Sarika Sanjaykumar Shah, Pune V. ITO, Ward 5(4), Pune

ITA 287/PUN/2013

• Counselvise Citation: 28724514 RSA 2013
• Duration Of Justice: 1 year(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 30-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S PRAVEENA
• Assessee Lawyers: C V DESHPANDE
• Keywords: Capital asset; Reasonable cause
• Section: 54F; 27; 54; 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI R.S. PADVEKAR, JUDICIAL MEMBER AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO. 285/PN/2013 (ASSTT.YEAR : 2009-10) KIRANKUMAR POPATLAL SHAH, CINEMA ROAD, BARAMATI, PUNE 413 102, MAHARASHTRA .. APPELLANT PAN NO.AGNPS4826R VS. ITO, WARD-5(3), PUNE .. RESPONDENT ITA NO. 286/PN/2013 (ASSTT.YEAR : 2009-10) AJITKUMAR POPATLAL SHAH, CINEMA ROAD, BARAMATI, PUNE 413 102, MAHARASHTRA .. APPELLANT PAN NO.AGNPS4824P VS. ITO, WARD-5(3), PUNE .. RESPONDENT ITA NO. 287/PN/2013 (ASSTT.YEAR : 2009-10) SARIKA SANJAYKUMAR SHAH, C/O. KIRAN AUTO LINES, CINEMA ROAD, BARAMATI, PUNE 413 102, MAHARASHTRA .. APPELLANT PAN NO.AGNPS4828B VS. ITO, WARD-5(3), PUNE .. RESPONDENT ASSESSEE BY : SHRI C.V. DESHPANDE REVENUE BY : SMT. S. PRAVEENA DATE OF HEARING : 30-01-2014 DATE OF PRONOUNCEMENT : 31-01-2014 2 ORDER PER R.K. PANDA, AM : THE ABOVE 3 APPEALS FILED BY THE RESPECTIVE ASSESSE ES ARE DIRECTED AGAINST THE SEPARATE ORDERS DATED 26-11-20 12 OF THE CIT(A)- III, PUNE RELATING TO ASSESSMENT YEAR 2009-10. SIN CE IDENTICAL GROUNDS HAVE BEEN TAKEN BY THE RESPECTIVE ASSESSEES IN ALL THESE APPEALS, THEREFORE, THESE WERE HEARD TOGETHER AND A RE BEING DISPOSED OF BY THIS COMMON ORDER. ITA NO. 286/PN/2013 (AJITKUMAR POPATLAL SHAH) : 2. THE ONLY EFFECTIVE GROUND RAISED BY THE ASSESSEE READS AS UNDER: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD.CIT(A) ERRED IN NOT ALLOWING DEDUCTION U/S.54EC O F I.T. ACT, 1961 TO THE TUNE OF RS.50 LAKHS AS CLAIMED BY THE ASSESSEE. 2.1 FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSES SEE IS AN INDIVIDUAL AND FILED HIS RETURN OF INCOME ON 10-10-2011 DISCLO SING INCOME OF RS.21,32,710/-. DURING THE COURSE OF ASSESSMENT PR OCEEDINGS THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAS DISCL OSED INCOME FROM CAPITAL GAINS ON TRANSFER OF LAND AT BARAMATI. FRO M THE TRANSFER DOCUMENT HE NOTED THAT THERE ARE 3 CO-OWNERS VIZ., AJITKUMAR POPATLAL SHAH, KIRANKUMAR POPOTLAL SHAH AND SMT. SARIKA SANJ AYKUMAR SHAH. THE CO-OWNERS ARE FROM THE SAME FAMILY AND THE TOTA L CONSIDERATION INVOLVED IN THE TRANSFER IS RS.3,51,00,000/-. FROM THE COMPUTATION OF TOTAL INCOME OF THE ASSESSEE THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAS CLAIMED EXEMPTION OF RS.1 CRORE U/S. 5 4EC OF THE ACT. FROM THE REC BOND CERTIFICATES THE ASSESSING OFFICE R NOTED THAT THE ASSESSEE HAS INVESTED RS.50 LAKHS ON 30-11-2008 AND ANOTHER RS.50 3 LAKHS ON 30-04-209. HE, THEREFORE, ASKED THE ASSESS EE TO EXPLAIN AS TO WHY EXEMPTION U/S.54EC SHOULD NOT BE RESTRICTED ONL Y TO THE INVESTMENT MADE IN F.Y. 2008-09 SINCE THE TRANSFER OF THE CAPITAL ASSET TOOK PLACE IN F.Y. 2008-09 RELEVANT TO A.Y. 2009-10 IN RESPECT OF WHICH EXEMPTION IS BEING CLAIMED. THE ASSESSEE REP LIED THAT THE STATUTE HAS ONLY PUT A RESTRICTION ON THE QUANTUM O F INVESTMENT TO BE MADE DURING THE FINANCIAL YEAR AND NOT ON THE QUANT UM OF EXEMPTION WHICH CAN BE CLAIMED BY THE ASSESSEE. 3. HOWEVER THE ASSESSING OFFICER WAS NOT SATISFIED WITH THE EXPLANATION GIVEN BY THE ASSESSEE. HE NOTED THAT T HERE ARE 3 CO- OWNERS AND EACH CO-OWNER HAS INVESTED RS. 1 CRORE B Y INVESTING IN REC BONDS AMOUNTING TO RS.50 LAKHS EACH IN F.Y. 200 8-09 AND F.Y. 2009-10. THUS, OUT OF THE TOTAL AMOUNT OF RS.3,51, 00,000/- THEY ARE GETTING EXEMPTION OF RS.3 CRORES U/S.54EC. ACCORDI NG TO THE ASSESSING OFFICER, SUCH CLAIM DEFEATS THE VERY PURP OSE OF THE SECTION ENACTED IN THE STATUTE. SINCE THE TRANSFER WAS EFF ECTED IN F.Y. 2008-09, THEREFORE, THE ASSESSING OFFICER, FOLLOWING THE PRO VISIONS OF SECTION 54EC RESTRICTED THE EXEMPTION U/S.54EC AT RS.50 LAK HS AND DENIED THE EXEMPTION OF THE BALANCE RS.50 LAKHS. 4. IN APPEAL THE LD.CIT(A) DISTINGUISHING THE DECIS ION OF THE AHMEDABAD BENCH OF THE TRIBUNAL IN THE CASE OF SHRI ASPI GINWALA AND OTHERS VS. ACIT REPORTED IN 146 TTJ 385 AND FOL LOWING THE DECISION OF JAIPUR BENCH OF THE TRIBUNAL IN THE CAS E OF ACIT VS. SHRI RAJ KUMAR JAIN & SONS (HUF) REPORTED IN 50 SOT 213 HELD THAT THE ADMISSIBLE DEDUCTION U/S.54EC CANNOT EXCEED RS.50 L AKHS. HE 4 ACCORDINGLY UPHELD THE ACTION OF THE ASSESSING OFFI CER IN RESTRICTING THE DEDUCTION TO RS.50 LAKHS. 4.1 AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE ASS ESSEE IS IN APPEAL BEFORE US. 5. THE LD. COUNSEL FOR THE ASSESSEE AT THE OUTSET R EFERRED TO THE DECISION OF THE PANAJI BENCH OF ITAT IN THE CASE OF ITO VS. MS.RANIA FALEIRO REPORTED IN 142 ITD 21 AND SUBMITTED THAT THE TRIBUNAL IN THE SAID DECISION AFTER CONSIDERING THE DECISION OF THE JAIPUR BENCH OF THE TRIBUNAL IN THE CASE OF SHRI RAJ KUMAR JAIN & SONS (HUF) (SUPRA) HAS HELD THAT FOR CLAIMING DEDUCTION U/S.54EC THE A SSESSEE CAN MAKE INVESTMENT IN TWO DIFFERENT FINANCIAL YEARS PROVIDE D THAT THE INVESTMENT MADE DID NOT EXCEED RS.50 LAKHS IN A FIN ANCIAL YEAR. REFERRING TO THE DECISION OF THE BANGALORE BENCH OF THE TRIBUNAL IN THE CASE OF SHRI VIVEK JAIRAZBHOY VS. DCIT IN ITA NO.236/BANG/2012 ORDER DATED 14-12-2012 HE SUBMITTE D THAT THE TRIBUNAL IN THE SAID DECISION HAS ALSO HELD THAT AS SESSEE IS ENTITLED TO TOTAL DEDUCTION U/S.54EC OF THE ACT SPREAD OVER A P ERIOD OF 2 FINANCIAL YEARS @RS.50 LAKHS EACH ON INVESTMENTS MADE IN SPEC IFIED INSTRUMENTS WITHIN A PERIOD OF 6 MONTHS FROM THE DA TE OF SALE OF THE PROPERTY. HE ALSO RELIED ON THE DECISION OF THE AH MEDABAD BENCH OF THE TRIBUNAL IN THE CASE OF SHRI ASPI GINWALA VS. A CIT VIDE ITA NO.3226/AHD/2011 ORDER DATED 30-03-2012 FOR A.Y. 20 08-09 AND THE CHENNAI BENCH OF THE TRIBUNAL IN THE CASE OF SMT. S RIRAM INDUBAL VS. ITO VIDE ITA NO.1950/MDS/2012 ORDER DATED 30-01-201 3 FOR A.Y. 2008-09 AND M/S. COROMANDEL INDUSTRIES PVT. LTD. VS . ACIT VIDE ITA 5 NO.411/MDS/2013 ORDER DATED 25-06-2013 FOR A.Y. 200 9-10. REFERRING TO THE DECISION OF THE HONBLE SUPREME CO URT IN THE CASE OF CIT VS. VEGETABLE PRODUCTS LTD. REPORTED IN 88 ITR 192 HE SUBMITTED THAT WHEN TWO VIEWS ARE POSSIBLE THE VIEW WHICH IS FAVOURABLE TO THE ASSESSEE SHOULD BE ACCEPTED. HE ACCORDINGLY SUBMIT TED THAT THE CLAIM OF THE ASSESSEE SHOULD BE ALLOWED. 6. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAND HEAVILY RELIED ON THE ORDER OF THE CIT(A). 7. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY B OTH THE SIDES, PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAV E ALSO CONSIDERED THE VARIOUS DECISIONS RELIED ON BY BOTH THE SIDES. THE ONLY DISPUTE TO BE DECIDED IN THE INSTANT CASE IS AS TO WHETHER THE ASSESSEE IS ENTITLED TO DEDUCTION U/S.54EC ON ACCOUNT OF INVESTMENT OF R S.50 LAKHS EACH IN TWO FINANCIAL YEARS WHICH OTHERWISE WERE INVESTE D WITHIN A PERIOD OF 6 MONTHS FROM THE DATE OF TRANSFER OF THE CAPITA L ASSET. WE FIND THE CIT(A) UPHELD THE ACTION OF THE ASSESSING OFFICER B Y FOLLOWING THE DECISION OF THE JAIPUR BENCH OF THE TRIBUNAL IN THE CASE OF SHRI RAJ KUMAR JAIN & SONS (HUF) (SUPRA). HOWEVER, WE FIND THE PANAJI BENCH OF THE TRIBUNAL AND THE BANGALORE BENCH OF TH E TRIBUNAL AFTER CONSIDERING THE DECISION OF JAIPUR BENCH OF THE TRI BUNLA IN THE CASE OF SHRI RAJ KUMAR JAIN & SONS (HUF) (SUPRA) HAS HELD T HAT FOR CLAIMING DEDUCTION U/S.54EC THE ASSESSEE CAN MAKE INVESTMENT IN 2 DIFFERENT FINANCIAL YEARS PROVIDED IN A FINANCIAL YEAR THE IN VESTMENT MADE DID NOT EXCEED RS.50 LAKHS. 6 7.1 WE FIND THE PANAJI BENCH OF THE TRIBUNAL AFTER CONSIDERING VARIOUS DECISIONS INCLUDING THE DECISION OF THE JAI PUR BENCH OF THE TRIBUNAL IN THE CASE OF SHRI RAJ KUMAR JAIN & SONS (HUF) (SUPRA) HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE AND DISMISSED THE APPEAL FILED BY THE REVENUE BY HOLDING AS UNDER : 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY C ONSIDERED THE SAME. WE NOTED THAT THIS ISSUE IS DULY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE BANGALORE BENCH IN CASE O F VIVEK JAIRAZBHOY VS. DY. COMMISSIONER OF INCOME- TAX, ITA NO . 236/BANG/2012 AND AHMEDABAD BENCH IN THE CASE OF ASPI GINWALA, SHREE RAM ENGG. & MFG. INDUSTRIES VS. ASST. COMMISSIONER O F INCOME- TAX, 20 TAXMANN.COM 75 (AHD.). IN THE CASE OF ASPI GI NWALA, THE CO- ORDINATE BENCH HAS HELD AS UNDER : '7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RE CORDS AND FIND THAT THE ASSESSEE AND HIS BROTHER SHRI RUSTOM GINWALA SOLD A PROPERTY ON 22-10-2007FOR RS.6.21 CRORES. THE ASSESSEE AND HIS BROT HER HAD 50% SHARE IN THIS PROPERTY. THE ASSESSEE MADE INVESTMENT O F RS. 50 LAKHS ON 31 12-2008 IN REC BONDS AND RS. 50 LAKHS ON 2 6-05-2008 IN NHAI BONDS AND CLAIMED EXEMPTION OF RS. 1 CRORE U/S 54 EC OF THE ACT. THE INVESTMENT IN REC BONDS WAS ALLOWED BY THE AO AS IT WAS WITHIN THE TIME LIMIT OF SIX MONTHS PRESCRIBED IN SECTION 54EC OF THE ACT, WHILE THE INVESTMENT IN NHAI BONDS WHICH WAS MADE ONLY ON 26-05- 2008 WAS NOT ALLOWED AS ACCORDING TO THE LOWER AUTHOR ITIES THE ASSESSEE IS ONLY ENTITLED FOR EXEMPTION U/S 54EC UPTO RS. 50 LAKHS ONLY. THE ASSESSEE'S CASE, HOWEVER, IS THAT AS PER THE PROV ISO TO SECTION 54EC, INVESTMENT MADE ON OR AFTER 1ST APRIL, 2007 IN THE LONG TERM SPECIFIED ASSET BY AN ASSESSEE DURING ANY FINANCIAL YEAR SHOULD NOT EXCEED RS. 50 LAKHS. THE ASSESSEE'S CASE IS THAT SINCE THE PR OPERTY WAS SOLD ON 22-10-2007 HE COULD HAVE INVESTED IN ELIGIBLE INVESTMENT WITHIN SIX MONTHS I.E. ON OR BEFORE 21-04-2008 IN ORD ER TO AVAIL EXEMPTION U/S 54EC OF THE ACT. THERE IS NO DISPUTE ABO UT RS. 50 LAKHS INVESTED ON 31-122007 IN REC BONDS. THE DISPUTE IS ONLY ABOUT FURTHER INVESTMENT OF RS. 50 LAKHS IN NHAI BONDS MADE O N 26-05- 2008. SINCE SIX MONTHS IN THIS CASE INVOLVES TWO FINANC IAL YEARS, THE ASSESSEE'S CASE IS THAT IF HE HAD DEPOSITED ANOTHER RS. 50 L AKHS FROM 1 ST APRIL, 2008 TO 21-04-2008, HE WAS ENTITLED FOR EXEMP TION U/S 54EC OF THE ACT. AS DURING THIS PERIOD FROM 01-04-2008 TO 26- 05-2008 SUBSCRIPTION IN ELIGIBLE INVESTMENT WAS CLOSED, THE INVE STMENT MADE BY THE ASSESSEE ON 26-05-2008 I.E. 1ST DAY OF THE REOPEN ING OF THE SUBSCRIPTION OF ELIGIBLE INVESTMENT IN NHAI BONDS SHOULD BE TREATED IN TIME. THERE IS ALSO NO DISPUTE ABOUT THE FACT THAT SUBSC RIPTION TO THE ELIGIBLE INVESTMENT WAS CLOSED DURING THE PERIOD 01-04 -2008 TO 26- 05-2008. THE DISPUTE WHICH REMAINS TO BE DECIDED BY U S IN THIS CASE IS WHETHER AS PER THE PROVISIONS OF SECTION 54EC THE ASSESSEE IS ENTITLED FOR EXEMPTION OF RS. 1 CRORE AS SIX MONTHS PERIOD FOR I NVESTMENT IN ELIGIBLE INVESTMENT INVOLVES TWO FINANCIAL YEARS. IF T HE ANSWER TO THIS QUESTION IS 'YES', WHETHER INVESTMENT MADE BY THE ASSESSEE ON 26-05- 2008 BEYOND SIX MONTHS PERIOD IS ELIGIBLE FOR EXEMPTIO N IN VIEW OF THE 7 FACT THAT NO SUBSCRIPTION FOR ELIGIBLE INVESTMENT WAS A VAILABLE TO THE ASSESSEE FROM 1ST APRIL, 2008 TO 2605-2008. 8. WHILE GOING THROUGH THE PROVISO OF SECTION 54EC, W E 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 DUR ING ANY FINANCIAL YEAR DOES NOT EXCEED FIFTY LAKH RUPEE] ' IT IS CLEAR FROM THIS PROVISO THAT WHERE ASSESSEE TRANSF ERS HIS CAPITAL ASSET AFTER 30TH SEPTEMBER OF THE FINANCIAL YEAR HE G ETS AN OPPORTUNITY TO MAKE AN INVESTMENT OF RS. 50 LAKHS EACH IN TWO DIFF ERENT FINANCIAL YEARS AND IS ABLE TO CLAIM EXEMPTION UPTO RS. 1 CRORE U/S 54EC OF THE ACT. SINCE THE LANGUAGE OF THE PROVISO IS CLEAR AND U NAMBIGUOUS, WE HAVE NO HESITATION IN HOLDING THAT THE ASSESSEE IS ENTITL ED TO GET EXEMPTION UPTO RS. 1 CRORE IN THIS CASE. THIS VIEW OF O URS GETS SUPPORT FROM THE FOLLOWING FINDING OF THE HON'BLE SUPREME C OURT IN THE CASE OF IPCA LABORATORY LTD. V. DY. CIT[2004] 266 ITR 521 / 135 TAXMAN 594 (SC), WHEREIN IT HAS BEEN HELD BY THE HON 'BLE SUPRE ME COURT THAT 'EVEN THOUGH A LIBERAL INTERPRETATION HAS TO BE GIV EN TO SUCH A PROVISION THE INTERPRETATION HAS TO BE AS PER THE WORD ING OF THE SECTION. IF THE WORDING OF THE SECTION IS CLEAR, THEN BENEFITS WHICH ARE NOT AVAILABLE CANNOT BE CONFERRED BY IGNORING OR MI SINTERPRETING WORDS IN THE SECTION' HERE THE SITUATION IS REVERSE. SINCE THE WORDING OF T HE PROVISO TO SECTION 54EC IS CLEAR, THE BENEFITS WHICH ARE AVAILABL E TO THE ASSESSEE CANNOT BE DENIED. IN VIEW OF ABOVE, IT IS HEREBY HEL D THAT THE ASSESSEE IS ENTITLED FOR EXEMPTION OF RS. 1 CRORE AS SIX MONTHS' PERIOD FOR INVESTMENT IN ELIGIBLE INVESTMENTS INVOLVED IS TWO FINA NCIAL YEARS. 9. NOW, COMING TO THE SECOND ASPECT OF THE MATTER, WH ETHER INVESTMENT OF RS. 50 LAKHS MADE IN NHAI BONDS ON 26-05- 2008 CAN BE CONSIDERED TO BE MADE WITHIN SIX MONTHS PERIOD AS PER T HE PROVISO TO SEC. 54EC, WE FIND THAT THE ASSESSEE WAS TO MAKE INVESTMEN T IN SUCH BONDS BETWEEN 01-04-2008 TO 21-04-2008. THERE IS NO D ISPUTE ABOUT THE FACT THAT SUBSCRIPTION OF ELIGIBLE BONDS WAS CLOSED DURING THIS PERIOD TILL 26-05-2008 AND ON THE 1ST DAY OF THE REO PENING OF THE SUBSCRIPTION, THE ASSESSEE MADE THIS INVESTMENT. UNDER THE CIRCUMSTANCES, WE ARE OF THE CONSIDERED OPINION THAT T HE ASSESSEE WAS PREVENTED BY SUFFICIENT CAUSE WHICH WAS BEYOND HIS CONT ROL IN MAKING INVESTMENT IN THESE BONDS WITHIN THE TIME PRESCRIBED. W E FURTHER FIND THAT VARIOUS JUDICIAL AUTHORITIES HAVE TAKEN A VIEW T HAT EXEMPTION SHOULD BE GRANTED IN SUCH CASES WHERE THERE IS A DELAY I N MAKING INVESTMENT DUE TO NON AVAILABILITY OF THE BONDS AND H AVE HELD THAT IT IS A REASONABLE CAUSE AND THE EXEMPTION SHOULD BE GRANTED . IN THE CASE OF RAM AGANVAL V. JT. CIT [2002] 81ITD163 (MUM), IT HAS BEEN HELD AS UNDER: 'IN REGARD TO CLAIM OF EXEMPTION UNDER SECTION 54F W E MAY MENTION THAT IT IS FOUND BY THE LEARNED CIT(A) THAT THE BANK WAS CLOSED ON 31- 8-1995 ON ACCOUNT OF STRIKE AS CERTIFIED BY THE OFFIC IALS OF THE CONCERNED BANK. FROM THE CERTIFICATION GIVEN BY THE BANK OFFICIALS, THE ASSESSEE HAD APPROACHED THE BANK OFFICIALS WITH THE CHEQ UE FOR THE AMOUNT OF DEPOSIT ON 30-8-1995. THE ASSESSEE REMAINED UN ABLE TO OBTAIN RECEIPT ON 31-8-1995 DUE TO BANK STRIKE AND T HE CHEQUE WAS CLEARED ON 1-9-1995. IN THIS VIEW OF THE SITUATION, I T CAN WELL BE SAID 8 THAT THE DEPOSIT OF THE ASSESSEE WAS IN ACCORDANCE WITH T HE PROVISIONS OF STATUTE AS ON THE LAST DATE I.E. THE 31-8-1995, TH E DEPOSIT COULD NOT BE MADE DUE TO THE REASON WHICH WAS BEYOND THE CONTRO L OF THE ASSESSEE PARTICULARLY IN VIEW THAT THE EFFORTS WERE MADE BY THE ASSESSEE A DAY PRIOR TO LAST DATE TO DEPOSIT THE REQUISITE AMOUNT IN THE BANK TO MAKE HIM ENTITLE FOR EXEMPTION UNDER SEC 54F . AS MENTIONED EARLIER, THIS POSITION HAS ALSO BEEN ACCEPTED BY THE LE ARNED CIT(A). THEREFORE, WE DIRECT THE ASSESSING OFFICER TO ALLOW THE NECESSARY EXEMPTION TO THE ASSESSEE. BEFORE PARTING WE MAY OBSERVE THAT SECTION 54F IS A BE NEFICIAL PROVISION TO ENCOURAGE ASSESSEE TO INVEST IN HOUSE PROPERT IES, KEEPING IN MIND THE ABOVE OBJECT BEHIND THE INSERTIO N OF SECTION 54F AND CONSIDERING THE FACT THAT THE ASSESSEE WAS NOT AT FAU LT IN NOT DEPOSITING THE AMOUNT BEFORE 318-1995, WE HOLD THAT THE DEPOSIT MADE ON 1-9-1995 SATISFIES THE CONDITION LAID DOWN IN SECTION 54F OF THE ACT.'SINCE NO CONTRARY DECISION WAS CITED ON BEHA LF OF THE REVENUE, WE ARE LEFT WITH NO OPTION BUT TO HOLD THAT THE INV ESTMENTS MADE BY THE ASSESSEE ON 26-05-2008 BEYOND SIX MONTHS IS ELIGIBLE F OR EXEMPTION IN VIEW OF THE FACT THAT NO SUBSCRIPTION F OR ELIGIBLE INVESTMENT WAS AVAILABLE TO THE ASSESSEE FROM 1ST APRIL, 2008 TO 26- 05-2008. 10. IN THE RESULT, BOTH THE APPEALS ARE ALLOWED.' 4. WE HAVE ALSO NOTED THAT SUBSEQUENTLY, A CONTRARY VI EW HAS BEEN TAKEN BY JAIPUR BENCH IN ASST. COMMISSIONER OF INCOME-T AX VS. RAJ KUMAR JAIN & SONS (HUF), 19 TAXMANN.COM 27 (JP.). SU BSEQUENT TO THAT DECISION, THE BANGALORE BENCH IN THE CASE OF VIV EK JAIRAZBHOY VS. DY. COMMISSIONER OF INCOME-TAX VIDE ORDER DTD. 14.12. 2012 TOOK VIEW IN FAVOUR OF THE ASSESSEE. FROM THE PROVISIONS OF SEC. 54 EC WE NOTED THAT THE LIMIT OF RS. 50,00,000/- AS GIVEN UNDER THE PROVISO IS PER PERSON PER FINANCIAL YEAR. THE PLAIN READING OF THE SECTION AS WELL AS THE PROVISO CLEARLY SUGGESTS THE SAME INTERPRETATION. TH ERE IS NO AMBIGUITY IN THE INTERPRETATION. HAD THERE BEEN AN INTENTION OF THE LEGISLATURE TO RESTRICT THE EXEMPTION TO RS.50,00,000/ -, THE LEGISLATURE WOULD HAVE PROVIDED THE EMBARGO IN THIS REGARD. REST RICTION RELATES ONLY TO THE INVESTMENT MADE IN ANY FINANCIAL YEAR BY THE ASSESSEE. MAKING OF THE INVESTMENT IS A CONDITION FOR AVAILING OF THE EXEMPTION. CONDITION FOR AVAILING OF THE EXEMPTION REQUIRES THA T THE INVESTMENT CAN BE MADE WITHIN A PERIOD OF 6 MONTHS. IF 6 MONTHS FALLS WITHIN A DIFFERENT FINANCIAL YEAR, AS HAS HAPPENED IN THIS CASE , IN OUR OPINION, THIS TRIBUNAL CANNOT ADD THE EMBARGO THAT THE ASSESSEE C ANNOT MAKE THE INVESTMENT TO AVAIL OF THE EXEMPTION UNDER SECTI ON 54EC IN THE DIFFERENT FINANCIAL YEAR IF HE HAD ALREADY MADE THE INVESTMENT IN THE FINANCIAL YEAR IN WHICH THE CAPITAL ASSET IS TRANSFERRE D. IN OUR OPINION, THE LANGUAGE OF SECTION 54EC IS CLEAR AND UNAMBIGUOU S AND IT LEADS TO THE INTERPRETATION THAT THE ASSESSEE CAN MAKE THE INVEST MENT IN TWO DIFFERENT FINANCIAL YEARS PROVIDED IN A FINANCIAL YE AR THE INVESTMENT MADE DID NOT EXCEED RS.50,00,000/-. WE HAVE ALSO GONE THROUGH THE CIRCULAR NO. 3/2008 DTD. 12.3.2008 ISSUED BY THE CBDT BEING AN EXPLANATORY NOTE ON THE PROVISIONS RELATING TO DIRECT TAXES IN FINANCE ACT, 2007. IN PARA 28.2 THEREOF THE REASON FOR IT TO SET THE LIMIT ON THE QUANTUM OF THE INVESTMENT BY A PERSON IN A FINANCIAL YEAR ARE GIVEN AS UNDER : '28.2 THE QUANTUM OF INVESTIBLE BONDS ISSUED BY NHAI AN D REC BEING LIMITED, IT WAS FELT NECESSARY TO ENSURE THAT THE BENEF IT WAS AVAILABLE TO ALL THE INVESTORS. FOR THIS PURPOSE, IT WAS NECESSARY T O ENSURE THAT 9 THE LIMITED NUMBER OF BONDS AVAILABLE FOR SUBSCRIPTION IS ALSO AVAILABLE FOR SMALL INVESTORS. THEREFORE, WITH A VIEW TO ENSURE EQUITABLE DISTRIBUTION OF BENEFITS AMONGST PROSPECTIVE INVESTORS, THE GOVERNMENT DECIDED TO IMPOSE A CEILING ON THE QUANTU M OF INVESTMENT THAT COULD BE MADE IN SUCH BONDS. ACCORDINGLY, THE SAI D SECTION HAS BEEN AMENDED SO AS TO PROVIDE FOR A CEILING EXEMPTIO N UNDER SECTION 54EC, ON OR AFTER 1ST DAY OF APRIL, 2007 WILL NOT EX CEED FIFTY LAKH RUPEES IN A FINANCIAL YEAR. ' FROM THIS CIRCULAR ALSO, IT IS APPARENT THAT THE GOV ERNMENT ONLY INTENDED TO RESTRICT THE INVESTMENT IN A PARTICULAR F INANCIAL YEAR AND ACCORDINGLY HAS FIXED THE LIMIT OF RS. 50,00,000/- AS PERMISSIBLE LIMIT IN A PARTICULAR FINANCIAL YEAR. THE GOVERNMENT DID NOT INTEND TO RESTRICT THE MAXIMUM AMOUNT OF EXEMPTION PERMISSIBLE U NDER SECTION 54EC. LEGISLATURE IN OUR OPINION HAS CONSCIOUSLY USED T HE WORDS 'IN A FINANCIAL YEAR' IN THE PROVISO TO SEC. 54EC OF THE A CT. IF THE LEGISLATURE WANTED TO RESTRICT THE EXEMPTION ITSELF TO RS. 50,00,0 00/-, IT COULD HAVE SIMPLY DISPENSED WITH USING THE WORDS IN A FINANC IAL YEAR. THE HON'BLE SUPREME COURT WHILE DECIDING THE CASE OF VI KRANT TYRES LTD. VS. FIRST ITO, 274 ITR 821 LAID DOWN LAW OF INTERPRET ATION OF THE STATUTE BY HOLDING THEREIN AS UNDER : 'IT IS SETTLED PRINCIPLE OF LAW THAT THE COURTS WHILE CONSTRUING REVENUE ACTS HAVE TO GIVE A FAIR AND REASONABLE CONSTRUCTION T O THE LANGUAGE OF A STATUTE WITHOUT LEANING TO ONE SIDE OR THE OTHER, M EANING THEREBY THAT NO TAX OR LEVY CAN BE IMPOSED ON A SUBJECT BY AN ACT OF PARLIAMENT WITHOUT THE WORDS OF THE STATUTE CLEARLY SHOWING AN IN TENTION TO LAY THE BURDEN ON THE SUBJECT. IN THIS PROCESS, THE COURTS MUST ADHERE TO THE WORDS OF THE STATUTE AND THE SO CALLED EQUITABLE C ONSTRUCTION OF THOSE WORDS OF THE STATUTE IS NOT PERMISSIBLE. THE TASK OF THE COURT IS TO CONSTRUE THE PROVISIONS OF THE TAXING ENACTMENTS AC CORDING TO THE ORDINARY AND NATURAL MEANING OF THE LANGUAGE USED AN D THEN TO APPLY THAT MEANING TO THE FACTS OF THE CASE AND IN THAT PRO CESS IF THE TAX PAYER IS BROUGHT WITHIN THE NET HE IS CAUGHT, OTHERWI SE HE HAS TO GO FREE. ' EVEN IN THE CASE OF CIT VS. VEGETABLE PRODUCTS LTD., 8 8 ITR 192 THE HON'BLE SUPREME COURT HAS TAKEN VIEW THAT IF THERE A RE TWO VIEWS POSSIBLE, THE VIEW FAVOURABLE TO THE SUBJECT SHOULD BE TAKEN. IN VIEW OF THE AFORESAID DISCUSSION, WE ARE OF THE VIEW THAT NO IN TERFERENCE IS CALLED FOR IN THE ORDER OF CIT(A) AND CIT(A) HAS RIG HTLY DELETED THE ADDITION MADE BY THE ASSESSING OFFICER. WE, ACCORDINGLY , DISMISS THE APPEAL FILED BY THE REVENUE. IN THE RESULT, THE APPEAL FILED BY THE REVENUE STANDS DISMISSED. 7.2 RESPECTFULLY FOLLOWING THE DECISION OF THE PANA JI BENCH OF THE TRIBUNAL IN THE CASE OF SHRI RAJ KUMAR JAIN & SONS (HUF) (SUPRA) WHICH HAS CONSIDERED THE DECISION OF THE JAIPUR BEN CH OF THE TRIBUNAL RELIED ON BY THE LD. CIT(A) AND IN ABSENCE OF ANY C ONTRARY MATERIAL BROUGHT TO OUR NOTICE WE HOLD THAT THE ASSESSEE IS ENTITLED TO DEDUCTION 10 U/S.54EC FOR THE AMOUNT OF RS.50 LAKHS EACH INVESTE D IN TWO DIFFERENT FINANCIAL YEARS WHICH OTHERWISE ARE INVESTED WITHIN A PERIOD OF 6 MONTHS FROM THE DATE OF SALE OF THE CAPITAL ASSET. WE ACCORDINGLY SET- ASIDE THE ORDER OF THE CIT(A) AND DIRECT THE ASSESS ING OFFICER TO ALLOW THE CLAIM OF DEDUCTION U/S.54EC MADE BY THE ASSESSE E. THE GROUND RAISED BY THE ASSESSEE IS ACCORDINGLY ALLOWED. ITA NO.285/PN/2013 (KIRANKUMAR POPATLAL SHAH) & ITA NO.287/PN/2013 (SARIKA SANJAYKUMAR SHAH) : 8. AFTER HEARING BOTH THE SIDES, WE FIND IDENTICAL GROUNDS HAVE BEEN RAISED BY THE ABOVE ASSESSEES BEING CO-OWNERS. WE HAVE ALREADY DECIDED THE ISSUE IN ITA NO.286/PN/2013 IN FAVOUR O F THE ASSESSEE. FOLLOWING THE SAME RATIO, THE GROUNDS RAISED BY THE RESPECTIVE ASSESSEES IN THE ABOVE APPEALS ARE ALSO ALLOWED. 9. IN THE RESULT, ALL THE ABOVE APPEALS FILED BY TH E RESPECTIVE ASSESSEES ARE ALLOWED. PRONOUNCED IN THE OPEN COURT ON 31-01-2014. SD/- SD/- (R.S. PADVEKAR) (R.K. PANDA) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE, DATED : 31 ST JANUARY 2014 SATISH COPY OF THE ORDER IS FORWARDED TO : 1. THE ASSESSEE 2. THE DEPARTMENT 3. THE CIT(A)-III, PUNE 4. THE CIT-III, PUNE 5. D.R. B BENCH, PUNE 6. GUARD FILE BY ORDER // TRUE COPY // SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, PUNE