The ITO, (Intl. Taxn.)-I, Ahmedabad V. Subhra Anant Raje, Ahmedabad

ITA 2091/AHD/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 8248 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 3 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-11-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 15-07-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Capital asset; Gift
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH AHMEDABAD BEFORE, SHRI N. K. BILLAIYA , ACCOUNTANT MEMBER AND SHRI S. S. GODARA, JUDICIAL MEMBER ITA NO. 2091/AHD/2015 (ASSESSMENT YEAR: 2011-12) INCOME TAX OFFICER, (INTERNATIONAL TAXATION)-I, 211, 2 ND FLOOR, NAVJEEVAN TRUST BUILDING, B/H. GUJARAT VIDYAPITH, ASHRAM ROAD, AHMEDABAD APPEL LANT VS. SUBHRA ANANT RAJE, 302, SHALIGRAM, OPP. ATIRA, VASTRAPUR, AHMEDABAD RESPONDENT PAN: APQPR0726M /BY REVENUE : SHRI MUDIT NAGPAL, SR. D.R. /BY ASSESSEE : NONE /DATE OF HEARING : 01.11.2017 /DATE OF PRONOUNCEMENT : 01.11.2017 ORDER PER S. S. GODARA, JUDICIAL MEMBER THIS REVENUES APPEAL FOR ASSESSMENT YEAR 2011-12 A RISES AGAINST THE CIT(A)-13, AHMEDABADS ORDER DATED 29.05.2015 IN CA SE NO. CIT(A)- 13/AHD/INTL.TAXN./89/2014-15, REVERSING ASSESSING O FFICERS ACTION DISALLOWING ITA NO. 2091/AHD/15 [ ITO VS. SUBHRA ANANT RAJE] A.Y. 2011-12 - 2 - ASSESSEES DEDUCTION CLAIM OF RS.50LACS U/S.54EC OF THE ACT ON THE GROUND THAT THE RELEVANT CAPITAL GAINS HAD BEEN REINVESTED TO THE T UNE OF RS.50LACS EACH IN A TIME SPAN OF TWO SEPARATE ASSESSMENT YEARS, IN PROCEEDIN GS U/S. 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. 2. CASE CALLED TWICE. NONE APPEARS AT ASSESSEES B EHEST. CASE FILE REVEALS THAT THE REGISTRY HAS ALREADY SENT AN RPAD NOTICE TO THE ASSESSEE DATED 04.10.2017. HE IS ACCORDINGLY PROCEEDED EX PARTE. 3. IT EMERGES FROM THE INSTANT CASE FILE THAT THERE IS NO DISPUTE BETWEEN THE PARTIES ABOUT THE FACT THAT ASSESSEE HAD DISCLOSED LONG TERM CAPITAL GAINS OF RS.1,60,83,089/- TO BE ARISING FROM SURRENDER OF TE NANCY RIGHT AS WELL AS SALE OF SHARES IN A PRIVATE LIMITED COMPANY, RECEIVED THROU GH GIFT. THIS FOLLOWED SECTION 54EC DEDUCTION CLAIM TO THE TUNE OF RS.1CRORE I.E. RS.50LACS EACH REINVESTED FROM THE ABOVE CAPITAL GAINS ON 27.12.2010 AND 25.04.201 1 IN NHAI AND REC BONDS IN THE NATURE OF RECOGNIZED MODE OF DEDUCTION. THE AS SESSING OFFICER WENT IN A DETAILED DISCUSSION TO CONCLUDE THAT THE IMPUGNED D EDUCTION PROVISION COULD NOT BE SPREAD OVER TO THE MAXIMUM AMOUNT LIMIT OF RS.50LAC S EACH SPREAD OVER IN TWO ASSESSMENT YEARS. HE WAS OF THE VIEW THAT THE CRUC IAL EXPRESSION ANY FINANCIAL YEAR MEANT ONLY ONE FINANCIAL YEAR OF REINVESTMENT AND NOT MORE THAN THAT. HE THEREFORE DISALLOWED ASSESSEES SECTION 54EC DEDUCT ION TO THE EXTENT OF RS.50LACS IN ASSESSMENT ORDER DATED 25.03.2014. 4. THE CIT(A) REVERSES ASSESSING OFFICERS ACTION A S UNDER: 5. DURING THE APPELLATE PROCEEDINGS THE APPEL LANT SUBMITTED IN THE WRITTEN SUBMISSION AS UNDER: THE APPELLANT HAS STATED THAT HER ACTION OF INVESTM ENT OF RS. 100 LAKHS CLAIMED EXEMPTED U/S. 54EC OF THE ACT IS FULLY SUPP ORTED BY THE DECISION OF IT AT, AHMEDABAD IN THE CASE OF SHRI ASPI GINWALA V/S ACIT , CIRCLE 5, BARODA IN ITA NO. 3226/AND/2011. RELEVANT PORTION OF THE JUDGEMEN T IS-REPRODUCED AS UNDER: 'THE DISPUTE WHICH REMAINS TO BE DECIDED BY US IN THIS CASE IS WHETHER AS PER THE PROVISIONS OF SECTION 54EC THE ASSESSEE IS ENTITLED FOR EXEMPTION OF RS. 1 ITA NO. 2091/AHD/15 [ ITO VS. SUBHRA ANANT RAJE] A.Y. 2011-12 - 3 - CRORE AS SIX MONTHS PERIOD FOR INVESTMENT IN ELIGIB LE INVESTMENT INVOLVES; FINANCIAL YEARS. IF THE ANSWER TO THIS QUESTION IS 'YES', WHETHER INVESTMENT MADE BY THE ASSESSEE ON 26-05-2008 BEYOND SIX MONTHS PER IOD IS ELIGIBLE FOR EXEMPTION IN VIEW OF THE FACT THAT NO SUBSCRIPTION FOR ELIGIB LE INVESTMENT WAS AVAILABLE TO THE ASSESSEE FROM 1ST APRIL, 2008 TO 26-05-2008. 8 WHILE GOING THROUGH THE PROVISO OF SECTION 54EC, WE FIND THAT THE PROVISO TO SECTION READS AS UNDER:- [PROVIDED THAT THE INVESTMENT MADE ON OR AFTER THE 1ST DAY OF APRIL, 2007 IN THE LONG TERM SPECIFIED ASSET BY AN ASSESSEE DURING ANY FINANCIAL YEAR DOES NOT EXCEED FIFTY LAKH RUPEE]' IT IS CLEAR FROM THIS PROVISO THAT WHERE ASSESSEE T RANSFERS HIS CAPITAL ASSET AFTER 30TH SEPTEMBER OF THE FINANCIAL YEAR HE GETS AN OPP ORTUNITY TO MAKE AN INVESTMENT OF RS.50 LAKHS EACH IN TWO DIFFERENT FINANCIAL YEAR S AND IS ABLE TO CLAIM EXEMPTION UPTO RS. 1 CRORE U/S 54EC OF THE ACT. SINCE THE LAN GUAGE OF THE PROVISO IS CLEAR AND UNAMBIGUOUS, WE HAVE NO HESITATION IN HOLDING T HAT THE ASSESSEE IS ENTITLED TO GET EXEMPTION UPTO RS. 1 CRORE IN THIS CASE. THIS V IEW OF OURS GETS SUPPORT FROM THE FOLLOWING FINDING OF THE HON'BLE SUPREME-COURT IN THE CASE OF IPCA LAB 266 ITR 521 (SC), WHEREIN IT HAS BEEN HELD BY THE HON'B LE SUPREME COURT THAT 'EVEN THOUGH A LIBERAL INTERPRETATION HAS TO BE GIV EN TO SUCH A PROVISION THE INTERPRETATION HAS TO BE AS PER THE WORDING OF THE SECTION. IF THE WORDING OF THE SECTION IS CLEAR, THEN BENEFITS WHICH ARE NOT AVAIL ABLE CANNOT BE CONFERRED BY IGNORING OR MISINTERPRETING WORDS IN THE SECTION' HERE THE SITUATION IS REVERSE. SINCE THE WORDING O F THE PROVISO TO SECTION 54EC IS CLEAR, THE BENEFITS WHICH ARE AVAILABLE TO THE ASSE SSEE CANNOT BE DENIED. IN VIEW OF ABOVE, IT IS HEREBY HELD THAT THE ASSESSEE IS EN TITLED FOR EXEMPTION OF RS. 1 CRORE AS SIX MONTHS' PERIOD FOR INVESTMENT IN ELIGI BLE INVESTMENTS INVOLVED IS TWO FINANCIAL YEARS.' DECISION: I HAVE CAREFULLY CONSIDERED THE ASSESSMENT ORDER AND THE SUBMISSIONS OF THE APPELLANT FILED DURING THE APPELLATE PROCEEDING S DISCUSSED ABOVE. IN VIEW OF THE DECISION OF THE JURISDICTIONAL ITAT ON THIS ISSUE DISCUSSED ABOVE, THIS GROUND OF APPEAL OF THE APPELLANT IS AL LOWED. 5. WE HAVE HEARD LEARNED DEPARTMENTAL REPRESENTATIV E. CASE FILE PERUSED. IT HAS COME ON RECORD THAT THE CIT(A) HAS FOLLOWED THE ABOVE CO-ORDINATE BENCH ORDER IN CONCLUDING THAT ASSESSEES REINVESTMENT OF CAPIT AL GAINS TO THE TUNE OF RS.50LACS EACH SPREAD OVER IN TWO FINANCIAL YEARS FALLING WIT HIN 6 MONTHS IS VERY MUCH ALLOWABLE AS DEDUCTION CLAIM U/S.54 EC OF THE ACT. HONBLE MADRAS HIGH COURTS ITA NO. 2091/AHD/15 [ ITO VS. SUBHRA ANANT RAJE] A.Y. 2011-12 - 4 - JUDGMENT IN CIT VS. C. JAICHANDER & OTHER CONNECTED CASE TAX CASE APPEALS 419 & 533 OF 2014 DECIDED ON 15.09.2014 ALSO ADOPTS A S IMILAR REASONING THAT THERE IS NO BAR AS PROPAGATED AT REVENUES BEHEST IN ALLOWIN G SUCH A DEDUCTION CLAIM. THEIR LORDSHIPS FURTHER TAKE INTO ACCOUNT AMENDMENT IN SECTION 54EC (1) BY INSERTION OF SECOND PROVISO W.E.F. 01.04.2015 ALONG WITH RELEVANT EXPLANATORY MEMORANDUM TO CONCLUDE THAT THE AMENDMENT EFFECT RE STRICTING THE DEDUCTION AMOUNT TO RS.50LACS ONLY IN ANY CASE WOULD APPLY W. E.F. 01.04.2015 IN RELATION TO ASSESSMENT YEAR 2015-16. WE REITERATE THAT WE ARE IN ASSESSMENT YEAR 2011-12 ONLY. THE REVENUE FAILS TO DISPUTE ALL THESE DEVEL OPMENTS ON JUDICIAL SIDE. WE THEREFORE FIND NO REASON TO INTERFERE WITH THE LEAR NED CIT(A)S ORDER ACCEPTING ASSESSEES DEDUCTION CLAIM U/S.54EC OF THE ACT. 6. THIS REVENUES APPEAL IS ACCORDINGLY DISMISSED. [PRONOUNCED IN THE OPEN COURT ON THIS THE 1 ST DAY OF NOVEMBER, 2017.] SD/- SD/- ( N. K. BILLAIYA ) (S. S. GODA RA) ACCOUNTANT MEMBER JUDICIAL M EMBER AHMEDABAD: DATED 01/11/2017 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- / REVENUE 2 / ASSESSEE ! / CONCERNED CIT 4 !- / CIT (A) ( )*+ ,--. . /0 / DR, ITAT, AHMEDABAD 1 +23 / GUARD FILE. BY ORDER / . // . /0