The ACIT, JAMNAGAR V. Sh Mansukhlal Karsandas Patel, JAMNAGAR

ITA 1137/RJT/2010

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 0455 (ITAT-RAJKOT)
• Duration Of Justice: 5 year(s) 3 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-12-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 08-10-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 30-08-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIMAL I MEHTA
• Keywords: Reassessment proceedings
• Section: 143(3)

Judgement Text

ITA N O . 1135 TO 113 8 AND 114 1 / RJT/201 5 ASSESSMENT YEAR: 005 - 06 PAGE 1 OF 5 IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT [CORAM: RAJPAL YADAV JM AND PRAMOD KUMAR AM ] ITA NO. 1135 / R JT / 2 0 1 0 ASSESSMENT YEAR: 2005 - 06 ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 3 , JAMNAGAR ....... .. . ..... APPELLANT VS. DINESHCHANDRA KARASANDAS PATEL ....... ..................RESPONDENT C/O VIRANI & CO, GRAIN MARKET, JAMNAGAR PAN: ABJPP7388Q ITA NO. 1136/RJT /20 10 ASSESSMENT YEAR: 2005 - 06 ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 3 , JAMNAGAR ....... .. . .. ...APPELLANT VS. KIRANBEN M PATEL .........................RESPONDENT C/O VIRANI & CO, GRAIN MARKET, JAMNAGAR PAN: ABJPP7388Q ITA NO. 1137/RJT /20 10 ASSESSMENT YEAR: 2005 - 06 ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 3 , JAMNAGAR ....... .. . .....APPELLANT VS. MANSUKHLAL KARASANDAS PATEL .........................RESPONDENT C/O VIRANI & CO, GRAIN MARKET, JAMNAGAR PAN: AJPP7390J ITA N O . 1135 TO 113 8 AND 114 1 / RJT/201 5 ASSESSMENT YEAR: 005 - 06 PAGE 2 OF 5 ITA NO. 1138/RJT /20 10 ASSESSMENT YEAR: 2005 - 06 ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 3, JAMNAGAR ....... .. . .....APPELLANT VS. RASILABEN DINESHCHANDRA PATEL .........................RESPONDENT C/O VIRANI & CO, GRAIN MARKET, JAMNAGAR PAN: AELPP2632Q ITA NO. 1141/RJT /20 10 ASSESSMENT YEAR: 2005 - 06 ASSISTANT COMMISSIONER OF INC OME TAX CIRCLE 2, JAMNAGAR ....... .. . .....APPELLANT VS. KESARBEN KARASANDAS PATEL .........................RESPONDENT C/O VIRANI & CO, GRAIN MARKET, JAMNAGAR PAN: ABJPP7388Q APPEARANCES BY: VIMAL I MEHTA FOR THE A PPELLANT SANJAY R SH AH FOR THE RESPONDENT S DATE OF CONCLUDING THE HEARING : OCTOBER 8 , 201 5 DATE OF PRONOUNCING THE ORDER : DECEMBER 23, 2015 O R D E R PER PRAMOD KUMAR AM 1. ALL THESE APPEALS INVOLVE PERTAIN TO A GROUP OF ASSESSEES, INVOLVE A COMMON ISSUE AND WERE HEARD TOGETHER. AS A MATTER OF CONVENIENCE, THEREFORE, ALL THE FIVE APPEALS ARE BEING DISPOSED OF BY WAY OF THIS CONSOLIDATED ORDER. 2. REVENUE S COMMON GRIEVANCE IN ALL THE FIVE CASES IS TWOFOLD - FIRST, THAT THE CIT(A) ERRED IN QUASHING THE REASSESSMENT PROCE EDINGS ON THE FACTS OF THIS CASE; AND, SECOND - THAT THE CIT(A) ERRED IN DELETING THE ADDITION OF RS 50,00,000, IN ITA N O . 1135 TO 113 8 AND 114 1 / RJT/201 5 ASSESSMENT YEAR: 005 - 06 PAGE 3 OF 5 EACH OF THESE CASES, MADE ON ACCOUNT OF DISALLOWANCE OF DEDUCTION UNDER SECTION 54EC OF THE INCOME TAX ACT, 1961, INASMUCH AS THE THE CIT(A) FAILED TO APPRECIATE THAT, UNDER THE PROVISIONS OF SECTION 54EC OF THE ACT, SIX MONTHS PERIOD IS TO BE RECKONED FROM THE DATE OF TRANSFER OF ASSETS AND NOT FROM THE DATE OF ACTUAL RECEIPT OF CONSIDERATION AND, AS SUCH, THE ASSESSEE WAS INELIGIBLE FOR DEDU CTION UNDER SECTION 54EC. 3. WHEN THESE APPEALS WERE CALLED OUT FOR HEARING, LEARNED COUNSEL FOR THE ASSESSEE POINTED OUT THAT THE ISSUE IS COVERED, IN FAVOUR OF THE ASSESSEE, BY HON BLE JURISDICTIONAL HIGH COURT IN THE CASE OF JYONTINDRA H SHODHAN VS INC OME TAX OFFICER [(2015) 278 CTR 98 (GUJ)]. HE SUBMITS THAT IT IS AN ADMITTED OPPOSITION, BY THE ASSESSING OFFICER HIMSELF, THAT THE DEPOSITS WERE MADE WITHIN SIX MONTHS OF RECEIVING THE SALE CONSIDERATION BUT YET HE HAS DECLINED THE DEDUCTION ON THE GROUN D THAT THE PERIOD OF SIX MONTHS IS TO BE COMPUTED FROM THE DATE O F SALE AND NOT THE DATE OF RECEIVING THE CONSIDERATION. THAT STAND, AS IS THE SETTLED LEGAL POSITION NOW, IS INCORRECT. AS THE CONCLUSIONS ARRIVED AT BY THE CIT(A) ON MERITS ARE THUS CORRECT, THE QUESTION ABOUT VALIDITY OF REOPENING IS NOTHING BUT AN ACADEMIC ISSUE. 4. LEARNED DEPARTMENTAL REPRESENTATIVE FAIRLY ACCEPTS THE ABOVE POSITION, EVEN AS HE EMPHATICALLY HIGHLIGHTS THAT THE LEARNED CIT(A) WAS IN ERROR IN QUASHING THE REOPENING PROCEED INGS. 5. IN VIEW OF THE ABOVE DISCUSSIONS, AND HAVING NOTED THE UNDISPUTED FACTUAL POSITION THAT THE ELIGIBLE INVESTMENTS WERE MADE WITHIN SIX MONTHS FROM THE DATE OF RECEIVING SALE CONSIDERATION, WE FIND THAT THE ISSUE IS INDEED COVERED BY HON BLE JURISD ICTIONAL HIGH COURT S JUDGMENT IN THE CASE OF JYONTINDRA H SHODHAN (SUPRA) WHICH HAS, INTER ALIA, OBSERVED AS FOLLOWS: 2 .THE FACTS OF THIS CASE ARE THAT ON 07.08.1982 THE ASSESSEE HAD SOLD TWO PLOTS OF LAND FOR RS.8,98,775/ - . THE ORIGINAL ASSESSMENT MADE UNDER SECTION 143(3) WAS SET ASIDE BY THE CIT(A) VIDE ORDER DATED 28.08.1989 AND THE ASSESSING OFFICER WAS DIRECTED TO MAKE FRESH ASSESSMENT. THEREAFTER, THE ASSESSING OFFICER COMPLETED THE FRESH ASSESSMENT AND PASSED HIS ORDER ON 31.03.1992. IN THE FRESH ASSESSMENT, THE ASSESSEE CLAIMED DEDUCTION UNDER SECTION 54E OF THE ACT ON THE BASIS OF INVESTMENT OF RS.1,89,400/ - MADE IN NRDB ON 20TH FEBRUARY, 1987, WITHIN SIX MONTHS OF THE RECEIPT OF FINAL INSTALLMENT. HOWEVER, THE ASSESSING OFFICER, REJECTED THE CL AIM OF THE ASSESSEE. 2.1 AGAINST THE ORDER OF THE ASSESSING OFFICE, THE ASSESSEE FILED AN APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). THE CIT(A) VIDE DISMISSED THE SAID APPEAL. BEING AGGRIEVED BY THE SAME, THE ASSESSEE AGAIN FILED AN APPEAL BE FORE THE TRIBUNAL. THE TRIBUNAL VIDE IMPUGNED ORDER DATED 03.07.2003 DISMISSED THE APPEAL OF THE ASSESSEE. HENCE, THIS APPEAL IS FILED AT THE INSTANCE OF THE ASSESSEE. ITA N O . 1135 TO 113 8 AND 114 1 / RJT/201 5 ASSESSMENT YEAR: 005 - 06 PAGE 4 OF 5 3. WHILE ADMITTING THIS APPEAL ON 20.09.2004, THE COURT HAD FORMULATED THE FOLLOWING SU BSTANTIAL QUESTIONS OF LAW: - (I) WHETHER, THE ITAT IS RIGHT IN LAW AND ON FACTS IN HOLDING THAT BENEFIT OF SECTION 54E IS AVAILABLE WHERE THE ASSESSEE HAS INVESTED OR DEPOSITED THE WHOLE OR ANY PART OF NET CONSIDERATION IN ANY SPECIFIED ASSET WITHIN SIX M ONTHS FROM THE DATE OF CONSIDERATION RECEIVED AND NOT FROM THE DATE OF SUCH TRANSFER? (II) WHETHER, IN THE FACTS AND CIRCUMSTANCES OF THE CASE,THE DEDUCTION UNDER SECTION 54E IS AVAILABLE WHEN THE INVESTMENT IN THE SPECIFIED ASSET IS MADE WITHIN A PERIOD OF 6 MONTHS FROM THE DATE OF TRANSFEROR FROM THE DATE OF RECEIPTS OF SALE CONSIDERATION ?' 4. MR. SOPARKAR, LEARNED ADVOCATE FOR THE APPELLANT - ASSESSEE HAS CONTENDED THAT ALL THE AUTHORITIES HAVE COMMITTED ERROR IN PASSING THE ORDERS. HE SUBMITTED THAT TH E ASSESSEE HAD RECEIVED RS.5,08,805/ - BY WAY OF CASH AS UNDER: - SL. NO. RS. DATE 1 RS.1,68,266.60 06/11/80 2 RS.1,87,538.38 07/08/82 3 RS.25,000.00 17/09/84 4 RS.25,000.00 28/11/84 5 RS.83,000.00 03/01/84 6 RS.20,000.00 21/09/85 4.1 THE REFORE, HE SUBMITTED THAT THE STIPULATED PERIOD OF SIX MONTHS HAVE TO BE COUNTED FROM 21ST SEPTEMBER, 1985 I.E. FROM THE DATE OF RECEIPT OF CONSIDERATION. 5. LEARNED ADVOCATE FOR THE RESPONDENT - REVENUE HAS SUPPORTED THE IMPUGNED JUDGMENT AND ORDER OF THE TRIBUNAL AND SUBMITTED THAT THE PRESENT APPEAL DESERVE TO BE DISMISSED IN VIEW OF THE CONCURRENT FINDINGS OF ALL THE AUTHORITIES NAMELY THE ASSESSING OFFICER, CITA(A) AND THE TRIBUNAL. HE HAS ALSO DRAWN OUR ATTENTION TO THE REASONINGS ADOPTED BY THE TRIBUN AL WHILE DECIDING THE APPEAL. THEREFORE, HE URGED THAT THIS COURT MAY DISMISS THE PRESENT APPEAL. 6. WE HAVE HEARD LEARNED ADVOCATE FOR THE PARTIES AND PERUSED THE MATERIAL ON RECORD. IN OUR VIEW, THE CONTENTION OF LEARNED ADVOCATE FOR THE APPELLANT - ASSES SEE IS MISCONCEIVED INASMUCH AS THE SIX MONTHS' PERIOD WILL HAVE TO BE COUNTED WHEN SALE - DEED WAS EXECUTED I.E. FROM 07.08.1982. THEREFORE, WE ARE OF THE OPINION THAT THE CONTENTION OF LEARNED ADVOCATE FOR THE APPELLANT - ASSESSEE IS NOT ACCEPTABLE. 7. FUR THER, THE TRIBUNAL IN PARAGRAPH NO.17 OF ITS ORDER HAS OBSERVED AS UNDER: - '17. FROM THE AFORESAID DISCUSSION, IT IS VERY CLEAR THAT AN ASSESSEE WHO DESIRED TO AVAIL BENEFIT OF SECTION 54E MUST STRICTLY SATISFY ALL THOSE CONDITIONS WHICH ARE PROVIDED THER EIN. ONE OF THE CONDITIONS OF THE SECTION IS THAT ASSESSEE IS TO DEPOSIT WHOLE OR ANY PART OF THE NET CONSIDERATION IN ANY SPECIFIED ASSETS WITHIN A PERIOD OF SIX MONTHS AFTER THE DATE OF TRANSFER. THERE IS NO DISPUTE ABOUT THE FACTS THAT THE TRANSFER IN T HE PRESENT CASE TOOK PLACE WHEN SALE DEED WAS EXECUTED AND REGISTERED ON 07.08.1982 AND THE INVESTMENT OF RS.1,89,904/ - IS MADE BY THE ASSESSEE IN NATIONAL RURAL DEVELOPMENT BONDS ON 20.02.1987 I.E. AFTER THE STIPULATED PERIOD OF 6 MONTHS FROM THE DATE OF TRANSFER. FURTHER, THIS CASE DOES NOT FALLS UNDER THE PROVISIONS TO SEC. 54E(1) WHEREOF THE PERIOD OF SIX MONTHS IS ITA N O . 1135 TO 113 8 AND 114 1 / RJT/201 5 ASSESSMENT YEAR: 005 - 06 PAGE 5 OF 5 ALLOWED TO BE RECKONED FROM THE DATE OF RECEIPT INSTEAD OF DATE OF TRANSFER. THE CASE OF ASSESSEE BEING NOT A CASE OF COMPULSORY ACQUISITION OF PROPERTY, THE BENEFIT GRANTED UNDER THE PROVISION WOULD NOT BE AVAILABLE TO THE ASSESSEE. THE CONTENTION OF THE ASSESSE THAT THIS STIPULATED PERIOD OF SIX MONTHS WHICH IS TO BE RECKONED FROM THE DATE OF RECEIPT OF CONSIDERATION IS NOT ACCEPTABLE. IN VI EW OF CLEAR LANGUAGE OF SECTION 54E(1), THE ALTERNATE SUBMISSION, THAT THE VIEW BENEFICIAL TO THE ASSESSEE IS TO BE ACCEPTED, IS ALSO NOT ACCEPTABLE. 8. IN VIEW OF THE AFORESAID DISCUSSIONS, WE ARE IN COMPLETE AGREEMENT WITH THE VIEW TAKEN BY THE TRIBUNAL . THE TRIBUNAL HAS NOT COMMITTED ANY ERROR IN DISMISSING THE APPEAL OF THE ASSESSEE. HENCE, THE PRESENT APPEAL IS DISMISSED. THE QUESTIONS OF LAW RAISED IN THIS APPEAL IS ANSWERED IN FAVOUR OF THE REVENUE AND AGAINST THE ASSESSEE. ACCORDINGLY, WE HOLD THAT THE TRIBUNAL WAS RIGHT IN LAW IN HOLDING THAT BENEFIT OF SECTION 54E IS AVAILABLE WHERE THE ASSESSEE HAS INVESTED OR DEPOSITED THE WHOLE OR ANY PART OF NET CONSIDERATION IN ANY SPECIFIED ASSET WITHIN SIX MONTHS FROM THE DATE OF CONSIDERATION RECEIVED AND NOT FROM THE DATE OF SUCH TRANSFER. 6. RESPECTFULLY FOLLOWING THE ESTEEMED VIEWS OF HON BLE JURISDICTIONAL HIGH COURT, WE APPROVE THE CONCLUSIONS ARRIVED AT BY THE CIT(A) ON MERITS. ONCE THE ENTIRE ADDITIONS MADE DURING THE REASSESSMENT PROCEEDINGS ARE DE LETED, AS IN THIS CASE, THE VALIDITY OF REOPENING THE ASSESSMENT IS ONLY AN ACADEMIC ISSUE. WE, THEREFORE, APPROVE THE CONCLUSIONS ARRIVED AT BY THE CIT(A), IN EFFECT, AND DECLINE TO INTERFERE IN THE MATTER. 7. IN THE RESULT, ALL THE FIVE APPEALS ARE DISM ISSED. PRONOUNCED IN THE OPEN COURT TODAY ON 23RD DAY OF DECEMBER, 2015. SD/ - SD/ - RAJPAL YADAV PRAMOD KUMAR (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) AHMEDABAD , THE 23 RD DAY OF DECEMBER , 2015 COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT