NIAMAT MAHROOF VIRJI, MUMBAI V. ITO 17(3)(3), MUMBAI

ITA 1964/MUM/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 1588 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 8 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-12-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 21-03-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: NEIL PHILIP
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Cost of acquisition; Fair market value
• Section: 80C; 143(3); 50C; 54; 37; 15

Judgement Text

D B IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER ./ I.T.A. NO.1964 /MUM/2014 ( / ASSESSMENT YEAR : 2009-10) NIAMAT MAHROOF VIRJI, UNIT 232, 2 ND FLOOR, BUSSA UDYOG BHAVAN, T.J. ROAD, SEWREE. MUMBAI 400 015. / V. I.T.O. 17(3)(3), PIRAMAL CHAMBERS, OPP PAREL P.O., MUMBAI. ./ PAN : AAHPV1071H ( / APPELLANT ) .. ( / RESPONDENT ) ASSESSEE BY NONE REVENUE BY : SHRI NEIL PHILIP / DATE OF HEARING : 03-11-2016 / DATE OF PRONOUNCEMENT : 19-12-2016 / O R D E R PER RAMIT KOCHAR, ACCOUNTANT MEMBER THIS APPEAL, FILED BY THE ASSESSEE, BEING ITA NO. 1964/MUM/2014, IS DIRECTED AGAINST THE APPELLATE ORDER DATED 27 TH DECEMBER, 2013 PASSED BY LEARNED COMMISSIONER OF INCOME TAX (APPEALS)- 29, M UMBAI (HEREINAFTER CALLED THE CIT(A)), FOR THE ASSESSMENT YEAR 2009- 10, THE APPELLATE PROCEEDINGS BEFORE THE LEARNED CIT(A) ARISING FROM THE ASSESSMENT ORDER DATED 26 TH DECEMBER, 2011 PASSED BY THE LEARNED ASSESSING OFF ICER (HEREINAFTER CALLED THE AO) U/S 143(3) OF THE INC OME-TAX ACT,1961 (HEREINAFTER CALLED THE ACT). ITA 1964/MUM/2014 2 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE IN THE MEMO OF APPEAL FILED WITH THE INCOME-TAX APPELLATE TRIBUNAL, MUMBA I (HEREINAFTER CALLED THE TRIBUNAL) READ AS UNDER:- A) ADDITION U/S.50C - RS.19,104/- L. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) -29, MUMBAI [CIT(A)] ERRED ON FACTS AND IN LAW IN SUSTAI NING THE ADDITION MADE BY THE LEARNED INCOME TAX OFFICER - 1 7(3)(3), MUMBAI U/S 50C OF THE INCOME TAX ACT, 1961 TO THE E XTENT OFRS.19,104/-. 2. THE APPELLANT PRAYS THAT YOUR HONOURS HOLD THAT THE APPELLANT HAS NOT RECEIVED SUCH EXCESS AMOUNT AND H ENCE ADDITION U/S.50C OF RS.19,104/- MAY BE DELETED. B) DISALLOWING THE EXEMPTION CLAIMED U/S. 54EC - RS . 17,50,000/- 3. THE LEARNED CIT-(A) ERRED ON FACTS AND IN LAW IN DISALLOWING THE EXEMPTION CLAIMED BY THE APPELLANT U/S. 54EC OF RS. 17,50,000/-. 4.THE APPELLANT PRAYS THAT YOUR HONOURS HOLD THAT T HE APPELLANT HAD RIGHTLY CLAIMED EXEMPTION U/S. 54EC OF RS. 17,5 0,000/- AND HENCE DISALLOWANCE IN THIS REGARD MAY BE DELETED. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS AN INDIVIDUAL AND DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE HA D SHOWN INCOME FROM HOUSE PROPERTY, BUSINESS, OTHER SOURCES AND CAPITAL GAINS. THE ASSESSEE HAS EARNED CAPITAL GAIN ON THE SALE OF ANCESTRAL PROPER TY ALONG WITH HER BROTHER AND COUSINS VIZ. DEVJI KANJI BUILDING , PRINCESS ST REET, MUMBAI VIDE INDENTURE OF ASSIGNMENT MADE ON 13 TH OCTOBER, 2008 FOR A TOTAL CONSIDERATION OF RS.1,05,00,000/- . THE ASSESSEE DECLARED LONG TE RM CAPITAL GAINS OF NIL AFTER CLAIMING DEDUCTION U/S. 54EC OF THE ACT . 4. THE FIRST AND SECOND GROUND OF APPEAL RAISED BY THE ASSESSEE IS WITH RESPECT TO ADOPTION OF VALUE AS ADOPTED BY STAMP VA LUATION AUTHORITIES OF ITA 1964/MUM/2014 3 RS.1,06,12,500/- BY THE AO AS FULL VALUE OF CONSIDE RATION FOR THE PURPOSES OF SECTION 48 OF THE ACT OWING TO DEEMING PROVISIONS O F SECTION 50C OF THE ACT , AS AGAINST THE ACTUAL AGREEMENT VALUE OF RS 1,05,00 ,000/- FOR SALE OF THE ANCESTRAL PROPERTY BY THE ASSESSEE ALONG WITH HER B ROTHER AND COUSINS. THUS, THE ADDITION OF RS.19,104/- WAS MADE BY THE AO IN T HE HANDS OF THE ASSESSEE AS LONG TERM CAPITAL GAINS ON SALE OF THE ANCESTRAL PROPERTY AS ASSESSEES SHARE IN SAID PROPERTY OWING TO DIFFERENCE AS DETAI LED ABOVE U/S 50C OF THE ACT . THE ASSESSEE DID NOT CHALLENGE THE VALUE ADOP TED BY STAMP DUTY VALUATION AUTHORITIES AND DID NOT SOUGHT BEFORE THE AUTHORITIES BELOW TO REFER THE MATTER TO THE DVO FOR VALUATION. THE SAME IS AL SO NOT BEEN CONTENDED BEFORE US TO REFER THE MATTER TO DVO FOR VALUATION IN THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE BEFORE THE TRIBUNAL. SECTION 50C OF THE ACT IS A DEEMING PROVISIONS AND IS REPRODUCED HEREUNDER: [ SPECIAL PROVISION FOR FULL VALUE OF CONSIDERATION I N CERTAIN CASES. 50C. (1) WHERE THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF THE TRANSFER BY AN ASSESSEE OF A CAPITAL ASSET, BEING L AND OR BUILDING OR BOTH, IS LESS THAN THE VALUE ADOPTED OR ASSESSED BY ANY AUTH ORITY OF A STATE GOVERNMENT (HEREAFTER IN THIS SECTION REFERRED TO A S THE STAMP VALUATION AUTHORITY) FOR THE PURPOSE OF PAYMENT OF STAMP DUT Y IN RESPECT OF SUCH TRANSFER, THE VALUE SO ADOPTED OR ASSESSED SHALL, F OR THE PURPOSES OF SECTION 48 , BE DEEMED TO BE THE FULL VALUE OF THE CONSIDERATI ON RECEIVED OR ACCRUING AS A RESULT OF SUCH TRANSFER. (2) WITHOUT PREJUDICE TO THE PROVISIONS OF SUB-SECT ION (1), WHERE (A) THE ASSESSEE CLAIMS BEFORE ANY ASSESSING OFFI CER THAT THE VALUE ADOPTED OR ASSESSED BY THE STAMP VALUATION AU THORITY UNDER SUB-SECTION (1) EXCEEDS THE FAIR MARKET VALUE OF TH E PROPERTY AS ON THE DATE OF TRANSFER; (B) THE VALUE SO ADOPTED OR ASSESSED BY THE STAMP VALUATION AUTHORITY UNDER SUB-SECTION (1) HAS NOT BEEN DISPUT ED IN ANY APPEAL OR REVISION OR NO REFERENCE HAS BEEN MADE BE FORE ANY OTHER AUTHORITY, COURT OR THE HIGH COURT, THE ASSESSING OFFICER MAY REFER THE VALUATION OF TH E CAPITAL ASSET TO A VALUATION OFFICER AND WHERE ANY SUCH REFERENCE IS M ADE, THE PROVISIONS OF ITA 1964/MUM/2014 4 SUB-SECTIONS (2), (3), (4), (5) AND (6) OF SECTION1 6A, CLAUSE (I) OF SUB-SECTION (1) AND SUB-SECTIONS (6) AND (7) OF SECTION 23A, SU B-SECTION (5) OF SECTION 24, SECTION 34AA, SECTION 35 AND SECTION 37 OF THE WEAL TH-TAX ACT, 1957 (27 OF 1957), SHALL, WITH NECESSARY MODIFICATIONS, APPLY I N RELATION TO SUCH REFERENCE AS THEY APPLY IN RELATION TO A REFERENCE MADE BY THE ASSESSING OFFICER UNDER SUB-SECTION (1) OF SECTION 16A OF THA T ACT. EXPLANATION.FOR THE PURPOSES OF THIS SECTION, VAL UATION OFFICER SHALL HAVE THE SAME MEANING AS IN CLAUSE (R) OF SECTION 2 OF THE WEALTH-TAX ACT, 1957 (27 OF 1957). (3) SUBJECT TO THE PROVISIONS CONTAINED IN SUB-SECT ION (2), WHERE THE VALUE ASCERTAINED UNDER SUB-SECTION (2) EXCEEDS THE VALUE ADOPTED OR ASSESSED BY THE STAMP VALUATION AUTHORITY REFERRED TO IN SUB -SECTION (1), THE VALUE SO ADOPTED OR ASSESSED BY SUCH AUTHORITY SHALL BE TAKE N AS THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF THE TRANSFER.] THE LAW AS CONTAINED IN SECTION 50C OF THE ACT IS V ERY CLEAR AND AS IN THE INSTANT CASE ACTUAL SALE CONSIDERATION IS RS.1,05,0 0,000/- WHICH IS LOWER THAN THE VALUE AS ADOPTED BY STAMP DUTY VALUATION A UTHORITIES WHICH COMES TO RS.1,06,12,500/- . THE DEEMING FICTION OF SECTIO N 50C OF THE ACT SHALL COME INTO OPERATION AND THE VALUE AS ADOPTED BY STAMP VA LUATION AUTHORITIES SHALL BE DEEMED TO BE THE FULL VALUE OF CONSIDERATION FOR THE PURPOSES OF SECTION 48 OF THE ACT. THE ASSESSEE HAS NOT CHALLENGED THE VAL UE AS ADOPTED BY STAMP DUTY VALUATION AUTHORITIES AS FULL VALUE OF CONSIDE RATION AND HAS NOT SOUGHT REFERENCE TO DVO BEFORE THE AUTHORITIES BELOW AS AL SO BEFORE US IN THE MEMO OF APPEAL FILED WITH THE TRIBUNAL . THE ASSESSEES CONTENTIONS LACK MERITS AND ARE DISMISSED KEEPING IN VIEW THE MANDATE OF SECTIO N 50C OF THE ACT. THIS DISPOSES OF GROUND NO 1 AND 2 RAISED IN MEMO OF APP EAL FILED WITH THE TRIBUNAL. WE ORDER ACCORDINGLY. 5. THE ASSESSEE HAS MADE INVESTMENTS IN REC BONDS O F RS. 17,50,000/- ON 30 TH APRIL, 2009, WHEREIN THE PROPERTY WAS SOLD ON 13-1 0-2008. THE AO OBSERVED THAT AS PER THE PROVISIONS OF SECTION 54EC OF THE ACT, THE ASSESSEE WAS REQUIRED TO INVEST THE CAPITAL GAINS EARNED ON SALE OF PROPERTY WITHIN SIX ITA 1964/MUM/2014 5 MONTHS OF THE SALE OF PROPERTY ON 13-10-2008 AND IN ASSESSEES CASE THE PERIOD ENVISAGED IN THE PROVISIONS OF SECTION 54EC OF THE ACT FOR MAKING INVESTMENT IN BONDS AS STIPULATED U/S 54EC OF THE A CT HAS EXPIRED ON 12 TH APRIL, 2009. THE AO OBSERVED THAT THE ASSESSEE HAS MADE INVESTMENT ON 24 TH APRIL, 2009 AND THE BONDS WERE ISSUED ON 30-04-2009 , WHICH IS BEYOND THE PRESCRIBED LIMIT I.E. WITHIN SIX MONTHS FROM THE TR ANSFER OF THE PROPERTY WHICH IN THE OPINION OF AUTHORITIES BELOW HAD EXPIRED ON 12 TH APRIL, 2009 WHILE THE ASSESSEE MADE INVESTMENT BEYOND THE PERIOD STIPULA TED U/S 54EC OF THE ACT AND HENCE NOT ELIGIBLE FOR DEDUCTION U/S 54EC OF TH E ACT. THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAD MADE INVESTMENT OF RS. 9 LACS IN REC BONDS AND RS. 8.50 LACS IN NHAI BONDS ON 31 ST MARCH, 2009 THROUGH BROKER INDIA INFOLINE LIMITED , BUT THE SAID INVESTMENT COULD NO T GO THROUGH AS THE BOOKS OF THE SAID COMPANIES WERE CLOSED ON 28 TH MARCH, 2009 . HENCE, APPLICATION WAS SUBMITTED IN HDFC BANK ON 24 TH APRIL, 2009 AND THE REC BONDS WERE ISSUED ON 30 TH APRIL, 2009. THE CONTENTIONS OF THE ASSESSEE WAS REJECTED BY THE A.O. AND THE AO HELD THAT SINCE THE INVESTMENT IN THE SPECIFIED SECURITIES AS STIPULATED U/S 54EC OF THE ACT WERE NOT PAID ON OR BEFORE 12 TH APRIL, 2009, THE ASSESSEE IS NOT ENTITLED TO CLAIM DEDUCTION U/S . 54EC OF THE ACT WHICH WAS DISALLOWED BY THE AO VIDE ASSESSMENT ORDER DATE D 26.12.2011 PASSED U/S 143(3) OF THE ACT . 6. AGGRIEVED BY THE ASSESSMENT ORDER DATED 26.12.20 11 PASSED BY THE A.O. U/S 143(3) OF THE ACT, THE ASSESSEE FILED FIRST AP PEAL BEFORE THE LD. CIT(A). 7. BEFORE THE LD. CIT(A) , THE ASSESSEE MADE ELABOR ATE SUBMISSIONS THAT AS PER SECTION 54EC OF THE ACT THE INVESTMENT SHOULD B E MADE IN A SPECIFIED LONG TERM ASSETS AT ANY TIME WITHIN A PERIOD OF SIX MONT HS AFTER THE DATE OF SUCH TRANSFER AND THE ASSESSEE HAS COMPLIED WITH THIS CO NDITION AS THE WORD MONTH HAS TO BE RECKONED ACCORDING TO BRITISH CAL ENDAR IN TERMS OF SECTION 3(35) OF THE GENERAL CLAUSES ACT, 1897 AND HENCE SI X MONTHS PERIOD SHOULD ITA 1964/MUM/2014 6 BE RECKONED FROM END OF MONTH IN WHICH TRANSFER TOO K PLACE. THE ASSESSEE RELIED ON THE DECISION OF ITAT MUMBAI BENCH IN THE CASE OF YAHYA E DHARIWALA V. DCIT, 17 TAXMANN.COM 159(MUM), CIT V. BRIJLAL LOHIA & MAHABIR PRASAD KHEMKA [1980] 124 ITR 485(CAL.) AND IN THE CASE OF CIT V. KADRI MILLS (COIMBATORE) LTD. [1977] 106 ITR 846 (M AD.) . IT WAS ALSO SUBMITTED THAT THE ASSESSEE MADE INVESTMENT IN REC BONDS/NHAI BONDS THROUGH BROKER INDIA INFOLINE LIMITED ON 31 ST MARCH 2009, BUT THESE COMPANIES CLOSED THEIR BOOKS ON 28-03-2009 AND INVE STMENT COULD NOT BE MADE. THE FUNDS CONTINUED TO LIE IN BANK ACCOUNT WH ICH WERE EARMARKED FOR INVESTMENT IN SPECIFIED LONG TERM ASSETS FOR CLAIMI NG DEDUCTION U/S 54EC OF THE ACT. THE ASSESSEE SUBMITTED THAT THERE WERE NO SPECIFIED LONG TERM ASSET AVAILABLE FROM 29-3-2009 ONWARDS AND ONLY WHEN REC LAUNCHED SPECIFIED LONG TERM ASSET , THE ASSESSEE INVESTED RS.17.50 LA CS IN IT ON 24-04-2009 AGAINST WHICH BONDS WERE ALLOTTED ONLY ON 30-4-2009 . THE ASSESSEE THUS PRAYED THAT DEDUCTION CLAIMED U/S 54EC FOR THE INVE STMENT MADE IN SPECIFIED LONG TERM ASSETS SHOULD BE ALLOWED. HOWEVER, THE L D. CIT(A) WAS NOT IN AGREEMENT WITH THE CONTENTIONS OF THE ASSESSEE AND OBSERVED THAT AS PER SECTION 54EC OF THE ACT, THE LONG TERM CAPITAL GAIN S HAS TO BE INVESTED IN THE SPECIFIED LONG TERM ASSET WITHIN SIX MONTHS FROM TH E DATE OF THE TRANSFER OF THE ORIGINAL ASSET. THE LD. CIT (A) HELD THAT THE LAST DATE FOR MAKING THE INVESTMENTS WAS ON OR BEFORE 12 TH APRIL, 2009 WHEREAS THE ASSESSEE HAS MADE INVESTMENT ON 24 TH APRIL, 2009 WHICH IS MUCH BEYOND THE PERIOD OF SIX MONTHS, HENCE, ASSESSEE IS NOT ELIGIBLE FOR EXEMPTI ON OF THE CAPITAL GAINS U/S 54EC OF THE ACT AND ACCORDINGLY THE LEARNED CIT(A) UPHELD THE ASSESSMENT ORDER OF THE A.O. , VIDE APPELLATE ORDERS DATED 27- 12-2013 PASSED BY LEARNED CIT(A). 8. AGGRIEVED BY THE APPELLATE ORDER DATED 27-12-201 3 PASSED BY THE LD. CIT(A), THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. ITA 1964/MUM/2014 7 9. AT THE TIME OF HEARING BEFORE THE TRIBUNAL, NONE APPEARED ON BEHALF OF THE ASSESSEE, HENCE, WE PROCEED TO DISPOSE OF THE A PPEAL AFTER HEARING THE LD. D.R. 10. THE LD. D.R. SUBMITTED THAT THE ASSESSEE HAS MA DE INVESTMENT IN REC BONDS ONLY ON 24 TH APRIL, 2009 WHICH IS MUCH BEYOND THE EXPIRY OF PER IOD OF SIX MONTHS WHICH EXPIRED ON 12-04-2009 AS PER THE P ROVISIONS OF SECTION 54EC OF THE ACT HENCE THE ASSESSEE IS NOT ENTITLED FOR THE EXEMPTION OF LONG TERM CAPITAL GAINS U/S 54EC OF THE ACT . THE LD. D .R. FURTHER RELIED ON THE ORDER OF THE LD. CIT(A). 11. WE HAVE HEARD LD. D.R. AND ALSO PERUSED THE MAT ERIAL AVAILABLE ON RECORD. WE HAVE OBSERVED THAT THE ASSESSEE ALONG W ITH HIS BROTHER AND COUSINS HAS SOLD THE ANCESTRAL PROPERTY ON 13-10-20 08 AND RECEIVED THE CONSIDERATION OF RS. 1,05,00,000/- AND THE LONG TER M CAPITAL GAINS WERE COMPUTED BY THE AUTHORITIES BELOW AT RS. 17,69,104/ - . THE ASSESSEE INVESTED AMOUNT OF RS.17,50,000/- IN REC BONDS ON 2 4-04-2009 WHEREIN BONDS WERE ALLOTTED ON 30-04-2009. AS PER THE PROVI SIONS OF 54EC OF THE ACT, THE ASSESSEE WAS REQUIRED TO INVEST THE CAPITAL GAI NS IN LONG TERM SPECIFIED ASSETS WITHIN SIX MONTHS FROM THE DATE OF TRANSFER OF ORIGINAL ASSET. SINCE THE ASSESSEE INVESTED IN REC BONDS ON 24-04-2009, IT WA S HELD BY THE AUTHORITIES BELOW THAT THE SAID INVESTMENT IS BEYON D SIX MONTHS FROM THE DATE OF TRANSFER OF ORIGINAL ASSET AND HENCE CONDITIONS OF SECTION 54EC OF THE ACT WERE NOT COMPLIED WITH AND THE ASSESSEE IS NOT ENTI TLED FOR DEDUCTION U/S 54EC OF THE ACT. SECTION 54EC OF THE ACT IS REPROD UCED BELOW: [ CAPITAL GAIN NOT TO BE CHARGED ON INVESTMENT IN CER TAIN BONDS. 54EC. (1) WHERE THE CAPITAL GAIN ARISES FROM THE TRANSFER OF A LONG-TERM CAPITAL ASSET (THE CAPITAL ASSET SO TRANSFERRED BE ING HEREAFTER IN THIS SECTION REFERRED TO AS THE ORIGINAL ASSET) AND THE ASSESSEE HAS, AT ANY TIME WITHIN A PERIOD OF SIX MONTHS AFTER THE DATE O F SUCH TRANSFER, ITA 1964/MUM/2014 8 INVESTED THE WHOLE OR ANY PART OF CAPITAL GAINS IN THE LONG-TERM SPECIFIED ASSET, THE CAPITAL GAIN SHALL BE DEALT WITH IN ACCO RDANCE WITH THE FOLLOWING PROVISIONS OF THIS SECTION, THAT IS TO SA Y, (A) IF THE COST OF THE LONG-TERM SPECIFIED ASSET IS NOT LESS THAN THE CAPITAL GAIN ARISING FROM THE TRANSFER OF THE ORIGI NAL ASSET, THE WHOLE OF SUCH CAPITAL GAIN SHALL NOT BE CHARGED UNDER SECTION 45 ; (B) IF THE COST OF THE LONG-TERM SPECIFIED ASSET IS LESS THAN THE CAPITAL GAIN ARISING FROM THE TRANSFER OF THE ORIGINAL ASSE T, SO MUCH OF THE CAPITAL GAIN AS BEARS TO THE WHOLE OF THE CAPITAL GAIN THE SAME PROPORTION AS THE COST OF ACQUISITION OF THE LONG-TERM SPECIFIED ASSE T BEARS TO THE WHOLE OF THE CAPITAL GAIN, SHALL NOT BE CHARGED UNDER SECTION 45 : [ PROVIDED THAT THE INVESTMENT MADE ON OR AFTER THE 1ST DAY O F APRIL, 2007 IN THE LONG-TERM SPECIFIED ASSET BY AN ASSESSE E DURING ANY FINANCIAL YEAR DOES NOT EXCEED FIFTY LAKH RUPEES.] (2) WHERE THE LONG-TERM SPECIFIED ASSET IS TRANSFER RED OR CONVERTED (OTHERWISE THAN BY TRANSFER) INTO MONEY AT ANY TIME WITHIN A PERIOD OF THREE YEARS FROM THE DATE OF ITS ACQUISITION, THE A MOUNT OF CAPITAL GAINS ARISING FROM THE TRANSFER OF THE ORIGINAL ASSET NOT CHARGED UNDER SECTION 45 ON THE BASIS OF THE COST OF SUCH LONG-TERM SPECIFI ED ASSET AS PROVIDED IN CLAUSE (A) OR, AS THE CASE MAY BE, CLAUSE (B) OF SUB-SECTION (1) SHALL BE DEEMED TO BE THE INCOME CHARGEABLE UNDER THE HEAD CAPITAL GAINS RELATING TO LONG-TERM CAPITAL ASSET OF THE PREVIOUS YEAR IN WHICH THE LONG- TERM SPECIFIED ASSET IS TRANSFERRED OR CONVERTED (O THERWISE THAN BY TRANSFER) INTO MONEY. EXPLANATION.IN A CASE WHERE THE ORIGINAL ASSET IS TRANSFERRED AND THE ASSESSEE INVESTS THE WHOLE OR ANY PART OF THE CAPI TAL GAIN RECEIVED OR ACCRUED AS A RESULT OF TRANSFER OF THE ORIGINAL ASS ET IN ANY LONG-TERM SPECIFIED ASSET AND SUCH ASSESSEE TAKES ANY LOAN OR ADVANCE ON THE SECURITY OF SUCH SPECIFIED ASSET, HE SHALL BE DEEME D TO HAVE CONVERTED (OTHERWISE THAN BY TRANSFER) SUCH SPECIFIED ASSET I NTO MONEY ON THE DATE ON WHICH SUCH LOAN OR ADVANCE IS TAKEN. [(3) WHERE THE COST OF THE LONG-TERM SPECIFIED ASS ET HAS BEEN TAKEN INTO ACCOUNT FOR THE PURPOSES OF CLAUSE (A) OR CLAUSE (B ) OF SUB-SECTION (1), (A) A DEDUCTION FROM THE AMOUNT OF INCOME-TAX WI TH REFERENCE TO SUCH COST SHALL NOT BE ALLOWED UNDER SECTION 88 FOR ANY ASSESSMENT YEAR ENDING BEFORE THE 1ST DAY OF APRIL, 2006; (B) A DEDUCTION FROM THE INCOME WITH REFERENCE T O SUCH COST SHALL NOT BE ALLOWED UNDER SECTION 80C FOR ANY ASSESSMENT YEAR BEGINNING ON OR AFTER THE 1ST DAY OF APRIL, 2006.] ITA 1964/MUM/2014 9 EXPLANATION.FOR THE PURPOSES OF THIS SECTION , (A) COST, IN RELATION TO ANY LONG-TERM SPECIFI ED ASSET, MEANS THE AMOUNT INVESTED IN SUCH SPECIFIED ASSET OUT OF CAPI TAL GAINS RECEIVED OR ACCRUING AS A RESULT OF THE TRANSFER OF THE ORIGINA L ASSET; [(B) LONG-TERM SPECIFIED ASSET FOR MAKING ANY INVESTMENT UNDER THIS SECTION DURING THE PERIOD COMMENCING FROM THE 1ST D AY OF APRIL, 2006 AND ENDING WITH THE 31ST DAY OF MARCH, 2007, MEANS ANY BOND, REDEEMABLE AFTER THREE YEARS AND ISSUED ON OR AFTER THE 1ST DA Y OF APRIL, 2006, BUT ON OR BEFORE THE 31ST DAY OF MARCH, 2007, (I) BY THE NATIONAL HIGHWAYS AUTHORITY OF INDIA C ONSTITUTED UNDER SECTION 3 OF THE NATIONAL HIGHWAYS AUTHORITY OF IND IA ACT, 1988 (68 OF 1988); OR (II) BY THE RURAL ELECTRIFICATION CORPORATION LIM ITED, A COMPANY FORMED AND REGISTERED UNDER THE COMPANIES ACT, 1956 (1 OF 1956), AND NOTIFIED BY THE CENTRAL GOVERNMENT IN THE OF FICIAL GAZETTE FOR THE PURPOSES OF THIS SECTION WITH SUCH CONDITIONS (INCL UDING THE CONDITION FOR PROVIDING A LIMIT ON THE AMOUNT OF INVESTMENT BY AN ASSESSEE IN SUCH BOND) AS IT THINKS FIT:] [ PROVIDED THAT WHERE ANY BOND HAS BEEN NOTIFIED BEFORE THE 1S T DAY OF APRIL, 2007, SUBJECT TO THE CONDITIONS SPECIFIED IN THE NOTIFICATION, BY THE CENTRAL GOVERNMENT IN THE OFFICIAL GAZETTE UNDER TH E PROVISIONS OF CLAUSE (B) AS THEY STOOD IMMEDIATELY BEFORE THEIR AMENDMEN T BY THE FINANCE ACT, 2007, SUCH BOND SHALL BE DEEMED TO BE A BOND N OTIFIED UNDER THIS CLAUSE;] [(BA) LONG-TERM SPECIFIED ASSET FOR MAKING AN Y INVESTMENT UNDER THIS SECTION ON OR AFTER THE 1ST DAY OF APRIL, 2007 MEAN S ANY BOND, REDEEMABLE AFTER THREE YEARS AND ISSUED ON OR AFTER THE 1ST DAY OF APRIL, 2007 BY THE NATIONAL HIGHWAYS AUTHORITY OF INDIA CO NSTITUTED UNDER SECTION 3 OF THE NATIONAL HIGHWAYS AUTHORITY OF IND IA ACT, 1988 (68 OF 1988) OR BY THE RURAL ELECTRIFICATION CORPORATION L IMITED, A COMPANY FORMED AND REGISTERED UNDER THE COMPANIES ACT, 1956 (1 OF 1956).] SECTION 54EC OF THE ACT CLEARLY STIPULATES THAT THE INVESTMENT HAS TO BE MADE IN SPECIFIED LONG TERM ASSETS WITHIN A PERIOD OF SI X MONTHS AFTER THE DATE OF TRANSFER OF THE ORIGINAL ASSET. THE WORD MONTH I S NOT DEFINED UNDER THE ACT. THE WORD MONTH IS DEFINED UNDER SECTION 3(35) OF THE GENERAL CLAUSES ACT, 1897 WHICH IS REPRODUCED AS HEREUNDER: ITA 1964/MUM/2014 10 3. DEFINITIONS.- IN THIS ACT, AND IN ALL CENTRAL ACTS AND REGULATION S MADE AFTER THE COMMENCEMENT OF THIS ACT, UNLESS THERE IS ANYTHING REPUGNANT IN THE SUBJECT OR CONTEXT,- *** *** 35. MONTH SHALL MEAN A MONTH RECKONED ACCORDING T O THE BRITISH CALENDAR. SECTION 54EC OF THE ACT CLEARLY STIPULATES THAT INV ESTMENT SHOULD BE MADE IN A SPECIFIED ASSETS AT ANY TIME WITHIN A PERIOD OF S IX MONTHS AFTER THE DATE OF TRANSFER OF THE ASSET. IN THE INSTANT CASE, THE AS SESSEE COMPLIED WITH THIS CONDITION AS THE WORD MONTH HAS TO BE RECKONED AS PER THE BRITISH CALENDAR. THE REC BONDS WERE SUBSCRIBED BY THE ASS ESSEE ON 24-04-2009 AND WERE ALLOTTED TO THE ASSESSEE BY REC ON 30 TH APRIL, 2009 WHICH IS WITHIN SIX MONTHS AFTER THE DATE OF TRANSFER OF ASSET AS P ER BRITISH CALENDAR MONTH, HENCE, THE ASSESSEE FULFILLED THE CONDITIONS LAID D OWN UNDER SECTION 54EC OF THE ACT AND AS SUCH ASSESSEE IS ELIGIBLE FOR DEDUCT ION U/S 54EC OF THE ACT OF RS.17,50,000/- INVESTED IN LONG TERM SPECIFIED ASSE TS BEING REC BONDS ON 24-04-2009 WHICH IS WITHIN SIX MONTHS FROM THE END OF THE MONTH IN WHICH TRANSFER TOOK PLACE I.E. OCTOBER 2008 , THE ORIGINA L ASSET HAVING BEING SOLD ON 13-10-2008 . OUR ABOVE VIEW IS SUPPORTED BY DECISIO NS OF HONBLE MADRAS HIGH COURT IN THE CASE OF KADRI MILLS (COIMBATORE) LIMITED (SUPRA) WHEREIN THE HONBLE COURT HELD THAT AS DEFINITION UNDER THE GEN ERAL CLAUSES ACT, 1897 WILL APPLY TO THE TERM MONTH OCCURRING IN THE ACT . THE HONBLE CALCUTTA HIGH COURT IN BRIJLAL LOHIA AND MAHABOR PRASAD KHEMKA(SU PRA) HELD THAT AS MONTH IS NOT DEFINED UNDER THE ACT, THE EXPRESSION UNDER THE GENERAL ITA 1964/MUM/2014 11 CLAUSES ACT , 1897 SHALL APPLY. THE SPECIAL BENCH O F THE TRIBUNAL HAS IN ALKABEN B. PATEL V. ITO ( 2014) 43 TAXMANN.COM 333( AHD. TRIB )(SB) HAS HELD THAT IN TERMS OF GENERAL CLAUSES ACT ,1897 PERIOD O F SIX MONTH MENTIONED IN SECTION 54EC OF THE ACT HAS TO BE REGARDED AS SIX B RITISH CALENDAR MONTHS , WHEREIN THE SPECIAL BENCH OF THE TRIBUNAL HELD AS U NDER: 5. WE HAVE HEARD BOTH THE SIDES AT LENGTH. THE LEGAL ISSUE INVOLVED IS WITHIN A NARROW COMPASS, AS ALSO REVOLVES AROUND FE W SUCCINCT FACTS. A SALE WAS EXECUTED AND REGISTERED ON 10TH OF JUNE, 2 008. AS PER THE REVENUE DEPARTMENT, THE ASSESSEE WAS REQUIRED U/S.5 4EC TO INVEST IN NHAI BOND ON OR BEFORE 10TH OF DECEMBER, 2008,I.E. WITHIN SIX MONTHS, HOWEVER, THE SAID INVESTMENT WAS STATED TO BE MADE BY THE ASSESSEE ON 17TH OF DECEMBER, 2008. AT THIS JUNCTURE IT MAY NOT BE OUT OF PLACE TO MENTION THAT THERE WAS A CLAIM OF THE ASSESSEE THAT THE SAID CHEQUE WAS TENDERED ON 8TH OF DECEMBER, 2008, HENCE THE SAID I NVESTMENT WAS OTHERWISE MADE BEFORE THE EXPIRY OF LIMITATION AS P RESCRIBED. BE THAT AS IT WAS, THIS CONTROVERSY OF EXACT DATE OF INVESTMENT, SHALL BE ADDRESSED AFTER ADDRESSING THE MAIN CONTROVERSY THAT WHETHER THE SA ID INVESTMENT OF THE ASSESSEE WHICH WAS ALLEGEDLY MADE ON 17TH OF DECEMB ER, 2008 WAS WITHIN THE PHRASEOLOGY, 'AT ANY TIME WITHIN A PERIO D OF SIX MONTHS AFTER THE DATE OF SUCH TRANSFER' AS PRESCRIBED IN SECTION 54E C. FOR READY REFERENCE, THE RELEVANT PORTION OF THE SECTION IS REPRODUCED B ELOW: '54EC. CAPITAL GAIN NOT TO BE CHARGED ON INVESTMENT IN CERTAIN BONDS. (1) WHERE THE CAPITAL GAIN ARISES FROM THE TRANSFER OF A LONG-TERM CAPITAL ASSET (THE CAPITAL ASSET SO TRANSFERRED BEING HEREA FTER IN THIS SECTION REFERRED TO AS THE ORIGINAL ASSET) AND THE ASSESSEE HAS, AT ANY TIME WITHIN A PERIOD OF SIX MONTHS AFTER THE DATE OF SUC H TRANSFER, INVESTED THE WHOLE OR ANY PART OF CAPITAL GAINS IN THE LONG- TERM SPECIFIED ASSET, THE CAPITAL GAIN SHALL BE DEALT WITH IN ACCORDANCE WITH THE FOLLOWING PROVISIONS OF THIS SECTION.' 5.1 AFTER HEARING THE SUBMISSIONS OF BOTH THE SIDE WE ARE OF THE VIEW THAT TO RESOLVE THE CONTROVERSY EXACTLY, IT IS REQUIRED TO KNOW THAT FOR THE PURPOSE OF SEC 54 EC OF THE IT ACT 1961, THE PERIOD OF INVE STMENT SHOULD BE CALCULATED AS SIX MONTHS AFTER THE DATE OF TRANSFER OR TO BE RECKONED 180 DAYS FROM THE DATE OF TRANSFER. THIS IS THE CRUX OF THE ISSUE. 5.2 WE SHALL FIRST DEAL WITH THE ARGUMENTS OF LEARNED D R BECAUSE THIS CONTROVERSY WAS REFERRED TO US AT THE BEHEST OF THE REVENUE DEPARTMENT. THE ARGUMENT OF LEARNED DR IS THAT THE TERM 'MONTH' IS TO RECKON FROM THE DATE WHEN AN EVENT TAKES PLACE UPTO THE DATE OF THE FOLLOWING MONTH. IN OTHER WORDS LEARNED DR HAS PLEADED THAT IN ORDINARY SENSE A 'MONTH' IS A ITA 1964/MUM/2014 12 PERIOD FORM A SPECIFIED DATE IN A MONTH, TO THE DAT E NUMERICALLY CORRESPONDING TO THAT DATE IN THE FOLLOWING MONTH, LESS ONE. THE ARGUMENT IS THAT SINCE THE STATUTE HAS PRESCRIBED THE LIMITATIO N OF SIX MONTHS, THEREFORE, THOSE WORDS I.E. 'AT ANY TIME WITHIN A PERIOD OF SI X MONTHS' MUST NOT BE REPLACED BY THE WORDS 'AT ANY TIME WITHIN A PERIOD OF END OF SIX MONTHS'. 5.3 WE HAVE DULY ANALYZED THIS ARGUMENT. THE TERM 'MON TH' IS NOT DEFINED IN THE INCOME TAX ACT, THEREFORE SEEKING THE HELP O F AN ANOTHER STATUTE ; HENCE, EXAMINED THE TERM 'MONTH' AS PER GENERAL CLA USES ACT, 1897 WHICH SAYS 'SECTION 3 DEFINES - (35) 'MONTH' SHALL MEAN A MONT H RECKONED ACCORDING TO THE BRITISH CALENDAR.' IT MAY NOT BE OUT OF PLACE TO MENTION THAT IN SECTI ON 54E, 54EA AND 54EB, THE PHRASE IS IDENTICAL, I.E., 'WITHIN A PERIOD OF SIX MONTHS AFTER THE DATE OF SUCH TRANSFER'. WE HAVE BEEN INFORMED THAT THIS PHR ASE OTHERWISE IS NOT USED BY THE LEGISLATOR IN ANY OTHER PROVISIONS OF I T ACT, 1961 OR IT RULE, 1982. WHICH MEANS A SPECIFIC PERIOD IS PRESCRIBED F OR THE PURPOSE OF INVESTMENT IN CERTAIN SPECIFIED ASSETS IN RESPECT O F COMPUTATION OF CAPITAL GAIN. MEANING THEREBY, AN INCENTIVE IS PRESCRIBED B Y THE STATUTE TO A TAX PAYER, WHO HAS EARNED LONG TERM CAPITAL GAIN, TO GE T RELIEF IF INVEST THE GAIN IN ANY OF THE SPECIFIED ASSET. BUT THE INVESTM ENT HAS TO BE MADE AT ANY TIME WITHIN A PERIOD OF SIX MONTHS AFTER THE DA TE OF SUCH TRANSFER. 5.4 BEING A BENEFICIAL PROVISION THROUGH WHICH AN INCE NTIVE IS GIVEN, AN ARGUMENT HAS BEEN RAISED, THAT SUCH PROVISION SHOUL D BE INTERPRETED LIBERALLY. FOR THIS LEGAL PROPOSITION OF LIBERAL IN TERPRETATION DECISIONS CITED ARE NAMELY, BAJAJ TEMPO LTD. V. CIT [1962] 196 ITR 188/62 TAXMAN 480 (SC) , CIT V. GWALIOR RAYON SILK MFG. CO. LTD. [1962] 196 ITR 149/62 TAXMAN 471 (SC) AND CIT V. VEGETABLE PRODUCTS LTD. [1973] 88 ITR 192 (SC) . EVEN IT HAS ALSO BEEN ARGUED THAT THE HIGHEST REV ENUE AUTHORITY, I.E., CBDT HAS ALSO TAKEN DUE COGNIZANCE OF SUCH INCENTIV E PROVISIONS, THEREFORE, GRANTED RELAXATION. SUCH AS IN CBDT CIRC ULAR NO.794 DATED 9TH OF AUGUST, 2000; CBDT CIRCULAR NO.359 DATED 10TH OF MA Y, 1983 AND CIRCULAR NO.791 DATED 2ND OF JUNE, 2000. CERTAIN TRIBUNALS H AVE ALSO ACCEPTED THE LEGAL ASPECT OF 'LIBERAL INTERPRETATION' OF STATUTE IN RESPECT OF PROVISIONS OF SECTION 54E OR SECTIONS 54EA SUCH AS IN THE CASE OF MAHESH NEMCHANDRA GANESHWADE V. ITO [2012] 51 SOT 155/21 TAXMANN.COM 136 (PUNE) , BHIKULAL CHANDAK (HUF) V. ITO [2009] 126 TTJ 545 (NAG.) , CHANCHAL KUMAR SIRCAR V. ITO, [2012] 50 SOT 289/18 TAXMANN.COM 304 (KOL.) . WE ARE IN AGREEMENT WITH THIS LEGAL PROPOSITION BEING LAID DO WN BY THE HON'BLE COURTS BUT TO RESOLVE THIS CONTROVERSY WE FEEL THAT A LITT LE MORE DELIBERATION IS REQUIRED INSTEAD OF DECIDING ONLY ON THE BASIS OF T HIS THUMB-RULE. ITA 1964/MUM/2014 13 5.5 WHILE DEALING WITH THIS TYPE OF INCENTIVE PROVISIO NS WE MAY LIKE TO MENTION THAT IT IS NEITHER A QUESTION OF 'LIBERAL I NTERPRETATION OF STATUTE' OR A 'LITERAL INTERPRETATION OF STATUTE', BUT IT IS A MA TTER OF 'PURPOSIVE CONSTRUCTION OF STATUTE' OR 'CONSTRUCTIVE INTERPRETATION OF STAT UTE'. A TRUE INTENTION OF THE ENACTMENT IS REQUIRED TO BE CONSIDERED BY A COURT O F LAW. IN THE PRESENT CASE, THE INTENTION IS TO ATTRACT INVESTMENT TO BE USED FOR THE DEVELOPMENT OF INFRASTRUCTURE ETC. THE QUESTION AS TO WHETHER A ST ATUTE IS MANDATORY OR DIRECTORY, DEPENDS UPON THE INTENT OF THE LEGISLATO R AND NOT UPON THE LANGUAGE IN WHICH IT IS CLOTHED. THE MEANING AND IN TENTION OF THE LEGISLATOR IS TO JUDGED BY THE LANGUAGE, BUT THESE ARE TO BE C ONSIDERED NOT ONLY FROM PHRASEOLOGY OF THE PROVISION, BUT ALSO BY CONSIDERI NG ITS NATURE, ITS DESIGN, AND THE CONSEQUENCES WHICH WOULD FOLLOW FROM CONSTR UING IT THE ONE WAY OR THE OTHER. THEREFORE, WE HAVE EXAMINED THE GENERAL CLAUSES ACT , 1897 WHERE THE 'MONTH' SHALL MEAN 'A MONTH RECKONED ACCORDING TO B RITISH CALENDAR'. THIS CONTROVERSY HAS EARLIER BEEN ADDRESSED BY CERTAIN H IGHER FORUM AND THEN IT WAS DECIDED THAT THE QUESTION WHETHER 'MONTH' MEANS A 'LUNAR MONTH' OR A 'CALENDAR MONTH' WOULD DEPEND ON INTENTION FOR THE USAGE OF THE TERM ' MONTH'. IN BRITISH CALENDAR A MONTH IS A UNIT OF PE RIOD USED IN A CALENDAR. IT MAY NOT BE OUT OF CONTEXT TO MENTION THAT THIS S YSTEM WAS INVENTED BY MESOPOTAMIA. AN AVERAGE LENGTH OF A MONTH IS 29.53 DAYS; BUT IN A CALENDAR YEAR THERE ARE 7 MONTHS WITH 31 DAYS, 4 MO NTHS HAVING 30 DAYS AND ONE MONTH HAS 28/29 DAYS. IT CAN BE POSSIBLE TH AT UNDER COMMON PARLANCE PROBABLY IT MEANT A LUNAR MONTH BUT IN CAL CULATING THE SPECIFIED NUMBER OF MONTHS THAT HAD ELAPSED AFTER OCCURRENCE OF A SPECIFIED EVENT THEN A GENERAL RULE IS THAT THE PERIOD OF A MONTH E NDS ON THE LAST DAY. THEREFORE, A MONTH ENDS BY THE LAST DATE OF THAT MO NTH. ONE OF THE ITAT BENCH, MUMBAI IN THE CASE OF YAHYA E. DHARIWALA V. DY. CIT [2012] 49 SOT 458/17 TAXMANN.COM 159 (MUM) HAS ALSO OPINED THAT QUOTE 'SIX MONTHS PERIOD SHOULD BE RECKONED FROM THE END OF THE MONTH IN WHICH THE TRANSFER TAKES PLACE 'UNQUOTE. THEREAFTER IN THE CASE OF AQU ATECH ENGINEERS, 36 CCH 167 (MUM.), AGAIN IT WAS DECIDED TO GRANT THE EXEMP TION OF INVESTMENT U/S.54EC IF THE SAME HAS BEEN MADE BY THE END OF TH E MONTH. 5.6 IN CERTAIN OTHER CONTEXT FEW HON'BLE HIGH COURTS HA VE ALSO TAKEN A VIEW THAT A MONTH IS TO BE RECKONED ACCORDING 'BRITISH C ALENDAR'. WE HAVE NOTED THAT IN THE CASE OF CIT V. SLM MANEKLAL INDUSTRIES LTD. [2005] 274 ITR 485/[2007] 158 TAXMAN 30 (GUJ.) , THE HON'BLE JURISDICTIONAL HIGH COURT HAS OPINED THAT THE ISSUE OF INTERPRETATION OF THE TERM 'MONTH' IS NO LONGER RES INTEGRA BECAUSE IN THE CASE OF CIT V. KADRI MIL LS (COIMBATORE LTD.), 106 ITR 846 (MAD.) IT WAS LAID DOWN THAT THE MONTH TO BE RECKONED ACC ORDING TO BRITISH CALENDAR. THE ISSUE BEFORE THE HON'BLE COUR T WAS THAT WHETHER THE TRIBUNAL WAS RIGHT IN LAW AND ON FACTS IN CANCELING THE PENALTY LEVIED U/S. 271(1)(A), OBSERVING THAT MONTH MEANT CALENDAR MONT H AND NOT THE LUNAR ITA 1964/MUM/2014 14 MONTH OF 28 OR 30 DAYS. THIS ISSUE WAS DEALT AT SOM E LENGTH BY HON'BLE MADRAS HIGH COURT IN THE CASE OF KADRI MILL (CAIMBA TORE) LTD. (SUPRA). IN THIS CASE, THE OBSERVATION OF THE HON'BLE COURT WAS THAT IT ACT, 1961 ITSELF DOES NOT DEFINE THE WORD 'MONTH' HOWEVER SECTION 3 OF GENERAL CLAUSES ACT, 1987 DEFINE THE WORD 'MONTH' MEANS A MONTH REC KONED ACCORDING TO BRITISH CALENDAR. IN THIS CONTEXT A DECISION OF HON 'BLE CALCUTTA HIGH PRONOUNCED IN THE CASE OF CIT V. BRIJLAL LOHIA & MA HABIR PRASAD KHEMKA [1980] 124 ITR 485/[1981] 5 TAXMAN 93 HAS ALSO BEEN GENERALLY CITED WHEREIN IT WAS HELD THAT THE WORDS 'HOWEVER CONSIDE RING MONTH DURING WHICH THE DEFAULT CONTINUED' AS APPEARED IN SECTION 271(1)(A) REFER ONLY TO A MONTH DURING THE WHOLE OF WHICH THE DEFAULT CONTI NUED AND NOT TO A MONTH DURING WHICH ONLY PART OF WHICH DEFAULT CONTI NUED. LIKEWISE IN THE CASE OF HARNAND RAI RAMANAND V. CIT [1986] 159 ITR 988/24 TAXMAN 571 (RAJ.) , AND B.V.ASWATHAIAH & BROS. V. ITO [1985] 155 ITR 422/[1986] 27 TAXMAN 560 (KAR.) IT WAS HELD THAT A MONTH IS A BRITISH CALENDAR MON TH . 6. THE SUBTLE QUESTION IS THAT WHETHER THE WORD 'MONT H' REFERS IN THIS SECTION A PERIOD OF 30 DAYS OR IT REFERS TO THE MON THS ONLY. SECTION 54EC, IF WE READ AGAIN PRESCRIBES THAT AN INVESTMENT IS REQU IRED TO BE MADE WITHIN A PERIOD OF SIX MONTHS. WHETHER THE INTENTION OF TH E LEGISLATOR WAS TO COMPUTE SIX CALENDAR MONTHS OR TO COMPUTE 180 DAYS. TO RESOLVE THIS CONTROVERSY, WE ARE GUIDED BY A DECISION OF HON'BLE ALLAHABAD HIGH COURT PRONOUNCED IN THE CASE OF CIT V. MUNNALAL SHRIKISHA N [1987] 167 ITR 415 WHERE ANSWERING THE DISPUTE IN RESPECT OF LAW OF LI MITATION THE HON'BLE COURT HAS CLEARLY HELD THAT THERE IS NOTHING IN THE CONTEXT OF SECTION 256(2) TO WARRANT THE CONCLUSION THAT THE WORD 'MONTH' IN IT REFERS TO A PERIOD OF 30 DAYS, THEREFORE, REFERS TO SIX MONTHS IN SECTION 25 6(2) IS TO SIX CALENDAR MONTHS AND NOT 180 DAYS. RATHER, IN THIS CITED DECI SION AN INTERESTING OBSERVATION OF THE COURT WAS THAT WHILE COMPARING T HE PRECEDENTS THE CONTEXTUAL SETTING IS TO BE EXAMINED AND IF ENTIREL Y DISTINCT AND DIFFERENT THEN DO NOT WARRANT TO APPLY UNIVERSALLY. EVEN IN T HE CASE OF TAMAL LAHIRI V. KUMAR P. N. TAGORE AIR 1978 (SC) 1811, IT WAS OP INED WHILE INTERPRETING SECTION 533 OF BANGALORE MUNICIPAL ACT, 1932 THAT T HE EXPRESSION SIX MONTHS IN THE SAID SECTION MEANS SIX CALENDAR MONTH S AND NOT 180 DAYS. A COPY OF THE JUDGMENT IS PLACED BEFORE US. THE PURPO SE OF MENTIONING THIS PLANK OF ARGUMENT IS THAT AFTER SCRUTINIZING FEW MO RE SECTIONS OF THE ACT IT IS EVIDENT THAT ON SOME OCCASION THE LEGISLATURE HA D NOT USED THE TERMS ' MONTH' BUT USED THE NUMBER OF DAYS TO PRESCRIBE A S PECIFIC PERIOD. FOR EXAMPLE IN SECTION 254(2A) FIRST PROVISO IT IS PRES CRIBED THAT THE TRIBUNAL MAY PASS AN ORDER GRANTING STAY BUT FOR A PERIOD NO T EXCEEDING ONE HUNDRED AND EIGHTY DAYS. THIS IS AN IMPORTANT DISTI NCTION MADE IN THIS STATUTE WHILE SUBSCRIBING THE LIMITATION/ PERIOD. T HIS DISTINCTION THUS RESOLVES THE PRESENT CONTROVERSY BY ITSELF. ITA 1964/MUM/2014 15 7. SO THE LOGICAL CONCLUSION IS THAT IN THE ABSENCE O F ANY DEFINITION OF THE WORD ' MONTH' IN THE ACT, THE DEFINITION OF GENERAL CLAUSES ACT 1897 SHALL BE APPLICABLE AND BY DOING SO THERE IS NO ATTEMPT O N OUR PART TO INTERPRET THE LANGUAGE OF SEC. 54EC , WHAT TO SAY A LIBERAL O R LITERAL INTERPRETATION. WE HEREBY HOLD THAT THE LEGISLATURE HAS IN ITS WISD OM HAS CHOSEN TO USE THE WORD ' MONTH'. THIS WAS DONE BY KEEPING IN MIND THE DEFINITION AS PRESCRIBED IN GENERAL CLAUSES ACT 1857. THEREFORE W E HAVE ALSO READ THE WORD 'MONTH' WITHIN THE RECOGNIZED WAYS OF INTERPRE TATION. RATHER WE HAVE ALSO SEEN BOTH; THE CONVENTIONAL AS WELL AS LEXICON MEANING. HERE THERE IN NO ATTEMPT TO SUPPLY CASUS-OMISSUS BUT REPLICATED A S PER THE LANGUAGE USED. 7.1 IN THE PRESENT CASE THERE IS NO DISPUTE ABOUT THE I NVESTMENT WHICH HAD ACTUALLY BEEN MADE BY THE ASSESSEE. THE SAID INVEST MENT HAD BEEN MADE IN THE MONTH OF DECEMBER, 2008. HOWEVER, ALLEGED TO BE FEW DAYS LATE FROM THE DATE OF TRANSFER IN THE MONTH OF JUNE, 2008. IT IS NOT THE CASE OF THE REVENUE THAT THE APPELLANT HAD ALTOGETHER FUDGED TH E DATES. ONCE THE PURPOSE OF THE INTRODUCTION OF THE SECTION WAS SERV ED BY MAKING THE INVESTMENT IN THE SPECIFIED ASSETS THEN THAT PURPOS E HAS TO BE KEPT IN MIND WHILE GRANTING INCENTIVE. 7.2 WE HEREBY HOLD THAT THE INVESTMENT IN QUESTION QUA LIFIES FOR THE DEDUCTION U/S 54EC. RESULTANTLY ASSESSEE'S GROUNDS ARE HEREBY ALLOWED. THE QUESTION REFERRED IS ANSWERED IN FAVOUR OF THE ASSESSEE. THUS BASED ON OUR ABOVE REASONING AND DETAILED DISC USSIONS, THE ASSESSEE SUCCEEDS ON THESE GROUNDS AND WE HOLD THAT THE WORD MONTH AS STIPULATED IN SECTION 54EC OF THE ACT CLEARLY POSTULATE THAT THE INVESTMENT IN LONG TERM SPECIFIED ASSETS IS TO BE MADE WITHIN SIX MONTHS FR OM THE DATE OF TRANSFER OF ORIGINAL ASSET , AS THE WORD MONTH HAS NOT BEEN DEFINED UNDER THE ACT , THE REFERENCE TO SECTION 3(35) OF GENERAL CLAUSES ACT,1 897 HAS TO BE ADOPTED WHICH PROVIDES MONTH SHALL MEAN A MONTH RECKONED ACCORDING TO THE BRITISH CALENDAR. THE REC BONDS WERE SUBSCRIBED BY THE ASSESSEE ON 24-04- 2009 AND WERE ALLOTTED TO THE ASSESSEE BY REC ON 30 TH APRIL, 2009 WHICH IS WITHIN SIX MONTHS AFTER THE DATE OF TRANSFER OF ASS ET AS PER BRITISH CALENDAR MONTH, HENCE, THE ASSESSEE FULFILLED THE CONDITIONS LAID DOWN UNDER SECTION 54EC OF THE ACT AND AS SUCH ASSESSEE IS ELIGIBLE FO R DEDUCTION U/S 54EC OF ITA 1964/MUM/2014 16 THE ACT OF RS.17,50,000/- INVESTED IN LONG TERM SPE CIFIED ASSETS BEING REC BONDS ON 24-04-2009 WHICH IS WITHIN SIX MONTHS FROM THE END OF THE MONTH IN WHICH TRANSFER TOOK PLACE I.E. OCTOBER 2008 , TH E ORIGINAL ASSET HAVING BEING SOLD ON 13-10-2008 . THE ASSESSES APPEAL ON T HIS GROUND IS ALLOWED. THIS DISPOSES OF GROUND NO 3 & 4 RAISED BY THE ASSE SSEE IN MEMO OF APPEAL FILED WITH THE TRIBUNAL. WE ORDER ACCORDINGLY. 12. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED AS INDICATED ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 19 TH DECEMBER, 2016. # $% &' 19-12-2016 ( ) SD/- SD/- (JOGINDER SINGH) (RAMIT KOCHAR) JUDICIAL MEMBER ACCOUNTANT MEMBER $ MUMBAI ; & DATED 19-12-2016 [ .9../ R.K. R.K. R.K. R.K. , EX. SR. PS !'#$%&%# / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. : ( ) / THE CIT(A)- CONCERNED, MUMBAI 4. : / CIT- CONCERNED, MUMBAI 5. =>( 99?@ , ?@ , $ / DR, ITAT, MUMBAI B BENCH 6. (BC D / GUARD FILE. / BY ORDER, = 9 //TRUE COPY// / ( DY./ASSTT. REGISTRAR) , $ / ITAT, MUMBAI