Sridhar Rajan, CHENNAI V. ITO, CHENNAI

ITA 2072/CHNY/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 8175 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-01-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 12-01-2016
• Assessment Year: 2012-2013
• Appeal Filed On: 23-10-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A B KOLI IRS
• Assessee Lawyers: V C VIJAYARAGHAVAN
• Section: 142(1); 54

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI , . ! , '!# BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI G. PAVAN KUMAR, JUDICIAL MEMBER ./ I.T.A. NO. 2072/MDS/2015 ' $ %$ / ASSESSMENT YEAR : 2012-2013 SHRI. SRIDHAR RAJAN AE-116, NEW NO.AE-278, GOLDEN EDELWEISS, SHANTHI COLONY, ANNA NAGAR, CHENNAI 600 040. VS. THE INCOME TAX OFFICER, INTERNATIONAL TAXATION-II(1) CHENNAI. [PAN DVLPS 6838B] ( /RESPONDENT) ( /RESPONDENT) &' ( ) / APPELLANT BY : SHRI. V.C. VIJAYARAGHAVAN, ADVOCATE *+&' ( ) /RESPONDENT BY : SHRI. A.B. KOLI, IRS, JCIT. ( , / DATE OF HEARING : 12-01-2016 -.% ( , / DATE OF PRONOUNCEMENT : 22-01-2016 / O R D E R PER G. PAVAN KUMAR, JUDICIAL MEMBER : THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)- 16, CHENNAI IN ITA NO.50/CIT(A)16/14-15, DT.14.09.2015 FOR THE ASS ESSMENT YEAR 2012-2013 PASSED U/S.143(3) AND 250 OF THE INCOME T AX ACT, 1961. ITA NO.2072/MDS/2015 :- 2 -: 2. THE ONLY ISSUE RAISED BY THE ASSESSEE BEFORE THE TR IBUNAL IN RESPECT OF INVESTMENT OF LONG TERM CAPITAL GAINS U /S.54EC OF THE ACT IN CAPITAL GAIN BONDS FALLING IN TWO FINANCIAL YEA RS AND WITHIN SIX MONTHS FROM THE DATE OF TRANSFER OF PROPERTY. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND IS NON RESIDENT. FOR THE ASSESSMEN T YEAR 2012-2013 THE ASSESSEE FILED RETURN OF INCOME ON 26.07.2012 A DMITTING TOTAL INCOME OF >53,622/-. SUBSEQUENTLY, THE CASE WAS SE LECTED FOR SCRUTINY AND NOTICES U/S.143(2) AND 142(1) OF THE ACT ALONG WITH QUESTIONNAIRE WERE ISSUED TO THE ASSESSEE. IN COMPLIANCE TO THE NOTICES, THE LD. AUTHORISED REPRESENTATIVE OF THE ASSESSEE APPEARED FROM TIME TO TIME AND SUBMITTED DETAILS. THE ASSESSING OFFICER AFTER HEARING THE SUBMISSIONS AND BASED ON INFORMATION ON RECORD FOU ND THAT ASSESSEE HAS SOLD HOUSE SITE AT TAMBARAM, VIDE REGD. SALE D EED DATED 16.02.2012 FOR A CONSIDERATION OF >1 CRORE AND THE ASSESSEE HAS MADE INVESTMENT U/SEC.54 EC OF THE ACT IN CAPITAL GAINS BONDS OF RURAL ELECTRIFICATION CORPORATION AND NHAI TOTAL AGGREGA TING TO >91,00,000/. ON PERUSAL OF THE INVESTMENTS, THE LD.AR ISSUED SH OW CAUSE NOTICE AND IN COMPLIANCE SUBMITTED DETAILS OF INVESTMENT MADE IN TWO FINANCIAL YEAR. THE ASSESSING OFFICER FOUND THAT TH E ASSESSEE HAS INVESTED LONG TERM CAPITAL GAIN TO CLAIM EXEMPTION U/S.54EC AND CONCLUDED THAT INVESTMENT IN CAPITAL GAIN BONDS BY AN ASSESSEE ITA NO.2072/MDS/2015 :- 3 -: DURING ANY FINANCIAL YEAR SHOULD NOT EXCEED FIFTY L AKHS. IN VIEW OF INVESTMENT MADE IN TWO FINANCIAL YEARS, THE LD. AS SESSING OFFICER HAS RESTRICTED >50,00,000/- TO ONE FINANCIAL YEAR AND MADE AN ADDITIONS OF >41,00,000/- AND RAISED DEMAND. AGGRIEVED BY T HE ORDER OF THE ASSESSING OFFICER, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). 4. IN THE APPELLATE PROCEEDINGS, THE ASSESSEE HAS REIT ERATED HIS SUBMISSIONS MADE BEFORE THE ASSESSING OFFICER THAT THE INVESTMENTS IN CAPITAL GAIN BONDS WITHIN THE PERIOD OF SIX MONTHS FROM DATE OF TRANSFER ELIGIBLE FOR EXEMPTION U/SEC. 54 OF THE AC T AND RELIED ON HIGH COURT DECISION AND VARIOUS TRIBUNAL ORDERS. THE CO MMISSIONER OF INCOME TAX (APPEALS) PASSED ORDER DIFFERING FROM T HE RATIO OF ITAT AND HIGH COURT AND CONCLUDED THAT ASSESSEE GETS ONL Y BENEFIT OF >50,00,00/- IN ONE ASSESSMENT YEAR AND THE BALANCE THE ASSESSING OFFICER HAS RIGHTLY DISALLOWED AND UPHELD THE ORDER OF THE ASSESSING OFFICER. AGGRIEVED BY THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), THE ASSESSEE ASSAILED AN APPEAL BEFORE T HE TRIBUNAL. 5. BEFORE US, THE LD.AR SUBMITTED THAT THE AMENDMENT TO SEC.54EC IS A PROSPECTIVE IN NATURE EFFECTIVE FROM 01.04.2015. AS FAR AS THE ASSESSEE IS CONCERNED THE LAW PREVAILING ON THE DATE OF ITA NO.2072/MDS/2015 :- 4 -: TRANSACTION SHALL APPLY, THE LD. AUTHORISED REPRESE NTATIVE RELIED ON THE PROVISIONS OF SEC.54EC AS UNDER:- PROVIDED THAT THE INVESTMENT MADE ON OR AFTER 1 ST APRIL OF 2007 IN THE LONG TERM SPECIFIED ASSET BY A N ASSESSEE DURING ANY FINANCIAL YEAR DOES NOT EXC EED 50 LAKHS RUPEES . AND SUPPORTED WITH JUDICIAL DECISIONS OF THE MADR AS HIGH COURT IN THE CASE OF CIT VS. C. JAICHANDER 370 ITR 579 (MAD) AND CIT VS. CORAMANDEL INDUSTRIES LTD 370 ITR 586 (MAD) ALSO RELIED ON VARIOUS ORDERS OF THE TRIBUNAL AND PLEADED FOR DELETION OF ADDITION. 6. CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE RELIED ON THE ORDERS OF THE LOWER AUTHORITIES AND CONTESTED THE G ROUND. 7. WE HEARD THE RIVAL SUBMISSIONS OF BOTH THE PARTIES , PERUSED THE MATERIAL ON RECORD AND ALSO JUDICIAL CITATIONS QUOTED. THE ASSESSEE HAS INVESTED IN LONG TERM CAPITAL GAINS WITHIN SIX MONTHS FROM THE DATE OF TRANSFER U/S.54EC OF THE ACT IN RURAL ELECTRIFIC ATION CORPORATION AND NATIONAL HIGHWAY AUTHORITY OF INDIA CAPITAL GAIN BO NDS AND COMPLIED WITH THE PROVISIONS AND THERE IS NO DISPUTE ABOUT T HE INVESTMENT. THE ASSESSING OFFICER TRIED TO MAKE A DISTINCTION OF PR OVISIONS FOR RESTRICTING INVESTMENT OF >50,00,000/- ONLY IN ONE FINANCIAL YE AR. THE ASSESSEE HAS INVESTED IN TWO INSTALLMENTS FALLING IN TWO FIN ANCIAL YEARS AND AVAILED TAX EXEMPTION. WE AFTER CONSIDERING THE A PPARENT FACTS AND ALSO RESPECTFULLY RELY ON THE JURISDICTIONAL HIGH C OURT IN THE CASES OF C. ITA NO.2072/MDS/2015 :- 5 -: JAICHANDER 370 ITR 579 (SUPRA) AND CIT VS. CORAMANDEL INDUSTRIES LTD 370 ITR 586 (SUPRA) SETASIDE THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) AND DIRECT THE ASSESSING OFFIC ER TO DELETE THE ADDITION AND ALLOW THE GROUND OF THE ASSESSEE. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN ITA NO.2072/MDS/2015 IS ALLOWED. ORDER PRONOUNCED ON FRIDAY, THE 22ND DAY OF JANUAR Y, 2016, AT CHENNAI. SD/- SD/- ( ) (CHANDRA POOJARI) / ACCOUNTANT MEMBER ( . ! ) (G. PAVAN KUMAR) /JUDICIAL MEMBER / CHENNAI / / DATED:22.01.2016 KV 0 ( *',23 43%, / COPY TO: 1 . &' / APPELLANT 3. 5, () / CIT(A) 5. 389 *',' / DR 2. *+&' / RESPONDENT 4. 5, / CIT 6. 9:$ ; / GF