The Dy. Commissioner of Income Tax, Circle-3(3), Ahmedabad V. M/s. Saintfoin Enterprises LLP, Ahmedabad

ITA 2076/AHD/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5860 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 7 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-03-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2013-2014
• Appeal Filed On: 10-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Capital asset

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH (BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER & SHRI S. S. GODARA, JUDICIAL MEMBER) ITA. NO: 2076/AHD/2016 (ASSESSMENT YEAR: 2013-14) DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-3(3), AHMEDABAD V/S M/S. SAINTFOIN ENTERPRISES LLP 3 RD FLOOR, SANDESH BHAVAN LAD SOCIETY ROAD BODAKDEV, AHMEDABAD- 380054 (APPELLANT) (RESPONDENT) PAN: ACBFS4303H APPELLANT BY : SHRI PRASOON KABRA, SR. D .R. RESPONDENT BY : SHRI PARIN SHAH ADV. ( )/ ORDER DATE OF HEARING : 19 -03-201 8 DATE OF PRONOUNCEMENT : 23 -03-2018 PER N.K. BILLAIYA, ACCOUNTANT MEMBER: 1. THIS APPEAL BY THE REVENUE IS PREFERRED AGAINST THE ORDER OF THE LD. CIT(A)-3, AHMEDABAD DATED 13.06.2016 PERTAINING TO A.Y. 2013- 14. ITA NO 2076/ AHD/2016 . A.Y. 2013-1 4 2 2. THE ONLY GRIEVANCE OF THE REVENUE IS THAT THE LD. C IT(A) ERRED IN DELETING THE ADDITION OF RS. 50 LACS MADE ON ACCOUNT OF EXCESS C LAIM OF DEDUCTION U/S. 54EC OF THE ACT. 3. DURING THE COURSE OF THE SCRUTINY ASSESSMENT PROCEE DINGS, THE A.O. NOTICED THAT THE ASSESSEE HAS CLAIMED DEDUCTION U/S. 54EC O F THE ACT ON SALE OF IMMOVABLE PROPERTIES TO THE TUNE OF RS. 1 CRORE. 4. THE A.O. FOUND THAT RS. 50 LACS HAVE BEEN INVESTED IN BONDS IN TWO FINANCIAL YEARS. THE A.O. WAS OF THE FIRM BELIEF THAT AS PER THE PROVISIONS OF SECTION 54EC OF THE ACT. THE INVESTMENT CANNOT EXCEED RS. 5 0 LACS AND ACCORDINGLY ALLOWED EXEMPTION ONLY TO THE EXTENT OF RS. 50 LACS AND DISALLOWED THE CLAIM OF EXEMPTION IN RESPECT OF THE BALANCE OF RS. 50 LACS. 5. ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) A ND STRONGLY RELIED UPON VARIOUS JUDICIAL DECISIONS. IT WAS BROUGHT TO THE N OTICE OF THE LD. CIT(A) THAT THE FINANCE BILL, 2014 HAS INSERTED SECOND PROVISO BUT ONLY WITH EFFECT FROM 01.04.2015 AND SUBSEQUENT YEARS AND THEREFORE NOT A PPLICABLE FOR THE YEAR UNDER CONSIDERATION. 6. DRAWING SUPPORT FROM VARIOUS JUDICIAL DECISIONS, TH E LD. CIT(A) DIRECTED THE A.O. TO ALLOW THE CLAIM OF DEDUCTION IN RESPECT OF INVESTMENT IN BONDS TO THE TUNE OF RS. 50 LACS. 7. AGGRIEVED BY THIS, THE REVENUE IS BEFORE US. THE LD . D.R. COULD NOT BRING ANY FACTUAL OR LEGAL ERROR IN THE FINDINGS OF THE LD. C IT(A). THE CO-ORDINATE BENCH ITA NO 2076/ AHD/2016 . A.Y. 2013-1 4 3 IN THE CASE OF ASPIN GINWALA AND SHREE RAM ENGG. & MFG. INDUSTRIES 52 SOT 16, 20 TAXMANN.COM 75 ON IDENTICAL FACTS HAS HELD AS UNDER:- THE APPELLANT SOLD PROPERLY ON 22.10.2007 AND COMPU TED LONG-TERM CAPITAL GAINS. THE SECTION 54EC INVESTMENT WAS REQUIRED TO HE MADE WITHIN 6 MONTHS I.E. ON OR BEFORE 21.04.2008. THE APPELLANT INVESTED RS. 50 LAKHS IN REC BONDS ON 31.12.2007 (F.Y. 2007- 08. WITHIN THE 6 M TIME LIMI T) AND RS.50 LAKHS IN NHA1 BONDS ON 26.5.2008 (F.Y. 2008-09. BEYOND THE 6 M TI ME LIMIT) AND CLAIMED A DEDUCTION OF RS. 1 CRORE. THE APPELLANT CLAIMED THA T NO ELIGIBLE SCHEME WAS AVAILABLE FOR SUBSCRIPTION FROM 1.4.2008 TO 28.5.20 08 AND THAT HE APPLIED IN THE NHAI BONDS AS SOON AS IT OPENED AND THAT HE WAS PRE VENTED BY SUFFICIENT CAUSE FROM INVESTING WITHIN THE LIME PERIOD OF 6 MONTHS. THE ASSESSING OFFICER & CIT(A) REJECTED THE CLAIM FOR EXEMPTION OF RS. 50 LAKHS IN RESPECT OF THE NHAI BONDS ON THE GROUND THAT (I) IT EXCEEDED THE MONETARY LIMIT OF RS. 50 LAKHS PRESCRIBED IN SECTION 54EC AD (II) IT WAS MADE BEYOND THE TIME LI MIT OF 6 MONTHS. ON APPEAL TO THE TRIBUNAL, HELD ALLOWING THE APPEAL : (I) THE PROVISO TO SECTION 54EC PROVIDES THAT THE INVESTMENT MADE IN A LONG TE RM SPECIFIED ASSET BY AN APPELLANT 'DURING ANY FINANCIAL YEAR' SHOULD NOT EXC EED RS. 50 LAKHS. IT IS CLEAR THAT IF THE APPELLANT TRANSFERS HIS CAPITAL ASSET A FTER 30TH SEPTEMBER OF THE FINANCIAL YEAR HE GETS AN OPPORTUNITY TO MAKE AN IN VESTMENT OF RS. 50 LAKHS EACH IN TWO DIFFERENT FINANCIAL YEARS AND IS ABLE TO CLA IM EXEMPTION UPTO RS, 1 CRORE UNDER SECTION 54EC. THE LANGUAGE OF THE PROVISO IS CLEAR AND UNAMBIGUOUS AND SO THE APPELLANT IS ENTITLED TO GET EXEMPTION UPTO RS. 1 CRORE IN THIS CASE;(II) THOUGH THE TIME LIMIT OF 6 MONTHS FOR MAKING THE INVESTMEN T UNDER SECTION 54EC EXPIRED ON2L.4.2008. NO BONDS WERE AVAILABLE FOR SUBSCRIPTI ON BETWEEN 1.4.2008 LO 28.5.2008. THE INVESTMENT WAS MADE AS SOON AS THE S UBSCRIPTION OPENED ON 26.5.2008. THE APPELLANT WAS ACCORDINGLY PREVENTED BY SUFFICIENT CAUSE WHICH WAS BEYOND HIS CONTROL IN MAKING INVESTMENT IN THES E BANDS WITHIN THE TIME PRESCRIBED. EXEMPTION SHOULD BE GRANTED IN CASES WH ERE THERE IS A DELAY IN MAKING INVESTMENT DUE TO NON-AVAILABILITY OF THE BO NDS. ' 8. SINCE THE AMENDMENT BROUGHT IN THE STATUTE IS WITH EFFECT FROM 01.04.2015AND IS APPLICABLE ON AND FROM ASSESSMENT YEAR 2015-16, THE SAME IS NOT APPLICABLE ON THE FACTS OF THE YEAR UNDER CONSIDERATION. WE, T HEREFORE DO NOT FIND ANY REASON TO INTERFERE WITH THE FINDINGS OF THE LD. CI T(A). ITA NO 2076/ AHD/2016 . A.Y. 2013-1 4 4 9. APPEAL FILED BY THE REVENUE IS ACCORDINGLY DISMISSE D. ORDER PRONOUNCED IN OPEN COURT ON 23- 03 - 2018 SD/- SD/- (S. S. GODARA) (N. K. BILLAIYA) JUDICIAL MEMBER TRUE COPY A CCOUNTANT MEMBER AHMEDABAD: DATED 23 /03/2018 RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHME DABAD