Mr. Daryl Mario Mathias, Mangalore V. Addl.D.I.T., Mangalore

ITA 1402/BANG/2012

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 68333 (ITAT-BANGALORE)
• Duration Of Justice: 11 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-10-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 30-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A SUNDARARAJAN
• Assessee Lawyers: NITIN J SHETTY
• Section: 143(3); 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH C BEFORE SHRI GEORGE GEORGE K, JUDICIAL MEMBER AND SHRI JASON P. BOAZ, ACCOUNTANT MEMBER I.T.(I.T) A. NO.1402/BANG/2012 (ASSESSMENT YEAR : 2009-10) MR. DARYL MARIO MATHIAS , 2-88/6, SUSHANT, GURU NAGAR, KONCHADY POST, MANGALORE-575 005 . APPELLANT PAN AAWPM 7919G VS. ASST. DIRECTOR OF INCOME TAX (INTERNATIONAL TAXATIO N) , MANGALORE. .. RESPONDENT. APPELLANT BY : SHRI NITIN J SHETTY. RESPONDENT BY : SHRI A. SUNDARA RAJAN. DATE OF HEARING : 28.8.2013. DATE OF PRONOUNCEMENT : 4.10.2013. O R D E R PER SHRI JASON P. BOAZ : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), MYSORE DT.1.6.2012 FOR ASS ESSMENT YEAR 2009-10. 2. THE FACTS OF THE CASE, IN BRIEF, ARE AS UNDER : 2.1 THE ASSESSEE, A NON-RESIDENT INDIVIDUAL, WORKIN G IN THE MERCHANT NAVY FILED HIS RETURN OF INCOME FOR ASSESSMENT YEAR 2009-10 ON 26. 5.2009, DECLARING TOTAL INCOME 2 ITA NO.1402 /BANG/12 OF RS.69,69,490. THIS INCLUDED LONG TERM CAPITAL G AINS (LTCG) OF RS.61,99,663 ARISING ON SALE OF AN IMMOVABLE PROPERTY SITUATED AT NO.79 , PADAVU VILLAGE OF MANGALORE TALUK, DAKSHINA KANNADA DISTRICT, KARNATAKA BY REGD . SALE DEED DT.24.11.2008 FOR A TOTAL CONSIDERATION OFRS.1,74,00,000. THIS PROPERTY WAS PURCHASED BY THE ASSESSEE VIDE REGD. SALE DEED DT.27.8.2004 FOR A CONSIDERATI ON OF RS.12,00,000. THE RETURN OF INCOME WAS PROCESSED U/S. 143(1) OF THE INCOME TAX ACT, 1961 (THE ACT IN SHORT) AND THE CASE WAS SUBSEQUENTLY TAKEN UP FOR SCRUTINY. THE ASSESSMENT WAS COMPLETED BY AN ORDER UNDER SECTION 143(3) OF THE ACT ON 23.12.2 011 WHEREIN THE LTCG ON SALE OF THIS PROPERTY WAS RECOMPUTED AT RS.1,11,99,634 AS A GAINST RS.61,99,663 DECLARED BY THE ASSESSEE IN THE RETURN OF INCOME FOR THE PERIOD UNDER CONSIDERATION. THIS WAS DUE TO THE ASSESSING OFFICERS ACTION IN RESTRICTING TH E ASSESSEE'S ELIGIBLE EXEMPTION UNDER SECTION 54EC OF THE ACT TO RS.50 LAKHS AS AGAINST T HE ASSESSEE'S CLAIM OF RS.1 CRORE INVESTED IN NATIONAL HIGHWAY AUTHORITY OF INDIA BON DS (NHAI BONDS) IN NOV., 2008 AND RURAL ELECTRIFICATION CORPORATION BONDS (REC BONDS) IN MAY, 2009. 2.2 AGGRIEVED BY THE ORDER OF ASSESSMENT FOR ASSESS MENT YEAR 2009-10 DT.23.12.2011, THE ASSESSEE PREFERRED AN APPEAL BEF ORE THE LEARNED CIT(APPEALS), MYSORE WHO DISMISSED THE ASSESSEE'S APPEAL BY HIS O RDER DT.1.6.2012. 3.0 AGGRIEVED BY THE ORDER OF THE CIT (APPEALS), MY SORE DT.1.6.2012, FOR ASSESSMENT YEAR 2009-10, THE ASSESSEE IS NOW IN APP EAL BEFORE US. THE GROUNDS 3 ITA NO.1402 /BANG/12 RAISED BY THE ASSESSEE BEFORE RUN INTO 12 PAGES, AR E NARRATIVE, ARGUMENTATIVE AND INTER ALIA APPEAR TO INCLUDE SUBMISSIONS ALSO. WHEN THIS WAS POINTED OUT TO THE LEARNED AUTHORISED REPRESENTATIVE, HE SUBMITTED BEF ORE US THAT THE ONLY ISSUE OF GRIEVANCE TO THE ASSESSEE IN THIS APPEAL WAS THE RE STRICTION OF THE EXEMPTION UNDER SECTION 54EC OF THE ACT TO RS.50 LAKHS BY THE AUTHO RITIES BELOW AS AGAINST EXEMPTION OF RS.1 CRORE CLAIMED BY THE ASSESSEE. WE WILL, TH EREFORE, ONLY ADJUDICATE THE ISSUE OF THE ELIGIBLE EXEMPTION UNDER SECTION 54EC OF THE AC T. 4.1 THE LEARNED AUTHORISED REPRESENTATIVE, IN SUPPO RT OF THE ASSESSEE'S CLAIM FOR EXEMPTION OF RS.1 CRORE UNDER SECTION 54EC OF THE A CT PLACED RELIANCE ON THE DECISION OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE CA SE OF VIVEK JAIRAZBHOY V DCIT (ITA NO.236/BANG/2012 DT.14.12.2012) WHEREIN ON SIMILAR FACTS I.E. INVESTMENT OF RS.50 LAKHS EACH IN SPECIFIED SECURITIES WAS MADE IN TWO DIFFERENT FINANCIAL YEARS, BUT WITHIN A PERIOD OF SIX MONTHS FROM THE DATE OF SALE, IT WA S HELD THAT THE ASSESSEE IS ENTITLED TO EXEMPTION OF RS.1 CRORE AS THE SIX MONTH PERIOD FOR INVESTMENT IN SPECIFIED SECURITIES INVOLVED TWO FINANCIAL YEARS. IT WAS SU BMITTED BY THE LEARNED AUTHORISED REPRESENTATIVE THAT IN COMING TO THIS FINDING THE C O-ORDINATE BENCH OF THE ITAT IN THE CASE OF VIVEK JAIRAZBHOY (SUPRA) FOLLOWED THE DECISION OF THE ITAT, AHMEDABA D IN THE CASE OF ASPI GINWALA & OTHERS V ACIT (ITA NOS.3226 & 3227/AHD/2011 DT.30.3.2012) WHEREIN ON SIMILAR FACTS I.E. INVESTMENTS OF RS.50 LAKHS EACH WAS MADE IN TWO 4 ITA NO.1402 /BANG/12 DIFFERENT FINANCIAL YEARS BUT WITHIN THE PERIOD OF SIX MONTHS FROM THE DATE OF SALE, IT WAS HELD IN PARA 8 THEREOF THAT THE ASSESSEE IS ENT ITLED TO EXEMPTION OF RS.1 CRORE, AS THE SIX MONTH PERIOD FOR INVESTMENT IN SPECIFIED S ECURITIES INVOLVED TWO FINANCIAL YEARS. IT WAS SUBMITTED BY THE LEARNED AUTHORISED REPRESENTATIVE THAT THE FACTS OF THE CASE ON HAND WERE IDENTICAL TO THE CITED CASES OF THE TRIBUNAL VIZ. VIVEK JAIRAZBHOY (SUPRA) AND ASPI GINWALA (SUPRA) AND THEREFORE THIS ISSUE BEING COVERED IN FAVOUR OF THE ASSESSEE, THE ASSESSEE IS ENTITLED TO AND OUGHT TO BE ALLOWED EXEMPTION OF RS.1 CRORE AS THE SAID INVESTMENTS AMOUNTING TO RS.1 CRO RE WERE MADE IN TWO DIFFERENT FINANCIAL YEARS BUT WITHIN SIX MONTHS FROM THE DATE OF SALE. 4.2 PER CONTRA, THE LEARNED DEPARTMENTAL REPRESENTA TIVE SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW AND BEFORE US ALSO PLACED REL IANCE ON AN EARLIER JUDGMENT, OF THE ITAT, JAIPUR BENCH IN THE CASE OF ACIT V RAJ KUM AR JAIN & SONS (HUF) (ITA NO.648/JP/2011 DT.30.1.2012) WHEREIN ON SIMILAR FAC TS, THE TRIBUNAL WAS OF THE VIEW THAT A LIBERAL INTERPRETATION WILL LEAD TO DISCRIMI NATION ADVERSELY AFFECTING THOSE WHO SELL PROPERTY IN OCTOBER TO MARCH OF THE SAME FINAN CIAL YEAR. IN THIS VIEW OF THE MATTER, THEY CAME TO THE CONCLUSION THAT FOR INVEST MENT TO BE MADE WITHIN SIX MONTHS, THE EXEMPTION UNDER SECTION 54EC OF THE ACT IS TO BE RESTRICTED TO RS.50 LAKHS ONLY. 5 ITA NO.1402 /BANG/12 4.3.1 WE HAVE HEARD BOTH PARTIES AND THEIR CONTENTI ONS ON THE ISSUE OF THE EXEMPTION UNDER SECTION 54EC OF THE ACT. THE LEARN ED AUTHORISED REPRESENTATIVE HAS FILED A PAPER BOOK CONTAINING A SYNOPSIS OF THE ISS UE INVOLVED, CITED, RELIED AND PLACED ON RECORD CERTAIN JUDICIAL DECISIONS AND CBDT CIRCUL ARS ETC. IN SUPPORT OF THE ASSESSEE'S CASE. THE LEARNED DEPARTMENTAL REPRESEN TATIVE HAS ALSO PLACED ON RECORD COPIES OF CERTAIN JUDICIAL DECISIONS IN SUPPORT OF T HE STAND OF REVENUE. 4.3.2 THE ASSESSEE, IN THE RELEVANT PERIOD SOLD AN IMMOVABLE PROPERTY SITUATED AT NO.79, PADAVU VILLAGE, MANGALORE, DAKSHIN KANNADA D ISTRICT BY REGISTERED SALE DEED DT.24.11.2008 FOR A CONSIDERATION OF RS.1,74,00,000 . AS PER THE DETAILS ON RECORD, THE ASSESSING OFFICER NOTED THAT THE ASSESSEE INVESTED A SUM OF RS.50 LAKHS IN NHAI BONDS ON 30.11.2008 AND A FURTHER SUM OF RS.50 LAKHS IN R EC BONDS ON 31.5.2009. THE ASSESSEE COMPUTED THE LONG TERM CAPITAL GAINS ON SA LE OF THIS PROPERTY AT RS.61,99,633 AFTER CLAIMING EXEMPTION OF RS. 1 CROR E UNDER SECTION 54EC OF THE ACT. THE ASSESSING OFFICER OBSERVED THAT THE SALE OF IM MOVABLE PROPERTY WAS ON 24.11.2008 WHICH PERTAINED TO THE PERIOD RELEVANT T O ASSESSMENT YEAR 2009-10 AND IN THIS VIEW OF THE MATTER RESTRICTED THE EXEMPTION UN DER SECTION 54EC OF THE ACT TO RS.50 LAKHS INVESTED ON 30.11.2008 IN NHAI BONDS. IN RESPECT OF FURTHER SUM OF RS.50 LAKHS INVESTED IN MAY, 2009 (I.E. RS.30 LAKHS BY CH EQUE DT.12.5.2009 AND RS.20 LAKHS BY CHEQUE DT.22.5.2009), THE ASSESSING OFFICER NOTI NG THAT THIS INVESTMENT PERTAINED 6 ITA NO.1402 /BANG/12 TO THE PERIOD RELEVANT TO ASSESSMENT YEAR 2010-11 W HICH WAS ANOTHER FINANCIAL YEAR, DID NOT CONSIDER THE SAME FOR EXEMPTION UNDER SECTI ON 54EC OF THE ACT. 4.3.3 ON APPEAL BY THE ASSESSEE, THE LEARNED CIT (A PPEALS) DISMISSED THE ASSESSEE'S APPEAL BY ORDER DT.1.6.2012, HOLDING AT PARA 3.2 AN D 3.3 ON PAGES 5 & 6 THEREOF AS UNDER : 3.2 I HAVE CONSIDERED THE ISSUE RAISED BY THE AS SESSING OFFICER AND THE ARGUMENTS OF THE APPELLANT. DURING THE COURSE OF H EARING, IT WAS EXPLAINED BY THE APPELLANT THAT THE DEPOSITS WERE MADE ON 12. 5.2009 AND 22.5.2009 WHICH IS WITHIN 6 MONTHS BUT THE ALLOTMENT OF BONDS IS LATER. RELIANCE WAS PLACED ON ITAT (AHMEDABAD) IN ASPI GINWALA VS. ACIT 2012 (4) TMI 195 (TRI). IN THIS CASE, CBDT CIRCULAR NO.3/2008 WAS C ITED. IN THE CBDT CIRCULAR, IT IS CLEARLY EXPLAINED THAT IN VIEW OF LIMITED NU MBER OF BONDS AVAILABLE THE PURPOSE OF IMPOSITION OF RESTRICTION OFRS.50,00,000 IS TO GIVE EQUITABLE DISTRIBUTION OF LIMITED NUMBER OF BONDS. HON'BLE I TAT JAIPUR A BENCH IN ACIT VS. SRI RAJ KUMAR JAIN & SONS (HUF) ADDRESSING THE I SSUE WHETHER AS PER SECTION 54EC, INVESTMENT WITHIN 6 MONTHS IS INVESTM ENT FOR THAT PARTICULAR FY IN WHICH TRANSFER HAS TAKEN PLACE AND SAID PERIO D OF 6 MONTHS WOULD NOT INCLUDE SOME PART OF SUBSEQUENT FY AND WHETHER IN VIEW OF THE ABOVE, ONLY INVESTMENT OF RS.50,00,000 MADE ON 31.3.2008 FOR TH E FY 2007-08, IT WAS HELD BY HON'BLE TRIBUNAL IN FAVOUR OF THE DEPARTMEN T. IN THIS CASE, LIKE IN THE CASE OF THE APPELLANT RS.50,00,000 WAS INVESTED ON 31.3.2008 AND ANOTHER RS.50,00,000 WAS INVESTED ON 10.6.2008, THE ASSESSEE CLAIMED EXEMPTION UNDER SECTION 54EC FOR THE ENTIRE RS.1 CR ORE WHILE THAT ASSESSING OFFICER RESTRICTED THE DEDUCTION TORS.50,00,000. O N APPEAL, THE CIT (APPEALS) HELD THAT INVESTMENT OF RS.50,00,000 EACH HAD BEEN MADE DURING 2 FYS AND TOTAL INVESTMENT IS MADE WITHIN 6 MONTHS AND HENCE ALLOWED THE EXEMPTION WHICH WAS REVERSED BY HON'BLE TRIBUNAL. 3.3 I AM COMPLETELY IN AGREEMENT WITH THE FINDINGS OF THE HON'BLE TRIBUNAL AND ACCORDINGLY HOLD THAT THE APPELLANT IS NOT ELIGIBLE FOR THE EXEMPTION CLAIMED FOR THE 2 ND INVESTMENT OVER AND ABOVE RS.50,00,000. HENCE THE APPEAL IS DISMISSED. 7 ITA NO.1402 /BANG/12 4.3.4 FROM THE FACTS ON RECORD IT IS SEEN T HAT THE ASSESSEE, IN THE PERIOD UNDER CONSIDERATION, SOLD AN IMMOVABLE PROPERTY SITUATED AT NO.79, PADAVU VILLAGE, MANGALORE ON 24.11.2008 FOR A CONSIDERATION OF RS.1 ,74,00,000. AS PER THE DETAILS ON RECORD, IT IS SEEN THAT THE ASSESSEE INVESTED A SUM OF RS.50 LAKHS ON 30.11.2008 IN NHAI BONDS. A FURTHER SUM OF RS.50 LAKHS HAS INVE STED BY THE ASSESSEE IN RURAL ELECTRIFICATION CORPORATION BONDS (REC BONDS) IN M AY, 2009, THE DETAILS OF WHICH ARE : RS. 30 LAKHS BY CHEQUE DT.12.5.2009 OF SBI, KANKANA DY BRANCH AND RS.20 LAKHS BY CHEQUE NO.0312802 DT.22.5.2009 OF SBI, KANKANADY BR ANCH. THUS IT IS CLEAR THAT IN ALL THE ASSESSEE HAD INVESTED AN AMOUNT OF RS.1 CRORE O UT OF THE SALE CONSIDERATION IN BONDS ISSUED BY NHAI AND REC LTD. WITHIN SIX MONTH S FROM THE DATE OF SALE OF THE SAID PROPERTY, WHICH FACT IS NOT DISPUTED BY THE AUTHORI TIES BELOW. IN THE RETURN OF INCOME FILED FOR ASSESSMENT YEAR 2009-10, THE ASSESSEE COM PUTED THE LTCG ARISING ON THE SALE OF THE SAID PROPERTY AT PADAVU VILLAGE, MANGAL ORE AT RS.61,99,663 AFTER CLAIMING EXEMPTION OF RS.1 CRORE UNDER SECTION 54EC OF THE A CT ON ACCOUNT OF THE INVESTMENTS IN REC AND NHAI BONDS. AS BROUGHT OUT IN PARA 4.3. 2 AND 4.3.3 OF THIS ORDER (SUPRA) THE EXEMPTION UNDER SECTION 54EC WAS RESTRICTED TO RS.50 LAKHS BY BOTH THE ORDERS OF ASSESSING OFFICER AND THE LEARNED CIT (APPEALS) REL YING ON THE PROVISO TO SECTION 54EC OF THE ACT, ON THE CBDT CIRCULAR NO.3/2008 AND ON T HE DECISION OF THE JAIPUR BENCH OF 8 ITA NO.1402 /BANG/12 THE ITAT IN THE CASE OF ACIT V SRI RAJ KUMAR JAIN & SONS (HUF) (2012) 19 TAXMANN.COM 27 (JP). 4.4.1 THE ISSUE NOW BEFORE US FOR ADJUDICATION IS WH ETHER THE PROVISO TO SECTION 54EC OF THE ACT RESTRICTS THE EXEMPTION TO RS.50 LAKHS O R DOES IT MERELY RESTRICT THE INVESTMENT THAT CAN BE MADE IN A SINGLE FINANCIAL Y EAR TO RS.50 LAKHS ? 4.4.2 AS POINTED OUT BY THE LEARNED AUTHORISED REPR ESENTATIVE, ON SIMILAR FACTS AS IN THE CASE ON HAND, A CO-ORDINATE BENCH OF THIS TRIBU NAL IN THE CASE OF VIVEK JAIRAZBHOY V DCIT IN ITS ORDER IN ITA NO.236/BANG/2012 DT.14.1 2.2012, HELD THAT THE ASSESSEE IS ENTITLED TO EXEMPTION OF RS.1 CRORE UNDER SECTION 5 4EC OF THE ACT AS THE SIX MONTHS PERIOD FOR INVESTMENT IN SPECIFIED SECURITIES INVOL VED TWO FINANCIAL YEARS. THE OPERATIONAL PORTION OF THE AFORESAID ORDER OF THE T RIBUNALS (SUPRA) WHERE THIS ISSUE HAS BEEN CONSIDERED IN DETAIL AT PARAS 9.5 TO 10.3 AT PAGES 14 TO 19 THEREOF IS EXTRACTED AND REPRODUCED HEREUNDER : 9.4 THE ISSUES NOW BEFORE US FOR ADJUDICATION ARE THE FOLLOWING : (I) WHETHER THE PROVISO TO SECTION 54EC OF THE ACT RESTRICTS THE EXEMPTION TO RS.50 LAKHS OR DOES IT MERELY RESTRICT THE INVESTM ENT THAT CAN BE MADE IN A SINGLE FINANCIAL YEAR TO RS.50 LAKHS ? (II) IF THE ANSWER TO THE ABOVE IS THAT IT IS THE INVESTMENT THAT IS RESTRICTED AND NOT THE EXEMPTION, THEN IN VIEW OF THE FACT THA T NHAI HAD ALLOTTED THE BONDS ONLY ON 30.6.2008 IN RESPECT OF THE SECOND IN VESTMENT OF RS.50 LAKHS, WHICH IS BEYOND THE PERIOD OF SIX MONTHS FROM THE D ATE OF SALE OF PROPERTY, CAN IT BE SAID THAT THE SECOND INVESTMENT OF RS.50 LAKHS IS SAID TO HAVE BEEN MADE OUTSIDE THE PERIOD OF SIX MONTHS AND NO EXEMPT ION IS TO BE ALLOWED UNDER SECTION 54EC OF THE ACT IN RESPECT OF THE SAM E. 9 ITA NO.1402 /BANG/12 9.5 THE LEARNED COUNSEL FOR THE ASSESSEE HAS PLACED RELIANCE ON THE DECISION OF THE ITAT, AHMEDABAD BENCH IN THE CASE O F ASPI GINWALA & OTHERS VS. ACIT IN ITA NOS.3226 & 3227/AHD/2011 DT. 30.3.2012 WHEREIN ON SIMILAR FACTS I.E INVESTMENT OF RS.50 LAKHS EACH WA S MADE IN TWO DIFFERENT FINANCIAL YEARS BUT WITHIN THE PERIOD OF SIX MONTHS FROM THE DATE OF SALE, IT WAS HELD IN PARA 8 OF THE SAID ORDER THAT THE ASSES SEE IS ENTITLED TO EXEMPTION OF RS.1 CRORE AS THE SIX MONTHS PERIOD FO R INVESTMENT IN ELIGIBLE INVESTMENTS INVOLVED IN TWO FINANCIAL YEARS. 9.6 THE LEARNED DEPARTMENTAL REPRESENTATIVE HOWEVER PLACED BEFORE US AN EARLIER JUDGMENT, CONTRARY TO THE DECISION OF THE AHMEDABAD BENCH OF THE ITAT, RENDERED BY THE ITAT, JAIPUR BENCH IN THE CASE OF ACIT VS. RAJ KUMAR JAIN & SONS IN ITA NO.648/JP/2011 DT.30.1.201 2 WHEREIN THE TRIBUNAL ON SIMILAR FACTS, WAS OF THE VIEW THAT A LIBERAL IN TERPRETATION WILL LEAD TO DISCRIMINATION ADVERSELY AFFECTING THOSE WHO SELL A PROPERTY AT ANY TIME FROM APRIL TO SEPTEMBER OF A FINANCIAL YEAR VIS--V IS THOSE WHO SELL PROPERTY IN THE PERIOD OCTOBER TO MARCH OF THE SAME FINANCIA L YEAR. IN THIS VIEW OF THE MATTER, THEY CAME TO THE CONCLUSION THAT FOR TH E INVESTMENT TO BE MADE WITHIN A PERIOD OF SIX MONTHS, THE EXEMPTION UNDER SECTION 54EC OF THE ACT IS TO BE RESTRICTED TO RS.50 LAKHS ONLY. 9.7 THE LEARNED COUNSEL FOR THE ASSESSEE PLACED RE LIANCE ON CIRCULAR NO.3/2008 DT.12.3.2008 ISSUED BY CBDT, BEING AN EXP LANATORY NOTE ON THE PROVISIONS RELATING TO DIRECT TAXES IN FINANCE ACT, 2007. IN THE SAID PARA 28.2 THEREOF THE REASON FOR IT TO SET A LIMIT ON TH E QUANTUM OF INVESTMENT BY A PERSON IN A FINANCIAL YEAR, READS AS UNDER : 28.2 THE QUANTUM OF INVESTIBLE BONDS ISSUED BY NHAI AND REC BEING LIMITED, IT WAS FELT NECESSARY TO ENSURE THAT THE B ENEFIT WAS AVAILABLE TO ALL THE INVESTORS. FOR THIS PURPOSE, IT WAS NECESSARY TO ENSURE THAT THE LIMITED NUMBER OF BONDS AVAILABLE FOR SUBSCRIPTION IS ALSO AVAILABLE FOR SMALL INVESTORS. THEREFORE, WITH A VIEW TO ENSURE EQUIT ABLE DISTRIBUTION OF BENEFITS AMONGST PROSPECTIVE INVESTORS, THE GOVERNM ENT DECIDED TO IMPOSE A CEILING ON THE QUANTUM OF INVESTMENT THAT COULD B E MADE IN SUCH BONDS. ACCORDINGLY, THE SAID SECTION HAS BEEN AMENDED SO A S TO PROVIDE FOR A CEILING ON INVESTMENT BY AN ASSESSEE IN SUCH LONG-T ERM SPECIFIED ASSETS. INVESTMENTS IN SUCH SPECIFIED ASSETS TO AVAIL EXEMP TION UNDER SECTION 54EC, ON OR AFTER 1 ST DAY OF APRIL, 2007 WILL NOT EXCEED FIFTY LAKH RUPE ES IN A FINANCIAL YEAR . 10 ITA NO.1402 /BANG/12 IT IS CLEAR FROM THE CIRCULAR NO.3/2008 OF CBDT (SU PRA) THAT THE GOVERNMENT ONLY INTENDED TO RESTRICT THE INVESTMENT IN A PARTI CULAR FINANCIAL YEAR AND THUS HAS FIXED A LIMIT OF RS.50 LAKHS AS PERMISSIBL E INVESTMENT IN A PARTICULAR FINANCIAL YEAR. IT ALSO APPEARS CLEAR THAT THE GOV ERNMENT DID NOT INTEND TO RESTRICT THE MAXIMUM AMOUNT OF EXEMPTION PERMISSIBL E UNDER SECTION 54EC OF THE ACT. THE FACT THAT THE LEGISLATURE HAS CONS CIOUSLY USED THE WORDS IN A FINANCIAL YEAR IN THE PROVISO TO SECTION 54EC OF THE ACT ALSO FO RTIFIES THE SAME. IF THE LEGISLATURE WANTED TO RESTRICT THE EX EMPTION ITSELF TO RS.50 LAKHS IT COULD HAVE SIMPLY DISPENSED WITH USING THE WORDS IN A FINANCIAL YEAR . 9.8 THE JUDICIAL DECISIONS RELIED UPON BY THE LEAR NED COUNSEL FOR THE ASSESSEE ALSO SUPPORTS THE STAND OF THE ASSESSEE. THE HON'BLE APEX COURT WHILE DECIDING THE CASE OF VIKRANT TYRES LTD VS. FI RST ITO REPORTED IN 247 ITR 821 HAVE ALREADY LAID DOWN THE LAW ON INTERPRETING OF STATUTES BY HOLDING THEREOF THAT :- IT IS SETTLED PRINCIPLE IN LAW THAT THE CO URTS WHILE CONSTRUING REVENUE ACTS HAVE TO GIVE A FAIR AND REASONABLE CONSTRUCTIO N TO THE LANGUAGE OF A STATUTE WITHOUT LEANING TO ONE SIDE OR THE OTHER, M EANING THEREBY THAT NO TAX OR LEVY CAN BE IMPOSED ON A SUBJECT BY AN ACT OF PARLIAMENT WITHOUT THE WORDS OF THE STATUTE CLEARLY SHOWING AN INTENTION T O LAY THE BURDEN ON THE SUBJECT. IN THIS PROCESS, THE COURTS MUST ADHERE TO THE WORDS OF THE STATUTE AND THE SO CALLED EQUITABLE CONSTRUCTION OF THOSE W ORDS OF THE STATUTE IS NOT PERMISSIBLE. THE TASK OF THE COURT IS TO CONSTRUE THE PROVISIONS OF THE TAXING ENACTMENTS ACCORDING TO THE ORDINARY AND NATURAL ME ANING OF THE LANGUAGE USED AND THEN TO APPLY THAT MEANING TO THE FACTS OF THE CASE AND IN THAT PROCESS IF THE TAX PAYER IS BROUGHT WITHIN THE NET HE IS CAUGHT, OTHERWISE HE HAS TO GO FREE. IN THE CASE OF CWT VS. HASHMATUNNISA BEGUM REPORTED IN 176 ITR 98 (SC), THE HON'BLE APEX COURT HELD THAT WHILE INTERPRETING STATUTES, LITERAL CONSTRUCTION HAS TO BE APPLIED REGARDLESS OF RESULT S AND THAT ONLY IN A SITUATION WHERE TWO VIEWS ARE REASONABLY POSSIBLE, SHOULD REFERENCE BE GIVEN TO THAT VIEW WHICH PROMOTES CONSTITUTIONALITY AND NOT WHERE THE STATUTE CAN BE READ ONLY IN A PARTICULAR WAY. THE FOLLOWING DECISIONS OF THE HON'BLE APEX COURT HAVE LAID DOWN THE PROPOSITION THAT PROVISIONS FOR DEDUCTION, EXEMPTIO N OR RELIEF ARE TO BE CONSTRUED LIBERALLY IN ORDER TO ADVANCE THE OBJECTIV E AND NOT TO FRUSTRATE IT. (I) CIT VS. GWALIOR RAYON SILK MANUFACTURING CO. LTD. (196 ITR 149)(SC) 11 ITA NO.1402 /BANG/12 (II) CIT VS. VEGETABLE PRODUCTS LTD. ( 88 ITR 192) (III) BAJAJ TEMPO LTD. VS. CIT (196 ITR 188)(SC) TAKING INTO CONSIDERATION THE OVERALL FACTS AND CIRCUMSTANCES OF THE CASE, THE CBDTS CIRCULAR NO.3/2008, AND THE PRINCI PLES LAID DOWN BY THE HON'BLE APEX COURT FOR INTERPRETING STATUTES, WE AR E OF THE CONSIDERED VIEW THAT IT WOULD BE IN THE FITNESS OF THINGS, TO FOLLO W THE DECISION OF THE ITAT, AHMEDABAD BENCH IN THE CASE OF ASPI GINWALA & OTHER S (SUPRA) RELIED ON BY THE ASSESSEE AND HOLD THAT THE ASSESSEE IS ENTITLED TO TOTAL DEDUCTION UNDER SECTION 54EC OF THE ACT SPREAD OVER A PERIOD OF TWO FINANCIAL YEARS @ RS.50 LAKHS EACH ON INVESTMENTS MADE IN SPECIFIED INSTRUM ENTS WITHIN A PERIOD OF SIX MONTHS FROM THE DATE OF SALE OF THE PROPERTY. 10.1 WE NOW PROCEED TO ADDRESS THE ISSUE AT (II) AS LAID OUT IN PARA 9.4 (SUPRA). AS PER FACTS ON RECORD, THE ASSESSEE HAD ISSUED A CHEQUE FOR RS.50 LAKHS TO NHAI FOR ALLOTMENT OF BONDS THAT WAS ENCAS HED BY NHAI ON 9.6.2008. THE SALE OF THE SAID PROPERTY TOOK PLACE ON 14.12.2007 AND THE SIX MONTHS PERIOD ENDED ON 13.6.2008. NHAI, HOWEVER, A S EVIDENT FROM THE RECORD, HAS ALLOTTED THE BONDS ONLY ON 30.6.2008 WH ICH IS AFTER THE SIX MONTH PERIOD. THE LEARNED CIT(APPEALS) HELD THAT T HE DATE OF ALLOTMENT IS WHAT IS TO BE CONSIDERED FOR RECKONING THE SIX MONT HS PERIOD AND THE SAME (VIZ. 30.6.2008) BEING BEYOND THE PERIOD OF SIX MON THS, IN THE INSTANT CASE, HAS DENIED THE EXEMPTION CLAIMED UNDER SECTION 54EC OF THE ACT FOR THE SECOND INVESTMENT OF RS.50 LAKHS. 10.2 THE ASSESSEE HAS PLACED RELIANCE ON A DECISION OF THE ITAT, BOMBAY BENCH IN THE CASE OF KUMARPAL AMRUTLAL DOSHI VS. DC IT IN ITA NO.1523/MUM/2010 DT.9.2.2011 WHEREIN THE TRIBUNAL R ELYING ON THE DECISION OF THE HON'BLE APEX COURT IN THE CASE OF C IT VS. OGALE GLASS WORKS LTD (25 ITR 529) HAS HELD THAT PAYMENT BY CHEQUE SU BSEQUENTLY REALIZED ON THE CHEQUE BEING HONOURED AND ENCASHED RELATES BACK TO THE DATE OF RECEIPT OF THE CHEQUE AND IN LAW THE DATE OF PAYMENT IS THE DATE OF DELIVERY OF THE CHEQUE. IN THE CITED CASE THE ASSESSEE THEREIN HAD ISSUED A CHEQUE TO NABARD ON 9.2.2006 WHICH WAS WITHIN THE PERIOD OF S IX MONTHS AS SPECIFIED IN SECTION 54EC. THE CHEQUE GOT ENCASHED ON 15.2.2 006 WHICH WAS AFTER A PERIOD OF SIX MONTHS. THE TRIBUNAL HELD THAT THE D ATE OF PAYMENT IS THE DATE OF TENDER OF THE CHEQUE I.E. 9.2.2006. IN THE INST ANT CASE OF THE ASSESSEE, THE CHEQUE DT.4.6.2008 ISSUED BY THE ASSESSEE FOR NHAI BONDS WAS ENCASHED BY NHAI ON 9.6.2008 WHICH IS BEFORE THE EXPIRY OF THE PERIOD OF SIX MONTHS (I.E. 13.6.2008) AND THEREFORE THE ASSESSEE IN THE PRESEN T CASE IS ON AN EVEN 12 ITA NO.1402 /BANG/12 BETTER FOOTING THAN THE CASE RELIED UPON BY THE LEA RNED COUNSEL FOR THE ASSESSEE. 10.3 FURTHER, IN THE CASE OF ASPI GINWALA & OTHERS (SUPRA) CITED EARLIER IN THIS ORDER, THE ASSESSEE WAS UNABLE TO INVEST IN BO NDS WITHIN A PERIOD OF SIX MONTHS AS THE ISSUE WAS NOT OPEN AND DID SO THE MOM ENT THE SAME WAS MADE OPEN TO PUBLIC AND THUS THE ALLOTMENT WAS MADE AFTER THE STATUTORY PERIOD OF SIX MONTHS. THE ITAT, AHMEDABAD BENCH, R ELYING ON AN EARLIER DECISION OF THE ITAT, MUMBAI IN THE CASE OF RAM AGA RWAL VS. JCIT REPORTED IN 81 ITD 163 HELD THAT THE ASSESSEE THEREIN WAS PR EVENTED BY SUFFICIENT CAUSE FROM INVESTING WITHIN THE STATUTORILY PERMIT TED PERIOD OF SIX MONTHS AND ALLOWED THE ASSESSEE EXEMPTION UNDER SECTION 54 EC OF THE ACT IN RESPECT OF THE SAID INVESTMENT. IN THE PRESENT CAS E BEFORE US, THE ASSESSEE HAS MADE PAYMENT FOR THE INVESTMENT IN NHAI WHICH W AS ENCASHED ON 9.6.2008 WELL WITHIN THE STATUTORILY PERMITTED PERI OD OF SIX MONTHS FROM THE DATE OF SALE OF THE PROPERTY (I.E. UPTO 13.6.2008). WHAT IS TO BE RECKONED HERE IS THE DATE OF PAYMENT AND NOT THE DATE OF ALL OTMENT AS THE SAME IS NOT IN THE CONTROL OF THE ASSESSEE. IN THIS VIEW OF TH E MATTER, WE HOLD THAT THE DATE OF PAYMENT (I.E. DATE OF ENCASHMENT OF CHEQUE) IS TO BE RECKONED FOR CALCULATING THE SIX MONTH PERIOD AND SINCE IN THIS CASE THE DATE OF PAYMENT / ENCASHMENT BEING WELL WITHIN THE PERIOD OF SIX MONT HS, THE ASSESSEE IS ENTITLED TO EXEMPTION UNDER SECTION 54EC OF THE ACT EVEN ON THE SECOND INVESTMENT OF RS.50 LAKHS MADE IN BONDS ISSUED BY N HAI. IT IS ORDERED ACCORDINGLY. RESPECTFULLY FOLLOWING THE AFORESAID DECISION OF TH E CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF VIVEK JAIRAZBHOY IN ITA NO.236/BANG/ 2012 DT.14.12.2012, WE HOLD THAT THE ASSESSEE IN THE CASE ON HAND IS ENTITLED TO EXE MPTION OF RS.1 CRORE UNDER SECTION 54EC OF THE ACT, AS THE SIX MONTH PERIOD FROM THE D ATE OF SALE I.E. 24.11.2008, FOR INVESTMENT IN ELIGIBLE SPECIFIED SECURITIES INVOLVE D TWO FINANCIAL YEARS AND THE INVESTMENTS OF RS.50 LAKH EACH IN NHAI BONDS WAS MA DE ON 30.11.2008 AND IN REC BONDS WERE MADE IN MAY, 2009 (VIZ. RS.30 LAKHS ON 1 2.5.2009 AND RS.20 LAKHS ON 13 ITA NO.1402 /BANG/12 22.5.2009) WHICH IS WITHIN SIX MONTHS FROM THE DATE OF SALE OF THE SAID PROPERTY. THE ASSESSING OFFICER IS DIRECTED TO ALLOW THE EXEMPTIO N UNDER SECTION 54EC OF THE ACT ACCORDINGLY. 5. IN THE RESULT, THE ASSESSEE'S APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 4 TH OCTOBER, 2013. SD/- SD/- (GEORGE GEORGE K) (JASON P BOAZ) JUDICIAL MEMBER ACCOUNTANT MEMB ER *REDDY GP COPY TO : 1. APPELLANT 2. RESPONDENT 3. C.I.T. 4. CIT(A) 5. DR, - C BENCH. 6. GUARD FILE. (TRUE COPY ) BY ORDER ASST. REGISTRAR, ITAT, BANGALORE .