Uma Kymal, CHENNAI V. ITO, CHENNAI

ITA 2099/CHNY/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 73681 (ITAT-CHENNAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-02-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 29-01-2015
• Assessment Year: 2011-2012
• Appeal Filed On: 11-08-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: N MADHAVAN
• Assessee Lawyers: B RAMAKRISHNAN
• Keywords: Capital asset; Gift; Cost of acquisition; Fair market value; Corroborative evidences
• Section: 143(3); 54F

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH : CHENNAI . . , . . , ! '# [BEFORE SHRI B.R. BASKARAN, ACCOUNTANT MEMBER AND SHRI S. S. GODARA, JUDICIAL MEMBER] ./ I.T.A.NO.2099/MDS/2014 / ASSESSMENT YEAR : 2011-12 SMT. UMA KYMAL 5/82 BLUE BEACH ROAD NEELANGARAI CHENNAI 41 VS. THE INCOME TAX OFFICER INTERNATIONAL TAXATION I(2) CHENNAI [PAN BWQPK 5872 D] ( $% / APPELLANT) ( &'$% /RESPONDENT) / APPELLANT BY : SHRI B. RAMAKRISHNAN, CA /RESPONDENT BY : SHRI N. MADHAVAN, JCIT / DATE OF HEARING : 29-01-2015 / DATE OF PRONOUNCEMENT : 06-02-2015 ( / O R D E R PER S.S.GODARA, JUDICIAL MEMBER THIS ASSESSEES APPEAL FOR ASSESSMENT YEAR 20 11-12, IS DIRECTED AGAINST ORDER OF THE COMMISSIONER OF INC OME-TAX (APPEALS)- VII, CHENNAI DATED 6.6.2014, PASSED IN APPEAL NO.13 08/13-14, IN PROCEEDINGS UNDER SECTION 143(3) OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT). I.T.A.NO.2099/14 :- 2 -: 2. THE ASSESSEES THREE FOLDED PLEADINGS AVER THAT VA LUE OF HER PROPERTY TRANSFERRED HAS BEEN WRONGLY TAKEN AS ` 1500/- AS ON 1.4.1981 INSTEAD OF ` 2,50,000/-, ITS HOLDING PERIOD HAS TO INCLUDE HER FATHERS OWNERSHIP U/S 2(42A) EXPLANATION 1(B) R.W .S 49(1) AND THE DEDUCTION CLAIM U/S 54EC AMOUNTING TO ` 22,50,000/- HAS BEEN WRONGLY DISALLOWED; BY BOTH THE LOWER AUTHORITIES. 3. THE ASSESSEE IS A NON-RESIDENT/AN INDIVIDUAL. SHE DERIVES INCOME FROM CAPITAL GAINS, INTEREST AND OTHER SOU RCES. THE ASSESSEE HAD FILED HER RETURN ON 10.12.2012 ADMITTING INCOME OF ` 85,741/-. THE SAME WAS SUMMARILY PROCESSED. THEREAFTER, TH E ASSESSING OFFICER TOOK UP SCRUTINY. 4. THE ASSESSEE IS DAUGHTER OF LATE SHRI P.K.KYMAL. HE HAD ACQUIRED A PLOT MEASURING 12000 SQ FT FOR ` 3000/- ON 4.2.1967 BY WAY OF A REGISTERED TITLE DEED. AND LEFT FOR HEAVENLY ABODE ON 24.2.2005 LEAVING BEHIND THE ASSESSEE, HER MOTHER SMT. SARAS WATHI KYMAL AND BROTHER SHRI RAMESH KYMAL. EACH ONE OF THEM INHERI TED THE AFORESAID PLOT TO THE EXTENT OF 4000 SQ FT. THIS WAS FOLLOW ED BY SMT. SARASWATHI KYMALS WILL EXECUTED ON 15.11.2006 BEQUEATHING HE R 4000 SQ FT PLOT IN FAVOUR OF THE ASSESSEE AND HER BROTHER IN EQUAL SHARE MEASURING 2000 SQ FT. SHE PASSED AWAY ON 17.7.2010. BOTH HE R LEGAL HEIRS I.T.A.NO.2099/14 :- 3 -: RECEIVED AREA OF 2000 SQ FT EACH. IN THIS MANNER, BOTH OF THEM BECAME OWNERS OF PLOT MEASURING 6000 SQ FT EACH. 5. THE CASE FILE REVEALS THAT THE ASSESSEE TRANSFERRE D HER HALF SHARE MEASURING 6000 SQ FT TO HER BROTHER FOR ` 90 LAKHS ON 12.11.2010. SHE INVESTED THE RESULTING CAPITAL GAI NS IN REC CAPITAL GAIN BONDS U/S 54EC I.E ` 50 LAKHS ON 31.12.2010 AND ` 22.50 LAKHS IN MAY, 2011, RESPECTIVELY. SHE STRESSES THAT THE PAY MENT FOR THE LATTER TRANSACTION HAD BEEN EFFECTED ON 11.5.2011 AND CLEA RED ON 14.5.2011. HER BANK STATEMENT IS ALSO SOUGHT TO BE RELIED. TH E ASSESSEE COMPUTED HER CAPITAL GAINS AS ` NIL ACCORDINGLY. HER COMPUTATION IS FORTHCOMING AT PAGE 3 OF THE ASSESSMENT ORDER DATED 21.2.2014. THE ASSESSEE ADOPTED FAIR MARKET VALUE AS ON 1.4.1981 A S ` 2.5 LAKHS. THIS WAS INDEXED TO ` 17,77,500/-. SHE REDUCED THIS AMOUNT FROM THE SALE CONSIDERATION OF ` 90 LAKHS. THE BALANCE AMOUNT OF ` 72,22,500/- WAS CLAIMED AS SECTION 54EC DEDUCTION (SUPRA). 6. THE ASSESSEE WOULD JUSTIFY HER FAIR MARKET VALUE A S ON 1.4.1981 IN THE HANDS OF PREVIOUS OWNER/HER FATHER. SHE QUOTED SECTION 48 OF THE ACT. IT WAS PLEADED THAT THE CAP ITAL ASSET TRANSFERRED HAD BEEN ACQUIRED BY WAY OF INHERITANCE/WILL AND TH E PROPERTYS INDEXATION COST HAD TO BE CALCULATED WITH REFERENCE TO THE YEAR IN I.T.A.NO.2099/14 :- 4 -: WHICH HER FATHER HAD ACQUIRED THE ASSET AND NOT THE ONE IN WHICH SHE HAD HERSELF BECAME OWNER. THE ASSESSING OFFICE R QUOTED SECTION 48 EXPLANATION(III) R.W.S 49(1)(III)(A) AND OBSERVE D THAT THE SAID INDEXATION WOULD BE TAKEN ONLY FROM THE DATE OF AS SESSEE BECAME OWNER AND NOT WHEN HER FATHER HAD ACQUIRED OWNERSHI P. IT WAS HELD THAT THE ASSESSEE WAS ALSO NOT ELIGIBLE TO INDEX T HE COST OF ACQUISITION FROM THE YEAR 1981 BUT ONLY FROM 24.2.2005 (THE DAT E OF HERSELF BECAME OWNER). THE ASSESSING OFFICER ALSO REJECTED THE ASSESSEES RELIANCE ON CASE LAW CIT VS MANJULA J SHAH, 355 ITR 474(BOMBAY) IN SUPPORT OF HER INDEXATION PLEA FROM THE YEAR 1981 B Y STATING THAT THE REVENUES SLP IS PENDING BEFORE THE HON'BLE APEX CO URT. HE REFERRED TO THE SROS LETTER DATED 31.1.2014 QUOTING FAIR MA RKET VALUE OF THE CONCERNED SURVEY NUMBER FROM 1974 TO 1981 TO BE ONL Y ` 1000 PER ACRE AS AGAINST THE REGISTERED VALUE QUOTED OF ` 3000/- WAY BACK IN 1967. THE ASSESSING OFFICER FURTHER OBSERVES THAT THE SAID VALUE HAS TO BE TAKEN AS ` 1500/- ONLY AS ON 1.4.1981. IT IS EVIDENT TO US FROM THE ASSESSMENT ORDER T HAT THE ASSESSING OFFICER REFUSED TO AGREE WITH THE ASSESS EES DEDUCTION CLAIM U/S 54EC. HE WAS OF THE OPINION THAT THE LATTER IN VESTMENT OF ` 22.50 LAKHS FELL BEYOND THE TIME LIMIT PRESCRIBED I. SI X MONTHS FROM THE DATE OF TRANSFER FALL I.E 12.11.2010. ALSO THAT THIS INVESTMENT VIOLATED I.T.A.NO.2099/14 :- 5 -: MAXIMUM PERMISSIBLE LIMIT OF ` 50 LAKHS IN THE ACT WHICH WOULD NOT BE STRETCHED TO ` 50 LAKHS EACH IN TWO FINANCIAL YEARS. HE DISAGREE D WITH THE ASSESSEES ACTION SPLITTING UP SECTION 54EC IN VESTMENTS IN TWO FINANCIAL YEARS I.E 31.12.2010 AND 31.5.2011. THIS RESULTED IN DISALLOWANCE OF THE IMPUGNED DEDUCTION. THE ASSESS ING OFFICER ACCORDINGLY RE-COMPUTED THE ASSESSEES LONG TERM C APITAL GAINS AS ` 39,97,850/-. 7. THE ASSESSEE PREFERRED AN APPEAL. THE CIT(A) HAS REJECTED ALL HER THREE GROUNDS AS UNDER: 4. THE ISSUES INVOLVED IN THIS APPEAL ARE AS UNDER : 1. INDEXED COST OF ACQUISITION WAS ADOPTED AT RS. 2,150/- BY ADOPTING THE VALUE OF THE PROPERTY AT ` 1500/- AGAINST THE CLAIM OF RS. 17,77,500/- BY ADOPTING THE VALUE OF PROPERTY AT RS. 2,50,000/-. 2. EXEMPTION U/S 54F WAS RESTRICTED TO RS. 50,00,000/- AGAINST THE CLAIM OF RS. 72,22,500/-. 3. LTCG WAS WORKED OUT AT RS. 39,97,850/- AGAINST THS NIL CLAIM OF THE ASSESSEE. 4.1 THE ASSESSEE'S FATHER (DECEASED) PURCHASED THE ENTIRE PROPERTY FOR RS.3,000/- ONLY ON 04.02.1967. HE DIED ON 24.02.2005. HENCE THE ASSESSEE BECAME THE OWNER OF 4000 SQ.FT. OF LAND ON THE DEATH OF HER FATHER. THE ASSE SSEE'S MOTHER EXECUTED WILL DATED 15.11.2006 AND DIED ON 17.07.2010. HENCE THE ASSESSEE BECAME THE OWNER OF FURTHER PIECE OF LAND OF 2,000 SQ.FT. THUS THE ASSESSEE BEC AME THE OWNER OF 6000 SQ.FT, OF LAND WHICH WAS SOLD TO THE ASSESSEE'S BROTHER ON 12.11.2010. IT IS NOT KNOWN HOW THE ASSE SSEE TOOK THE COST OF LAND AS ON 01.04.1981 AT RS.2,50,000/-. I.T.A.NO.2099/14 :- 6 -: THERE IS NO SUPPORTING EVIDENCE TO PROVE THE VALUE OF RS.2,50,000/- AS COST OF ACQUISITION BY THE SELLER. WHERE THE CAPITAL ASSET BECAME THE PROPERTY OF THE ASSESSEE B Y SUCCESSION, INHERITANCE OR DEVOLUTION, THE COST OF ACQUISITION OF THE ASSET SHALL BE DEEMED TO BE THE COST FOR WHICH PREVIOUS OWNER OF THE PROPERTY ACQUIRED IT, A S INCREASED BY THE COST OF IMPROVEMENT OF THE ASSETS INCURRED OR BORNE BY THE PREVIOUS OWNER OR THE ASSESSEE AS THE CASE MAY BE. IN THIS CASE, THE ENTIRE PROPERTY WAS PURCHASED BY THE FATHER OF THE ASSESSEE FOR RS.3,00 0/- ONLY ON 04.03.1967. EXPLANATION (III) TO SEC.48 OF THE A CT READS AS UNDER : INDEXED COST OF ACQUISITION' MEANS AN AMOUNT WHICH BEARS TO THE COST OF ACQUISITION THE SAME PROPORTION AS COST INFLATION INDEX FOR THE YEAR IN WHICH THE ASSET IS TRANSFERRE D BEARS TO THE COST INFLATION INDEX FOR THE FIRST YEAR IN WHIC H THE ASSET WAS HELD BY THE ASSESSEE OR FOR THE YEAR BEGINNING ON THE 1 ST DAY OF APRIL, 1981, WHICHEVER IS LATER; 4.2 HENCE IN THIS CASE THE VALUE AS ON 01.04.1981 I S TO BE TAKEN AS COST OF ACQUISITION FOR CALCULATION OF CAP ITAL GAINS. AS PER THE SUB-REGISTRAR OF THAT AREA, THE GUIDELIN E VALUE WAS LESS .THAN THE VALUE FOR WHICH THE PROPERTY WAS PURCHASED BY THE ASSESSEE'S FATHER. HENCE PURCHASE VALUE OF HALF SHARE OF PROPERTY WAS RS.1,500/- WHICH IS M ORE THAN THE GUIDELINE VALUE AS ON 01.04.1981, THE SAME WAS ADOPTED BY THE AO TO FIND OUT THE INDEXED COST OF ACQUISITION OF LAND SOLD. IN THE CIRCUMSTANCES, CAS E LAWS RELIED ON BY THE ASSESSEE ARE DISTINGUISHABLE AND H ENCE NOT APPLICABLE TO THE FACTS OF THE CASE AND HENCE R EJECTED. THE ADOPTION OF RS. 1,500/- AS VALUE OF LAND (SUBJECT TO CAPITAL GAINS) IS IN ORDER. 4.3 REGARDING THE RESTRICTION OF CLAIM U/S 54EC OF THE ACT TO RS.50,00,000/- BY THE AO AGAINST THE CLAIM OF RS.72,22,500/-, THE ASSESSEE HAS TO INVEST THE WHOL E OR ANY PART OF CAPITAL GAINS IN THE LONG TERM SPECIFIE D ASSET AT ANY TIME WITHIN A PERIOD OF SIX MONTHS AFTER THE DATE OF TRANSFER. IN THIS CASE, THE ASSESSEE SOLD T HE PROPERTY ON 12.11.2010. THE INVESTMENT IS TO BE MAD E ON OR BEFORE 12.05.2011. BUT THE ASSESSEE MADE INVESTM ENT OF RS.50 LAKHS ON 31.12.2010. SINCE THE INVESTMENT WAS WITHIN TIME, DEDUCTION U/S 54EC OF THE ACT WAS ALLO WED AT RS.50 LAKHS. FURTHER SUM OF RS.22,50,000/- WAS INVE STED ON 31.05.2011 WHICH WAS BEYOND THE TIME ALLOWED FOR INVESTMENT. THE AO DID NOT ALLOW THE DEDUCTION CLAI MED AT RS.22,22,500/-. THE ACTION OF THE AO IS AS PER I.T.A.NO.2099/14 :- 7 -: THE PROVISIONS OF SECTION 54EC OF THE ACT AND THERE IS NO INFIRMITY IN IT. HENCE, I DECLINE TO INTERFERE IN T HE ORDER OF THE ASSESSING OFFICER. 5. IN THE RESULT, THE APPEAL OF THE APPELLANT IS DISMISSED. THIS LEAVES THE ASSESSEE AGGRIEVED. 8. WE HAVE HEARD BOTH PARTIES AND GONE THROUGH THE CAS E FILE. THE ASSESSEES THREE GROUNDS PERTAINED TO FAIR MAR KET VALUE OF THE PROPERTY AS ON 1.4.1981, HOLDING PERIOD IN THE HAND S OF PREVIOUS OWNER FROM THE SAID DATE AND THAT OF DEDUCTION U/S 54EC OF THE ACT. COMING TO THE FIRST ISSUE OF VALUATION OF THE PROPE RTY CLAIMED AS ` 2.5 LAKHS AS ON 1.4.1981 INSTEAD OF ` 1500/- AS PER ITS REGISTERED SALE DEED IN 1967, THERE IS A TIME GAP OF ALMOST 15 YEARS FR OM THE DATE OF ACQUISITION FALLING IN 1967 AND 1.4.1981. THESE CI RCUMSTANCES LEAD US TO A CONCLUSION THAT THERE MUST BE SOME APPRECIATIO N EACH YEAR DURING THIS PERIOD. THERE IS ALSO NO MATERIAL ON RECORDS THAT THIS VALUATION HAS DEPRECIATED. THE REVENUE ARGUES THAT THE SROS LETTER STATES FAIR MARKET VALUE OF THE PROPERTY. HOWEVER, THE SAID CO RRESPONDENCE DOES NOT DISPUTE 1967 VALUATION. IN THESE PECULIAR CI RCUMSTANCES, WE QUOTE CASE LAW CIT VS J. CHELLADURAI [2012] 204 TAX MAN 258 (MAD) AND HOLD THAT INTEREST OF JUSTICE WOULD BE MET IN C ASE AVERAGING FORMULA IS ADOPTED BETWEEN TWO VALUATIONS. A CO-OR DINATE BENCH OF I.T.A.NO.2099/14 :- 8 -: THE 'TRIBUNAL' IN I.T.A.NOS.1017 & 1018/MDS/2011 A CIT VS M/S MAHARAJA SEAFOODS INDIA P. LTD. ORDER DATED 20.3.20 13 HAS ALSO ADOPTED THE VERY CRITERIA. THEREFORE, WE HOLD THA T FAIR MARKET VALUE OF THE ASSESSEES PROPERTY HAS TO BE COMPUTED LUMP SU M @ ` 1,25,000/-. THE ASSESSING OFFICER SHALL ACCORDINGLY RECOMPUTE THE IMPUGNED LONG TERM CAPITAL GAINS. THE FIRST SUBSTANTIVE GROUND I S PARTLY ACCEPTED. 9. NOW WE COME TO THE ASSESSEES SECOND SUBSTANTIVE G ROUND ON HOLDING PERIOD OF THE PROPERTY HAS TO INCLUDE TH E PREVIOUS OWNER/HER FATHERS TITLE DURATION IN COMPUTING THE IMPUGNED CAPITAL GAINS. WE FIND THAT THE HON'BLE BOMBAY HIGH COURT IN CIT VS MANJULA J SHAH (SUPRA) HAS UPHELD A SPECIAL BENCH DECISION OF THE 'TRIBUNAL' HOLDING THAT CAPITAL GAINS ARISING FROM TRANSFER OF A CAPITAL ASSET ACQUIRED BY WAY OF WILL, GIFT ETC HAD TO BE INDEXED WITH REFERENCE TO THE YEAR IN WHICH THE PREVIOUS OWNER FIRST HELD THE ASSET AND NOT YEAR IN WHICH ASSESSEE BECAME ITS OWNER U/S 48 AND EXP LANATION 1(1)(B) TO SECTION 2(42A). THE REVENUE FAILS TO DRAW ANY D ISTINCTION ON FACTS THEREIN. THEREFORE, WE ACCEPT THE ASSESSEES GROU ND AND DIRECT THE ASSESSING OFFICER TO PASS A CONSEQUENTIAL COMPUTAT ION. THIS GROUND IS ACCEPTED. 10. THIS LEAVES US WITH THE ASSESSEES DEDUCTION CLAIM U/S 54EC. THERE IS NO DISPUTE THAT SHE HAD TRANSFERRED HER CAPITAL ASSET I.T.A.NO.2099/14 :- 9 -: ON 12.11.2010. AND INVESTED A SUM OF ` 50 LAKHS ON 31.12.10 AND ` 22.50 LAKHS ON 31.5.2011. THE AUTHORITIES BELOW HO LD THAT THE LATTER INVESTMENT IS BEYOND THE PERIOD OF SIX MONTHS FROM THE DATE OF TRANSFER. IT IS ALSO STATED TO BE VIOLATING MAXIM UM INVESTMENT LIMIT OF ` 50 LAKHS. WE FIND THAT A SPECIAL BENCH OF AHMEDAB AD 'TRIBUNAL' IN ALKABEN B. PATEL VS ITO, I.T.A.NO. 1973/AHD/2012 DA TED 25.3.2014 HOLDS THAT THIS LIMITATION OF SIX MONTHS STARTS NOT FROM THE DATE OF TRANSFER ITSELF BUT FROM THE END OF THE MONTH IN WH ICH THE TRANSFER TOOK PLACE. WE REITERATE THAT THE ASSESSEES INVESTMEN T MADE IN MAY 2011 FALLS WITHIN A PERIOD OF SIX MONTHS FROM 31.12.2010 I.E END OF THE CALENDAR MONTH OF TRANSFER. COMING TO THE LATTER LIMB THAT THE MAXIMUM CAP OF 54EC INVESTMENT IN REC BONDS IS ONLY ` 50 ALKHS IN ONE FINANCIAL YEAR, WE FIND THAT A CO-ORDINATE BENC H IN SMT. SRIRAM INDUBAL VS ITO I.T.A.NO. 1950/MDS/2012, ORDER DA TED 30.1.2013, HAS REJECTED IDENTICAL CONTENTIONS PERTAINING TO IN VESTMENT OF ` 50 LAKHS IN TWO FINANCIAL YEARS AS UNDER: 7. WE HAVE PERUSED THE ORDERS AND HEARD THE RIVAL SUBMISSIONS. THERE IS NO DISPUTE THAT ASSESSEE HAD TRANSFERRED THE CAPITAL ASSET ON WHICH SHE HAD CLAIMED EXEMPTIO N UNDER SECTION 54EC ON 18.2.2008. ASSESSEE HAD ALSO CLAIM ED EXEMPTION UNDER SECTION 54EC ON INVESTMENTS MADE IN REC AND NHAI BONDS. SECTION 54EC(1), WHICH IS RELEVANT TO THE CASE, IS REPRODUCED HEREUNDER, FOR BREVITY:- 54EC. (1) WHERE THE CAPITAL GAIN ARISES FROM THE TRANSFER OF A LONG-TERM CAPITAL ASSET (THE CAPITAL ASSET SO I.T.A.NO.2099/14 :- 10 -: TRANSFERRED BEING HEREAFTER IN THIS SECTION REFERRE D TO AS THE ORIGINAL ASSET) AND THE ASSESSEE HAS, AT ANY TI ME WITHIN A PERIOD OF SIX MONTHS AFTER THE DATE OF SUCH TRANSF ER, INVESTED THE WHOLE OR ANY PART OF CAPITAL GAINS IN THE LONG- TERM SPECIFIED ASSET, THE CAPITAL GAIN SHALL BE DEA LT WITH IN ACCORDANCE WITH THE FOLLOWING PROVISIONS OF THIS SE CTION, THAT IS TO SAY,- (A) IF THE COST OF THE LONG-TERM SPECIFIED ASSET IS NOT LESS THAN THE CAPITAL GAIN ARISING FROM THE TRANSFER OF THE ORIGINAL ASSET, THE WHOLE OF SUCH CAPITAL GAIN SHAL L NOT BE CHARGED UNDER SECTION 45; (B) IF THE COST OF THE LONG-TERM SPECIFIED ASSET IS LES S THAN THE CAPITAL GAIN ARISING FROM THE TRANSFER OF THE O RIGINAL ASSET, 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 ASSET BEARS TO THE WHOLE OF THE CAPITAL GAIN, SHALL NOT BE CHARGED UND ER SECTION 45: [ PROVIDED THAT THE INVESTMENT MADE ON OR AFTER THE 1 ST DAY OF APRIL, 2007 IN THE LONG-TERM SPECIFIED ASSET BY AN ASSESSEE DURING ANY FINANCIAL YEAR DOES NOT EXCEED F IFTY LAKH RUPEES.] 8. THE FIRST CONDITION MENTIONED IN SECTION 54EC(1) IS THAT THE INVESTMENT HAS TO BE MADE WITHIN A PERIOD OF SI X MONTHS FROM THE DATE OF TRANSFER OF CAPITAL ASSET. SINCE THE DATE OF TRANSFER IN THE GIVEN IS 18.2.2008, SIX MONTHS PERI OD WILL ELAPSE ON 17.8.2008. ASSESSEE HAD PURCHASED REC BONDS WOR TH OF ` 50 LAKHS ON 27.2.2008 AND BONDS OF NHAI FOR ` 50 LAKHS ON 30.6.2008. BOTH THESE PURCHASES WERE WITHIN THE SI X MONTHS PERIOD. ONLY QUESTION THAT ARISES IS WHETHER PROVI SO TO SECTION 54EC(1) WOULD LIMIT THE CLAIM OF EXEMPTION TO ` 50 LAKHS. SAID PROVISO MENTIONS THAT INVESTMENT ON WHICH AN ASSESS EE COULD CLAIM EXEMPTION UNDER SECTION 54EC(1) SHALL NOT EXC EED ` 50 LAKHS DURING A FINANCIAL YEAR. SO, THE EXEMPTION P ROVISION HAS TO BE CONSTRUED NOT TRANSACTION-WISE BUT, FINANCIAL YE AR-WISE. NO DOUBT, EXPLANATORY MEMORANDUM DOES SAY THAT LIMITAT ION HAS I.T.A.NO.2099/14 :- 11 -: BEEN PLACED WITH A VIEW TO ENSURE EQUITABLE DISTRIB UTION OF BENEFITS AMONG THE PROSPECTIVE INVESTORS. RELEVANT EXPLANATORY MEMORANDUM IS REPRODUCED FOR BREVITY:- THE QUANTUM OF INVESTIBLE BONDS ISSUED BY NHAI AND REC BEING LIMITED, IT WAS FELT NECESSARY TO ENSURE THAT THE BENEFIT WAS AVAILABLE TO ALL THE INVESTORS. FOR TH IS PURPOSE, IT WAS NECESSARY TO ENSURE THAT THE LIMITE D NUMBER OF BONDS AVAILABLE FOR SUBSCRIPTION IS ALSO AVAILABLE FOR SMALL INVESTORS. THEREFORE, WITH A VIEW TO ENS URE EQUITABLE DISTRIBUTION OF BENEFITS AMONGST PROSPECT IVE INVESTORS, THE GOVERNMENT DECIDED TO IMPOSE A CEILI NG ON THE QUANTUM OF INVESTMENT THAT COULD BE MADE IN SUC H BONDS. ACCORDINGLY, THE SAID SECTION HAS BEEN AMEN DED SO AS TO PROVIDE FOR A CEILING ON INVESTMENT BY AN ASS ESSEE IN SUCH LONG-TERM SPECIFIED ASSETS. INVESTMENTS IN SU CH SPECIFIED ASSETS TO AVAIL EXEMPTION UNDER SECTION 54EC , ON OR AFTER THE 1 ST DAY OF APRIL, 2007 WILL NOT EXCEED FIFTY LAKH RUPEES IN A FINANCIAL YEAR. LAST SENTENCE OF THE EXPLANATORY MEMORANDUM CLEARLY STATES THAT THE EXEMPTION FOR INVESTMENT CANNOT EXCEED ` 50 LAKHS IN A FINANCIAL YEAR. THEREFORE, IF THE ASSESSEE IS ABLE TO KEEP THE SIX MONTHS LIMIT FROM THE DATE OF TRANSFER OF CAPITAL ASSET, BUT, STILL ABLE TO PLACE INVESTMENT OF ` 50 LAKHS EACH IN TWO DIFFERENT FINANCIAL YEARS, WE CANNOT SAY THAT THE RESTRICTIVE PROVISO WILL LIMIT THE CLAIM TO ` 50 LAKHS ONLY. SINCE ASSESSEE HERE HAD PLACED ` 50 LAKHS IN TWO DIFFERENT FINANCIAL YEARS BUT WITHI N SIX MONTHS PERIOD FROM THE DATE OF TRANSFER OF CAPITAL ASSET, ASSESSEE WAS DEFINITELY ELIGIBLE TO CLAIM EXEMPTION UPTO ` 1 CRORE. THE SAME VIEW HAS BEEN TAKEN BY AHMEDABAD BENCH OF THIS TRIB UNAL IN THE CASE OF ASPI GINWALA & OTHERS (SUPRA). WE ARE, THEREFORE, OF THE OPINION THAT THE ASSESSEE HAS TO SUCCEED IN THI S APPEAL. CLAIM OF THE ASSESSEE FOR EXEMPTION UPTO ` 1 CRORE HAS TO BE ALLOWED IN ACCORDANCE WITH SECTION 54EC OF THE ACT. 9. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS A LLOWED. THE REVENUE FAILS TO CONTROVERT THE AFORESAID VIEW . NOR DOES IT POINT OUT ANY CASE LAW TO THE CONTRARY. THEREFO RE, WE ACCEPT THIS I.T.A.NO.2099/14 :- 12 -: GROUND AS WELL IN ASSESSEES FAVOUR. SHE IS HELD ENTITLED FOR SECTION 54EC RELIEF QUA HER LATTER INVESTMENT OF ` 22.50 LAKHS AS WELL. 11. THE ASSESSEES APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED ON FRIDAY, THE 6 TH OF FEBRUARY, 2015, AT CHENNAI. SD/- SD/- ( . . ) (B.R. BASKARAN) / ACCOUNTANT MEMBER ( . . ) (S. S. GODARA) ! '# / JUDICIAL MEMBER $! / CHENNAI %' / DATED: 6 TH FEBRUARY, 2015 RD '&'' ()'*) / COPY TO: ' 1 . / APPELLANT 4. ' + / CIT 2. / RESPONDENT 5. ),-' . / DR 3. ' +'/0 / CIT(A) 6. -1'2 / GF