Shri. Ramesh V Shetty , Bangalore V. Assistant Commissioner of Income Tax Circle-1(2)(1), Bangalore

ITA 104/BANG/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 6879 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 7 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-09-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 10-09-2020
• Assessment Year: 2013-2014
• Appeal Filed On: 17-01-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S SUNDAR RAJAN
• Assessee Lawyers: B T SHETTY
• Keywords: Capital asset; Capital Gains
• Section: 143(3); 54EC

Judgement Text

ITA NO.104/BANG/2019 SHRI RAMESH V. SHETTY, BANGALORE IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: BANGALORE BEFORE SHRI GEORGE GEORGE K., JUDICIAL MEMBER AND SHRI B.R. BASKARAN, ACCOUNTANT MEMBER ITA NO.104/BANG/2019 ASSESSMENT YEAR: 2013-14 SHRI RAMESH V. SHETTY NO.40, R&S PARK VIEW, HAINES ROAD FRAZER TOWN BANGALORE-560 005 PAN NO : AGDPS 5427Q VS. ACIT CIRCLE-1(2)(1) BANGALORE APPELLANT RESPONDENT APPELLANT BY : SHRI B.T. SHETTY, A.R. RESPONDENT BY : SHRI S. SUNDAR RAJAN, D.R. DATE OF HEARING : 10.09.2020 DATE OF PRONOUNCEMENT : 11.09.2020 O R D E R PER GEORGE GEORGE K., JUDICIAL MEMBER: THIS APPEAL AT THE INSTANCE OF THE ASSESSEE IS DIRE CTED AGAINST CIT(A) ORDER DATED 26.11.2018. THE RELEVANT ASSESS MENT YEAR IS 2013-14. THE SOLITARY EFFECTIVE GROUND RAISED READ S AS FOLLOWS: GROUND NO.2: THE LEARNED CIT(A) ERRED IN UPHOLDING THE ADDITION OF RS.21,00,000/- AND ALSO FAILED TO APPRECIATE THE FACTS AND THE PROVISIONS OF THE ACT UNDER SECTION 54E(1) AND FIRST PROVISO, THAT THE INVESTME NT WAS MADE IN TWO DIFFERENT FINANCIAL YEARS WHICH ARE WEL L WITHIN THE SIX MONTHS PERIOD FROM THE DATE OF TRAN SFER OF LONG-TERM CAPITAL ASSET AS STIPULATED U/S 54EC. ITA NO.104/BANG/2019 SHRI RAMESH V. SHETTY, BANGALORE PAGE 2 OF 4 2. BRIEF FACTS OF THE CASE ARE AS FOLLOWS: ASSESSEE IS AN INDIVIDUAL. FOR THE ASSESSMENT YEAR 2013-14, RETURN OF INCOME WAS FILED BY THE ASSESSEE DECLARIN G TOTAL INCOME OF RS.1,07,42,030/-. ASSESSEE HAD SOLD A RESIDENTIAL PROPERTY AND DECLARED CAPITAL GAINS FOR A SUM OF RS.70,90,317/-. ASSESSEE HAD CLAIMED DEDUCTION U/S 54EC OF THE INCOME TAX ACT, 1 961 (HEREINAFTER THE ACT) FOR INVESTMENT MADE IN NHAI BONDS. FROM THE DOCUMENTS SUBMITTED BY THE ASSESSEE, IT IS EVIDENT THAT ASSES SEE HAD MADE APPLICATION FOR ALLOTMENT OF BONDS WORTH RS.50 LAKH S ON 21.3.2013 AND RS.21 LAKHS ON 17.7.2013. FURTHER, THE LETTER OF ALLOTMENT RECEIVED FROM NHAI ALSO REFLECTS THE DATE OF ALLOTM ENT AT 31.3.2013 AND 31.7.2013 RESPECTIVELY. HOWEVER, THE CREDIT OF THE SAME WAS REFLECTED IN THE DEMAT ACCOUNT OF THE ASSESSEE ON 1 0.5.2013 AND 5.9.2013 RESPECTIVELY. 3. THE A.O. PASSED AN ORDER OF ASSESSMENT U/S 143(3) O F THE ACT (ORDER DATED 29.1.2016), WHEREIN HE DID NOT GIVE DE DUCTION FOR A SUM OF RS.21 LAKHS U/S 54EC OF THE ACT AND HE RECOMPUTE D THE ASSESSEES TOTAL INCOME AT RS.1,28,42,030/-. THE A.O. CONCLUD ED THAT BOTH THE INVESTMENT IN NHAI BONDS HAPPENED IN THE SAME FINAN CIAL YEAR I.E. IN THE FINANCIAL YEAR 2013-14. 4. AGGRIEVED BY THE ORDER OF THE ASSESSMENT IN DENYING EXEMPTION U/S 54EC OF THE ACT IN RESPECT TO RS.21 LAKHS, ASSE SSEE PREFERRED AN APPEAL TO THE FIRST APPELLATE AUTHORITY. THE CIT(A ) CONFIRMED THE VIEW TAKEN BY THE A.O. IN RESTRICTING THE EXEMPTION OF C APITAL GAINS FOR ITA NO.104/BANG/2019 SHRI RAMESH V. SHETTY, BANGALORE PAGE 3 OF 4 54EC BONDS TO SUM OF RS50 LAKHS. THE CIT(A) RELIED ON THE ORDER OF JAIPUR BENCH OF THE TRIBUNAL IN THE CASE OF ACIT VS . RAM KUMAR JAIN AND SONS (HUF). 5. AGGRIEVED BY THE ORDER OF THE CIT(A) ASSESSEE HAS P REFERRED THIS APPEAL BEFORE THE TRIBUNAL. THE LD. A.R. HAS FILED A PAPER BOOK ENCLOSING THEREIN NHAI ALLOTMENT LETTER OF RS.50 LA KHS AND RS.21 LAKHS ON 23.3.2013 AND 20.7.2013 RESPECTIVELY, COPY OF THE SALE DEED, COMPUTATION OF INCOME FOR ASSESSMENT YEAR 2013-14, THE CASE LAWS RELIED ETC. 6. THE LD. D.R. ON THE OTHER HAND STRONGLY SUPPORTED T HE ORDER OF ASSESSMENT AND THE CIT(A) IN RESTRICTING THE CLAIM OF DEDUCTION TO A SUM OF RS.50 LAKHS. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. AS PER THE PROVISIO N OF SECTION 54EC(1) OF THE ACT AND ITS FIRST PROVISO, IT IS CLEAR THAT THE TIME LIMIT FOR INVESTMENT IS SIX MONTHS FROM THE DATE OF TRANSFER AND EVEN IF SUCH INVESTMENT FALLS UNDER TWO FINANCIAL YEARS, THE BEN EFIT CLAIMED BY THE ASSESSEE CANNOT BE DENIED. THE AMENDMENT IN FINANC E (NO.2 ACT) 2014 RELATE TO ASSESSMENT YEAR 2015-16 (I.E. INSER TION OF SECOND PROVISO TO SECTION 54EC(1) AND THE SAME APPLIES PRO SPECTIVELY FOR AND FROM ASSESSMENT YEAR 2015-16. A SIMILAR VIEW WAS H ELD BY THE BENGALURU BENCH OF THE TRIBUNAL IN THE FOLLOWING CA SES: ITA NO.104/BANG/2019 SHRI RAMESH V. SHETTY, BANGALORE PAGE 4 OF 4 1) SHRI VIVEK JAIRAZBHOY VERSUS DEPUTY COMMISSIONER OF INCOME-TAX (INTERNATIONAL TAXATION) IN ITA NO.236/BANG/2012 OF ITAT BANGALORE BENCH. 2) DEPUTY COMMISSIONER OF INCOME-TAX VS. BORKATTE GANA PATHI HEGDE IN ITA NO.964/BANG/2016 OF ITAT BANGALORE. 8. SINCE ASSESSEE HAD INVESTED RS.71 LAKHS IN TWO DIFF ERENT FINANCIAL YEARS AND WITHIN SIX MONTHS FROM THE DATE OF TRANSFER OF THE CAPITAL ASSETS, THE LIMIT OF RS.50 LAKHS IS PER FIN ANCIAL YEAR. HENCE, THE ASSESSEE IS ELIGIBLE FOR DEDUCTION OF RS.71 LAK HS U/S 54EC OF THE ACT. IT IS ORDERED ACCORDINGLY. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 11 TH SEPT, 2020 SD/- (B.R. BASKARAN) ACCOUNTANT MEMBER SD/- (GEORGE GEORGE K.) JUDICIAL MEMBER BANGALORE, DATED 11 TH SEPT, 2020. VG/SPS COPY TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASST. REGISTRAR, ITAT, BANGALORE.