL YEARS SO LONG AS THE AMOUNT INVESTED IN ONE YEAR DOES NOT EXCEED RS. 50 LACS. WE FIND FROM THIS D ECISION THAT THE AO HAS TAKEN THE VIEW WHICH IS ONE OF THE VIEWS PERMISSIBLE IN CASE TWO VIEWS ARE CAPABLE OF BEING TAKEN. IN THESE CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE AO HAS TAKEN ONE OF THE PERMISSIBLE VIEWS AND IT CANNOT BE TREATED AS ERRONEOUS. THEREFORE, CIT(A) IS NOT JUSTIFIED IN HIS ACTION. 3. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. 4. ORDER PRONOUNCED IN THE OPEN COURT ON 28 / 6 /2013. SD/ - (P.K. BANSAL) ACCOUNTANT MEMBER SD/ - (D.T.GARASIA) JUDICIAL MEMBER PLACE : PANAJI / GOA DATED : 28 / 6 / 2013 *SSL* COPY TO : (1) APPELLANT (2) RESPONDENT (3) CIT, PANAJI (4) CIT(A), PANAJI (5) D.R (6) GUARD FILE TRUE COPY, BY ORDER SR. P RIVATE S ECRETARY ITAT, PANAJI, GOA