Shri Aspi Ginwala, Baroda V. The ACIT.,Circle-5, Baroda

ITA 3226/AHD/2011

• Counselvise Citation: 322620514 RSA 2011
• Duration Of Justice: 3 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-03-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2008-2009
• Appeal Filed On: 22-12-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S P TALATI
• Assessee Lawyers: S N SOPARKAR
• Keywords: Capital asset; Cost of acquisition; Reasonable cause
• Section: 54F; 133(6); 54

Judgement Text

-1- IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH 'C' BEFORE SHRI D K TYAGI - JM AND SHRI A MOHAN ALANKAMONY - AM ITA NO.3226/AHD/2011 (ASSESSMENT YEAR:-2008-09) SHRI ASPI GINWALA, SHREE RAM ENGG. & MFG. INDUSTRIES, OPP. NARSINH ESTATE, PRATAPNAGAR, BARODA-390 004 V/S THE ASST. COMMISSIONER OF INCOME-TAX, CIRCLE-5, BARODA PAN: ABCPG 5584 A [APPELLANT] [RESPONDENT] ITA NO.3227/AHD/2011 (ASSESSMENT YEAR:-2008-09) SHRI RUSTOM GINWALA, SHREE RAM ENGG. & MFG. INDUSTRIES, OPP. NARSINH ESTATE, PRATAPNAGAR, BARODA-390 004 V/S THE ASST. COMMISSIONER OF INCOME-TAX, CIRCLE-5, BARODA PAN: ABLPG 0622 J [APPELLANT] [RESPONDENT] ASSESSEES BY :- SHRI S N SOPARKAR, AR REVENUE BY:- SHRI S P TALATI, SR. DR DATE OF HEARING:- 23-02-2012 DATE OF PRONOUNCEMENT:- 30-03-2012 O R D E R PER D K TYAGI (JM) :- THESE TWO APPEALS HAVE BEEN BY TWO DIFFERENT ASSESSEES AGAINST TWO SEPARATE ORDERS 09- 11-2011 AND 11-11-2011 PASSED BY THE LEARNED CIT(A)-V, BARODA F OR ASSESSMENT YEAR 2008-09. 2 2 SINCE ISSUES INVOLVED IN THESE TWO APPEALS ARE CO MMON, THE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS CONSOLIDATED ORDER. THE COMMON GROUNDS WHICH ARE ID ENTICAL IN BOTH THE APPEALS, READ AS UNDER:- [1] THE LEARNED C.I.T. (APPEALS) HAS ERRED IN LAW A ND ON FACTS IN ABOVE CASE IN CONFIRMING THE ORDER OF LEARNED A.O. OF ASSESSING THE LONG TERM CAPITAL GAIN AT RS.1,80,32,450/- AS A GAINST RS.1,30,32,450/- RETURNED BY THE APPELLANT. [2] THE APPELLANT MOST HUMBLY SUBMITS THAT ON THE F ACTS AND THE CIRCUMSTANCES OF HIS CASE & IN LAW, THE ADDITION/DI SALLOWANCE MADE BY LEARNED A.O. IS ERRONEOUS AND PRAYS THAT HO N'BLE TRIBUNAL BE PLEASED TO HOLD SO NOW AND DELETE THE S AME. [3] THE LEARNED CIT (APPEALS) HAS ERRED IN LAW AND ON THE FACTS OF THE APPELLANT'S CASE IN CONFIRMING THE ORDER OF THE LD. AO OF ALLOWING DEDUCTION U/S 54EC OF THE ACT AT RS.50,00, 000/-, INSTEAD OF RS.1,00,00,000/- CLAIMED BY THE APPELLAN T ON THE ERRONEOUS PLEA THAT THE INVESTMENT OF RS.50,00,000/ - MADE BY THE APPELLANT IS BEYOND THE TIME LIMIT PRESCRIBED U /S 54EC OF THE ACT. [4] THE APPELLANT MOST HUMBLY SUBMITS THAT ON THE F ACTS AND THE CIRCUMSTANCES OF HIS CASE & IN LAW, THE DISALLOWANC ES MADE BY LEARNED A.O. IS ERRONEOUS AND PRAYS THAT HON'BLE BE PLEASED TO HOLD SO NOW AND GRANT THE DEDUCTION AS CLAIMED. [3] THE APPELLANT CRAVES LEAVE TO ADD, TO ALTER AND /OR AMEND THE GROUNDS OF APPEAL HEREIN ABOVE TAKEN. 3 GROUND NOS.1 AND 2 ARE INTER-CONNECTED AND THEREF ORE BOTH ARE DECIDED TOGETHER AS UNDER. SINCE THE FACTS INVO LVED IN BOTH THE GROUNDS ARE SIMILAR, WE ARE CONSIDERING THE FAC TS IN THE CASE OF SHRI ASPI GINWALA IN ITA NO.3226AHD/2011. THE FA CTS OF THE 3 CASE WHICH ARE CLEAR FROM THE SUBMISSIONS OF THE AS SESSEE BEFORE THE LEARNED CIT(A) WHICH READ AS UNDER:- 'THE APPELLANT HAS PREFERRED AN APPEAL BEFORE YOUR HONOUR AGAINST ORDER U/S 143 (3) OF THE ACT PASSED BY THE ASST. CO MMISSIONER OF INCOME TAX CIRCLE-5, BARODA (HEREINAFTER REFERRED T O AS 'LD. A.O.') FOR THE ABOVE-MENTIONED ASSESSMENT YEAR. IN CONNECT ION WITH THE SAID APPEAL THE APPELLANT CRAVES LIBERTY TO PLACE THE FO LLOWING SUBMISSIONS FOR YOUR HONOUR'S KIND CONSIDERATION, WITH A REQUES T TO CONSIDER THE SAME, WHILE FINALIZING THE SAME. THE FACTS LEADING TO THE GROUNDS OF APPEALS ARE AS UNDER: 1.1 THE APPELLANT IS AN INDIVIDUAL HAVING 'INCOME F ROM HOUSE PROPERTY', CAPITAL GAIN, OTHER SOURCES AND SHARE OF PROFIT FROM FIRMS'. 1.2 THE APPELLANT HAD FILED HIS RETURN OF INCOME FO R THE ASST. YEAR ON 11.11.2008 DISCLOSING TOTAL INCOME OF 1,06,89,01 0/-. 1.3 THE APPELLANT AND HIS BROTHER NAMELY RUSTOM GIN WALA HAD SOLD A HOUSE PROPERTY ON 22/10/2007 FOR ' 6.21 CRORE. IN THE SAID PROPERTY THE APPELLANT AND HIS BROTHER HAD 50% SHARE. THE AP PELLANT HAD MADE INVESTMENT OF ' 50 LACS,ON 31/12/2007 IN REC BONDS AND ' 50 LACS ON 26/5/2008 IN NHAI BONDS AND CLAIMED EXEMPTION OF ' 100 LACS U/S 54EC OF THE ACT. THE INVESTMENT IN REC BONDS WAS WI THIN TIME LIMIT OF 6 MONTHS PRESCRIBED IN SECTION 54EC OF THE ACT W HILE INVESTMENT IN NHAI HAS BEEN MADE ONLY ON 26/5/2008 (ALLOTMENT DAT E 31/5/2008) AS THE SUBSCRIPTION OF NEITHER OF THE SCHEME OPENED DU RING 1/4/2008 TO 26/5/2008. THE APPELLANT HAD MADE VERY SAME DAY THE SUBSCRIPTION OF FIRST SCHEME GOT OPENED. 1.4 THE RETURN OF INCOME INCLUDED THE 'INCOME FROM CAPITAL GAIN (LONG TERM)' OF ' 1,30,32,450/- EARNED ON SALE OF H OUSE PROPERTY (AFTER CLAIMING EXEMPTION U/S 54 EC OF ' 100 LIES F OR INVESTMENT MADE IN SPECIFIED BONDS). 1.5 THE ASSESSMENT HAS BEEN COMPLETED U/S. 143 (3) OF I.T. ACT, 1961 BY THE LD. A.O., VIDE ORDER DATED 15/12/2010. IN THE ASSESSMENT ORDER THE LD. A.O. HAS TAXED LONG TERM GAIN AT ' 1, 80,32,450/- 4 INSTEAD OF 1,30,32,450/- AND HAS DISALLOWED THE EXE MPTION OF X 50.00 LACS FOR INVESTMENT MADE IN NHAI BONDS ON 26/31-5-2 008, ON THE PLEA THAT THE EXEMPTION FOR SUCH INVESTMENT IS NOT AVAILABLE AS THE INVESTMENT HAS BEEN MADE IS BEYOND 6 MONTHS' TIME L IMIT PRESCRIBED IN SECTION 54EC OF THE ACT. 2.1 BOTH GROUND OF APPEALS RELATES TAXING INCOME FR OM CAPITAL GAIN AT 1,80,32,450/- AS AGAINST ' 1,30,32,450/- RET URNED BY THE APPELLANT AND DISALLOWING EXEMPTION OF ' 50 LACS CLAIMED U/S 54EC OF THE ACT. THE APPELLANT OBJECTS TO THE ACTION OF THE LD. A.O. ON THE FOLLOWING GROUNDS: 2.2 THE APPELLANT MOST HUMBLY SUBMITS THAT THAT THE INVESTMENT HAS BEEN MADE BY HIM IN THE PRESCRIBED SECURITIES IN DU E COMPLIANCE OF SECTION 54EC OF THE ACT AND THE EXEMPTION IS RIGHTL Y CLAIMED AND IS AVAILABLE. 2.3 AS FAR AS DELAY IN MAKING INVESTMENT IS CONCERN , THE APPELLANT MOST HUMBLY SUBMIT THAT THERE IS NO DELAY IN MAKING INVESTMENT ON HIS PART. SINCE NO ELIGIBLE SCHEME NOTIFIED IN THE SAID SECTION WAS AVAILABLE FOR SUBSCRIPTION BETWEEN 1/4/2008 TO 28/5/2008 HE WAS PREVENTED BY SUFFICIENT CAUSE IN NOT COMPLYING WITH THE TIME LIMIT PRESCRIBED IN SECTION 54EC. THE APPELLANT FURTHER S UBMIT THAT THE APPELLANT TOOK ALL THE STEP TO COMPLY WITH THE TIME LIMIT INCL. KEPT THE MONEY READY, INSTRUCTED THE HIS BROKER TO SUBSCRIBE THE FIRST AVAILABLE SCHEME AS SOON AS THE SCHEME STARTS SUBSCRIPTION FO R NEW FINANCIAL YEAR, REQUESTED THE ISSUER ETC. 2.4 AS STATED ABOVE AS THE APPELLANT HAD SOLD PROPE RTY ON 22/10/2007, HE WAS REQUIRED TO MAKE INVESTMENT WITH IN 6 MONTHS I.E. ON OR BEFORE 21/04/2008, IN ORDER TO AVAIL EXEMPTIO N U/S 54EC OF ACT. HOWEVER BOTH THE ELIGIBLE INVESTMENTS WERE CLOSED F OR SUBSCRIPTION FROM 31ST MARCH 2008 AND WERE REOPENED ONLY ON 26TH MAY 2008 FOR NHAI BONDS AND 28TH MAY 2008 FOR REC BONDS. THE APP ELLANT IS ATTACHING HEREWITH PROOF THAT NO BONDS WERE AVAILAB LE DURING 1/4/ 2008 TO 26/28 MAY 2008 A PERIOD WHICH FALLS WITHIN THE PERIOD OF 6 MONTHS IN ANNEXURE- 1. 2.5 AS FAR AS THE OBSERVATION OF THE LD. A.O. MADE IN PARA 6.5 OF THE ASST. ORDER AS UNDER: 5 'IN THIS REGARD RESPONSE WAS RECEIVED FROM NHAI WHI CH PROVIDE THAT THE ASSESSEE HAD MADE THE APPLICATION ON 28TH MAY 2008 AND THE DATE OF CLOSING OF SUBSCRIPTION WAS 31/03/2009 AND THE PERIOD OF IS SUE WAS 1 YEAR, DATE ON WHICH SUBSCRIPTION RE-OPENED WAS 11TH MAY 2009 AND THE COMMENCEMENT DATE OF ALLOTMENT AFTER RE-OPENING WAS 3 F* MAY 200 9. THEREFORE, THE WHOLE DISCUSSION OF TIME PERIOD AS WELL AS THE TIME LIMIT OF INVESTMENT SHOULD BE READ IN CONSONANCE SO THAT THE BENEFITS OF THESE PR OVISIONS SHOULD REACH EVERY ONE AND SHOULD NOT BE BENEFICIAL TO ONE AND D ETRIMENTAL TO OTHERS. ' THE APPELLANT MOST HUMBLY SUBMIT THAT THIS OBSERVAT ION IS TOTALLY OUT OF CONTEXT AS THE LD. A.O. SHOULD HAVE INQUIRED WHE THER THE SUBSCRIPTION TO ANY OF THE SCHEME WAS OPENED BETWEE N 1.4.2008 TO 26.5.2008 AS CLAIMED BY THE APPELLANT OR NOT? ON TH E CONTRARY THE APPELLANT HAS FURNISHED EVIDENCES (REFER ANNEXURE - 1) THAT SUBSCRIPTION TO BOTH SCHEME STOPPED ON 31/3/2008 AN D REOPENED ONLY ON 26/28TH MAY 2008 AND THE SAME IS NOT CONTRADICTE D BY THE LD. A.O AS THE SAME IS CONFIRMED BY REC IN REPLY OF THE NOT ICE U/S 133(6) OF THE ACT. THE COPY OF THE ENTIRE CORRESPONDENCE IN R ESPONSE TO NOTICE U/S 133(6) OF THE ACT IS ENCLOSED HEREWITH FOR YOUR HONOUR'S READY REFERENCE IN ANNEXGRE-2. THE APPELLANT FURTHER SUBM ITS THAT EVERY YEAR THE SUBSCRIPTION STOPS ON 31ST MARCH AND IT REOPENS IN SOMEWHERE IN MAY NEXT YEAR. THIS IS WAS ALSO CASE IN NEXT YEAR A ND THE SUBSCRIPTION REOPENED ONLY ON 11/5/2009 (AS OBSERVED BY THE LD. A.O. IN THE ASSESSMENT ORDER). 2.6 THE APPELLANT FURTHER SUBMITS THAT SINCE NEITHE R OF THE SPECIFIED BONDS WERE AVAILABLE FOR SUBSCRIPTION FROM 1ST APRI L 2008 TO 26TH/28TH MAY 2008, THE INVESTMENT MADE IMMEDIATELY ON THE RE OPENING OF THE SCHEME, SHOULD BE CONSIDERED WITHIN THE TIME LIMIT PRESCRIBED, AS THERE WAS NO DELAY ON THE PART OF THE APPELLANT, RATHER I T WAS IMPOSSIBLE FOR THE APPELLANT TO INVEST AFTER 1/4/2008 TILL LAST DA TE OF SPECIFIED PERIOD I.E. 21/4/2008 AS BOTH THE ELIGIBLE SCHEMES WERE CL OSED FOR THE SUBSCRIPTION. THE APPELLANT FURTHER SUBMITS THAT HE HAD KEPT THE FUND READY AND AS SOON AS THE SUBSCRIPTION OF ONE OF THE SCHEME OPENE D, HE HAS SUBSCRIBED TO IT. THE SUBSCRIPTION FOR NHAI BONDS O PENED ON 26/5/2008 AND THE APPLICATION WAS MADE ON SAME DAY I.E. ON 26/05/2008 ITSELF AND CHEQUE GOT CLEARED ON 28/05/0 8 (THE ALLOTMENT IS MADE ON 31/5/2008). THE COPY OF BANK STATEMENT ALON G WITH COUNTERFOIL OF THE INVESTMENT MADE IN ENCLOSED IN A NNEXURE- 3 FOR 6 YOUR HONOUR'S READY REFERENCE. THE APPELLANT FURTHE R SUBMITS THAT HE HAS MADE INVESTMENT ON SAME DAY THE SUBSCRIPTION OF ONE OF THE SCHEME GOT OPENED AND DIDN'T WAIT TILL THE SUBSCRIP TION OF OTHER SCHEME TO GET OPEN. 2.7 THE APPELLANT FURTHER SUBMITS THAT THIS IS A CA SE OF REAL HARDSHIP TO THE TAX PAYER. ONE SIDE THE ACT PROVIDES FOR EXE MPTION IF INVESTMENT IS MADE IN THE SPECIFIED ASSETS WITHIN A SPECIFIED PERIOD, HOWEVER ON THE OTHER SIDE THE SPECIFIED ASSETS WERE NOT AVAILA BLE FOR SUBSCRIPTION WITHIN THAT SPECIFIED PERIOD. IN A SITUATION ANY PE RSON IS HELPLESS. IN SUCH SITUATION, THE APPELLANT MOST HUMBLY SUBMIT THAT HE IS ELIGIBLE FOR EXEMPTION FOR THE INVESTMENT MADE BEYOND TIME L IMIT, AS HE WAS PREVENTED BY SUFFICIENT CAUSE WHICH WAS BEYOND HIS CONTROL. THE APPELLANT MOST HUMBLY SUBMIT THAT THE HON'BLE C.B.D .T. IN PAST IN SIMILAR CIRCUMSTANCES HAS TAKEN A BROAD VIEW AND HA S DIRECTED THAT THE PERIOD OF INVESTMENT NEEDS TO BE EXTENDED. THE HON' BLE C.B.D.T. HAD ISSUED A PRESS NOTE F.NO.142/09/2006 DATED 30 JUNE, 2006 EXTENDING THE TIME LIMIT. THE RELEVANT PARA OF THE SAID NOTE IS REPRODUCED BELOW FOR YOUR READY REFERENCE: '5. IT HAS BEEN BROUGHT TO THE NOTICE OF THE CENTRA L BOARD OF DIRECT TAXES THAT SOME PERSONS COULD NOT AVAIL OF THE BENEFIT UN DER SECTION 54EC OF THE INCOME TAX ACT ON ACCOUNT OF NON-AVAILABILITY OF TH E CAPITAL GAIN BONDS. FURTHER, FOR SOME OTHER PERSONS THE EFFECTIVE TIME AVAILABLE FOR MAKING THE INVESTMENT IS LESS THAN SIX MONTHS BECAUSE OF NON-A VAILABILITY OF THESE BONDS. 6. WITH A VIEW TO REMOVING THE HARDSHIP CAUSED TO T HE TAXPAYERS, THE CENTRAL BOARD OF DIRECT TAXES, IN EXERCISE OF POWER S CONFERRED BY CLAUSE (C) OF SUB SECTION (2) OF SEC. 119, HEREBY ORDERS T HAT THE LIMITATION OF SIX MONTHS FOR MAKING THE INVESTMENT UNDER SECTION 54EC OF CAPITAL GAINS ARISING FROM THE TRANSFER OF A LONG-TERM CAPITAL AS SETS, IS EXTENDED- ' SINCE, THE FACTS AND CIRCUMSTANCES OF THE APPELLANT 'S MATTER ARE SAME, THE BENEFIT OF BENEVOLENT CIRCULAR / NOTIFICATION / PRESS NOTE, NEEDS TO BE EXTENDED TO ALL SUCH CASES WHERE THE ASSESSEE AR E PREVENTED TO MAKE INVESTMENT IN THE SPECIFIED ASSETS WITHIN SPECIFIED PERIOD FOR NON- AVAILABILITY OF BONDS FOR SUBSCRIPTION DURING SUCH PERIOD. 2.08 THE APPELLANT ALSO SUBMIT THAT VARIOUS JUDICIA L AUTHORITIES HAVE TAKEN UNANIMOUS VIEW THAT THE EXEMPTION SHOULD BE G RANTED IN SUCH CASES WHERE THERE IS A DELAY IN MAKING INVESTMENT D UE TO NON- 7 AVAILABILITY OF THE BONDS AND HAVE HELD THAT IT IS A REASONABLE CAUSE AND THE EXEMPTION SHOULD BE GRANTED. THE CITATIONS' AND THE GIST OF THE DECISIONS ARE AS UNDER: CELLO PLAST VS. DCIT 2010 TTOL 60 ITAT (MUM) IN THIS CASE THE TRIBUNAL HAS HELD THAT IT WAS AN I MPOSSIBLE TASK FOR THE ASSESSEE TO COMPLY WITH THE TIME PERIOD LAID DOWN U /S 54EC. THE DELAY IN PURCHASE DUE TO NON-AVAILABILITY OF THE BO NDS WAS HELD TO BE A REASONABLE CAUSE, AND THE ASSESSEE WAS HELD TO BE E NTITLED TO EXEMPTION U/S 54EC. THE TRIBUNAL HAS FOLLOWED THE D ECISION IN CASE OF RAM AGARWAL VS. JCIT 81 ITO 163 (MUM). IN THAT C ASE ON SIMILAR FACTS, IT HAD BEEN HELD BY THE TRIBUNAL, THAT THE A SSESSEE WAS ENTITLED TO CLAIM DEDUCTION U/S 54EC. THE RELEVANT PARAS FROM T HE SAID DECISIONS ARE REPRODUCED AS UNDER: CELLO PLAST VS. DCIT 2010 TTOU 60 IT AT (MUM) ' 10. THE ID. COUNSEL OF THE ASSESSEE REITERATED ITS CONTENTIONS RAISED BEFORE THE LOWER AUTHORITIES HERE BEFORE US. IT WAS FURTHER SUBMITTED THAT NO BONDS WERE AVAILABLE AT THE TIME OF FILING OF THE R ETURN. EVEN UPTO 31.12.2006, THE BONDS WERE NOT AVAILABLE. THE BONDS WERE AVAILABLE ONLY ON 22.1.2007. IMMEDIATELY AFTER FIVE DAYS I.E. 27.1.20 07 THE ASSESSEE APPLIED FOR PURCHASE OF BONDS AND ON 31.1.2007 THE BONDS WE RE ALLOTTED TO THE ASSESSEE. THEREFORE, THIS WAS AN IMPOSSIBLE TASK TO THE ASSESSEE TO BUY THE BONDS WITHIN THE SPECIFIED TIME AS THE BONDS WERE N OT AVAILABLE. RELIANCE WAS PLACED ON THE DECISION OF THE TRIBUNAL REPORTED IN 81 ITD 163. ATTENTION OF THE BENCH WAS DRAWN ON PARAS 15 TO 20 OF THE ORDER OF THE TRIBUNAL WHERE IN SIMILAR CIRCUMSTANCES, THE CLAIM OF DEDUCTION U/S 54F WAS ALLOWED. ON THE OTHER HAND, THE ID. DR PLACED R ELIANCE ON THE ORDER OF THE CIT(A). 11. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CONSIDE R THEM CAREFULLY. AFTER TAKING INTO CONSIDERATION ALL THE FACTS AND M ATERIAL ON RECORD, WE FIND THAT THE ASSESSEE DESERVES TO SUCCEED IN THIS GROUN D ALSO. THERE IS NO DISPUTE THAT ASSESSEE HAS SOLD ITS CAPITAL ASSET I.E. PLANT AND MACHINERY DURING THE YEAR UNDER CONSIDERATION. FOR CLAIMING EXEMPTION U/ S 54EC, UPTO RS. 50 LAC HAS TO BE INVESTED IN THE PURCHASE OF SPECIFIED BON DS. THE ASSESSEE APPROACHED THE CONCERNED AUTHORITIES. HOWEVER, THE BONDS WERE NOT AVAILABLE. VARIOUS ENTITIES APPROACHED CBDT. TAKING INTO CONSIDERATION THE HARDSHIP FACED BY THE VARIOUS ENTITIES, THE CBDT VI DE CIRCULAR NO. 142/9/2006 TPL DATED 30.6.2006 EXTENDED THE TIME FO R PURCHASING THE SPECIFIED BONDS UPTO 31.12.2006. THE ASSESSEE APPRO ACHED THE APPROPRIATE 8 AUTHORITIES TO BUY THE BONDS; HOWEVER THEY WERE NOT AVAILABLE. THEREFORE, IT WAS AN IMPOSSIBLE TASK FOR THE ASSESSEE TO COMPLY W ITH THE CONDITIONS OF THE SEC. 54EC. THE ASSESSEE ULTIMATELY PURCHASED FDS OF RS.50 LACS WITH A VIEW TO BUY SPECIFIED BONDS WHENEVER THEY ARE AVAIL ABLE. LETTER WAS ISSUED TO THE SBI WHILE PURCHASING FDS OF RS.50 LACS THAT THE BONDS ARE NOT AVAILABLE IN THE MARKET AND THEREFORE, FD FOR AN IN ITIAL PERIOD OF 90 DAYS WHICH MAY BE EXTENDED FURTHER OR MAY BE REDEEMED PR IOR TO EXPIRY DATE FOR INVESTING THE SAME IN BONDS QUALIFIED U/S 54E &F TH E ACT. COPY OF THE LETTER DATED 30.10.2006 IS PLACED AT PAGE 6 OF THE COMPILA TION. COPIES OF THE FDS ARE PLACED AT PAGES 7 & 8 OF THE COMPILATION. COPIE S OF THE LETTERS ISSUED BY RURAL ELECTRICITY CORPN. LTD ALONG WITH THE COPY OF BOND CERTIFICATE IS PLACED AT PAGES 9 OF THE COMPILATION. IN THIS ALLOT MENT, IT IS CLARIFIED THAT THE ASSESSEE APPLIED FOR THE PURCHASE OF THE BONDS ON 2 7.1.2007 AND THEY ARE ALLOTTED ON 31.1.2007. 500 BONDS FOR A CONSIDERATIO N OF RS. 50 LACS WERE ALLOTTED. THE BOND CERTIFICATES IS ALSO PLACED AT P AGE 10 OF THE COMPILATION. 11.1 FROM THESE FACTS, IT IS CLEARLY ESTABLISHED TH AT THERE WAS REASONABLE CAUSE IN NOT PURCHASING THESE SPECIFIED BONDS WITHI N THE SPECIFIED TIME ALLOWED AS THEY WERE NOT AVAILABLE IN THE MARKET, A S SOON AS THE BONDS WERE AVAILABLE IN THE MARKET, THE ASSESSEE IMMEDIATELY P URCHASED THE SAME. THEREFORE IN OUR CONSIDERED VIEW, UNDER THESE CIRCU MSTANCES, THE ASSESSEE IS ENTITLED FOR THE EXEMPTION U/S 54EC. ' RAM -AGARWAL VS. JOINT CIT 81 ITD 163 (MUM) ' 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 C LOSED ON 31-8-1995 ON ACCOUNT OF STRIKE AS CERTIFIED BY THE OFFICIALS OF THE CONCERNED BANK. FROM THE CERTIFICATION GIVEN BY THE BANK OFFICIALS, THE ASSESSEE HAD APPROACHED THE BANK OFFICIALS WITH THE CHEQUE FOR THE AMOUNT OF DE POSIT ON 30-8-1995. THE ASSESSEE REMAINED UNABLE TO OBTAIN RECEIPT ON 31-8- 1995 DUE TO BANK STRIKE AND THE CHEQUE WAS CLEARED ON 1-9-1995. IN THIS VIE W OF THE SITUATION, IT CAN WELL BE SAID THAT THE DEPOSIT OF THE ASSESSEE WAS I N ACCORDANCE WITH THE PROVISIONS OF STATUTE AS ON THE LAST DATE I.E. THE 31-8-1995, THE DEPOSIT COULD NOT BE MADE DUE TO THE REASON WHICH WAS BEYOND THE CONTROL 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 BA NK TO MAKE HIM ENTITLE FOR EXEMPTION UNDER SEC 54F. AS MENTIONED EARLIER, THIS POSITION HAS ALSO BEEN ACCEPTED BY THE LEARNED CIT (A). THEREFORE, WE DIRE CT THE ASSESSING OFFICER TO ALLOW THE NECESSARY EXEMPTION TO THE ASSESSEE. BEFORE PARTING WE MAY OBSERVE THAT SECTION 54F IS A BENEFICIAL PROVISION TO ENCOURAGE ASSESSEE TO INVEST IN HOUSE PROPERTIES. K EEPING IN MIND THE ABOVE OBJECT BEHIND THE INSERTION OF SECTION 54F AND CONS IDERING THE FACT THAT THE 9 ASSESSEE WAS NOT AT FAULT IN NOT DEPOSITING THE AMO UNT BEFORE 31-8-1995, WE HOLD THAT THE DEPOSIT MADE ON 1-9-1995 SATISFIES TH E CONDITION LAID DOWN IN SECTION 54F OF THE ACT. ' THE APPELLANT ALSO SUBMIT THAT THERE ARE NO CONTRAR Y DECISIONS AS OF NOW TO THE BEST OF HIS KNOWLEDGE. 2.09 THE APPELLANT ALSO SUBMITS THAT THE ASSESSEE O FTEN COMES ACROSS SUCH TYPE OF SITUATIONS; MANY A TIME BANKS ARE CLOS ED OR GOVT. OFFICE HAS A HOLIDAY ON THE DUE DATE OF FILING APPEAL/RETU RN/REPLY, PAYMENT OF TAX ETC. BUT, IN ALL SUCH CASES, SECTION 10 OF THE GENERAL CLAUSES /ACT, 1897 COMES TO THE RESCUE. AS PER SAID SECTION IF LA ST DAY HAPPENS TO BE CLOSED, NEXT WORKING DAY IS THE LAST DATE. THE SAID SECTION IS REPRODUCED HEREWITH FOR YOUR READY REFERENCE. 'SEC. 10. COMPUTATION OF TIME.- (1) WHERE, BY ANY ( CENTRAL ACT) OR REGULATION MADE AFTER THE COMMENCEMENT OF THIS ACT, ANY ACT OR PROCEEDING IS DIRECTED TO ALLOWED TO BE DONE OR TAKEN IN ANY C OURT OR OFFICE ON A CERTAIN DAY OR WITHIN A PRESCRIBED PERIOD, THEN, IF THE COU RT OR OFFICE IS CLOSED ON THAT DAY OR THAT DAY OR THE LAST DAY OF THE PRESCRI BED PERIOD, THE ACT OR PROCEEDING SHALL BE CONSIDERED AS DONE OR TAKEN IN DUE TIME IF IT IS DONE OR TAKEN ON THE NEXT DAY AFTERWARDS ON WHICH THE COURT OR OFFICE IS OPEN. PROVIDED THAT NOTHING IS THIS SECTION SHALL APPLY T O ANY ACT OR PROCEEDING TO WHICH THE (INDIAN LIMITATION ACT, 1877 (15 OF 1877) , APPLIES. THIS SECTION APPLIES ALSO TO ALL (CENTRAL ACTS) AND REGULATIONS MADE ON OR AFTER THE FOURTEENTH DAY OF JANUARY, 1887.' THIS PROVISION IS APPLICABLE IN THE CASE OF THE APP ELLANT AS HE WAS PREVENTED TO MAKE INVESTMENT IN THE SPECIFIED ASSET S WITHIN SPECIFIED PERIOD DUE TO NON-AVAILABILITY OF BONDS FOR SUBSCRI PTION DURING SUCH PERIOD. 2.10 IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCE AN D THE DIRECT DECISIONS EXPLAINING THE LEGAL POSITIONS, THE APPEL LANT MOST HUMBLY SUBMIT THAT THE INVESTMENT MADE BY HIM IS WITHIN TH E SPECIFIED TIME AND HENCE THE EXEMPTION IS SQUARELY AVAILABLE AND H AVE TO REQUEST YOUR HONOUR TO HOLD SO NOW AND QUASH THE DISALLOWAN CE MADE. THE APPELLANT SHALL BE GRATEFUL IF THE ABOVE SUBMIS SIONS ARE CONSIDERED FAVOURABLY WHILE DISPOSING OF THE ABOVE APPEAL. FOR WHICH ACT OF GRACE, I SHALL REMAIN GRATEFUL.' 10 4 THE LEARNED CIT(A) HAS DEALT WITH THE ISSUES AS U NDER:- 5.2 I HAVE CONSIDERED THE FACTS OF THE CASE AS WEL L AS THE OBSERVATION OF THE AO AND THE ARGUMENTS ADVANCED BY THE AR. BEF ORE CONSIDERING THE ARGUMENTS OF THE APPELLANT, IT WILL BE WORTHWHI LE TO GO THROUGH THE PROVISIONS OF SECTION 54 EC OF THE I. T. ACT. PROVI SIONS OF SECTION 54 EC ARE REPRODUCED HEREUNDER: - '54EC (1) WHERE THE CAPITAL GAIN ARISES FROM THE TR ANSFER OF A LONG- TERM CAPITAL ASSET (THE CAPITAL ASSET SO TRANSFERRE D BEING HEREAFTER IN THIS SECTION REFERRED TO AS THE ORIGINAL ASSET) SO AND THE ASSESSEE HAS, AT ANY TIME WITHIN A PERIOD OF SIX MONTHS AFTER THE DA TE OF SUCH TRANSFER, INVESTED THE WHOLE OR ANY PART OF CAPITAL GAINS IN THE LONG-TERM SPECIFIED ASSET, THE CAPITAL GAIN SHALL BE DEALT WI TH IN ACCORDANCE WITH THE FOLLOWING PROVISIONS OF THIS SECTION, THAT IS T O SAY-, (A) IF THE COST OF THE LONG-TERM SPECIFIED ASSET IS NOT LESS THAN THE CAPITAL GAIN ARISING FROM THE TRANSFER OF THE O RIGINAL ASSET, THE WHOLE OF SUCH CAPITAL GAIN SHALL NOT BE CHARGED UND ER SECTION 45, (B) IF THE COST OF THE LONG-TERM SPECIFIED ASSET IS LESS THAN THE CAPITAL GAIN ARISING FROM THE TRANSFER OF THE ORIGI NAL ASSET, SO MUCH OF THE CAPITAL GAIN AS BEARS TO THE WHOLE OF THE CAPIT AL GAIN THE SAME PROPORTION AS THE COST OF ACQUISITION OF THE LONG-T ERM SPECIFIED ASSET BEARS TO THE WHOLE OF THE CAPITAL GAIN, SHALL NOT B E CHARGED UNDER SECTION 45: [PROVIDED THAT THE INVESTMENT MADE ON OR AFTER THE 1ST DAY OF APRIL 2007 IN THE LONG-TERM SPECIFIED ASSET BY AN ASSESSE E DURING ANY FINANCIAL YEAR DOES NOT EXCEED FIFTY LAKH RUPEE]'. IT IS CLEAR FROM THE PROVISO ABOVE THAT IT WAS THE INTENTION OF THE LEGISLATURE THAT BENEFIT UNDER SECTION 54 EC BE RES TRICTED TO RS.50 LAKH FOR AN ASSESSEE PER (ASSESSMENT) YEAR. HOWEVER, DUE TO PECULIAR DRAFTING OF THE PROVISO A SITUATION HAS ARISEN WHER E ASSESSEES WHO TRANSFER THEIR CAPITAL ASSET AFTER 30TH SEPTEMBER O F THE FINANCIAL YEAR GET AN OPPORTUNITY TO MAKE AN INVESTMENT OF 50 LAKH IN TWO DIFFERENT FINANCIAL YEARS AND ARE ABLE TO CLAIM AN EXEMPTION UP TO RS.1 CRORE UNDER SECTION 54 EC. AS PROVISIONS OF THE ACT HAVE TO BE INTERPRETED LITERALLY THERE IS NO OPTION BEFORE THE DEPARTMENT BUT TO PROVIDE 11 DEDUCTION OF RS.1 CRORE TO SOME OF THE ASSESSEES WH ILE THOSE TRANSFERRING CAPITAL ASSETS BEFORE 30TH SEPTEMBER A RE DEPRIVED OF THIS BENEFIT. CLEARLY, IT CANNOT BE THE INTENTION OF THE LEGISLATURE TO FAVOUR THE ASSESSEES TRANSFERRING ASSET AFTER THE 30TH SEP TEMBER BECAUSE IT WILL NOT ONLY BE DISCRIMINATORY, IT WILL BE ILLOGIC AL ALSO. THE APPELLANT, BY DEPOSITING RS.50 LAKH IN THE SPECIFIED ASSETS IN THE NEXT FINANCIAL YEAR IS TRYING TO CLAIM A DEDUCTION OF RS.1 CRORE, A BENEFIT WHICH IS NOT INTENDED BY THE LEGISLATURE. SINCE, SHE HAS NOT BEE N ABLE TO INVEST IN THE SPECIFIED ASSETS WITHIN SIX MONTHS AS PROVIDED IN SECTION 54 EC, SHE IS NOT ENTITLED TO ANY RELAXATION IN THE TIME P ERIOD OF SIX MONTHS BECAUSE SHE HAS ALREADY DEPOSITED RS.50 LAKH IN THE SPECIFIED ASSETS IN THE YEAR IN WHICH THE CAPITAL ASSET HAS BEEN TRANSF ERRED. THE CASE LAWS QUOTED BY THE APPELLANT ARE OF NO HELP BECAUSE FACT S IN THOSE CASES WERE ENTIRELY DIFFERENT. IN THOSE CASES THE APPELLA NTS WERE PREVENTED FROM TAKING BENEFIT OF EXPRESS PROVISIONS OF THE AC T AND THERE WAS NO CASE OF TAKING ADDITIONAL AND UNINTENDED BENEFIT. IT HAS BEEN HELD BY THE HONOURABLE HIGH COURT OF KE RALA IN THE CASE OF 252 ITR 513 (KER) C DHANAPALAN THAT A CONCESSION CA NNOT BE CLAIMED AS A MATTER OF RIGHT. ANY SCHEME EXTENDING CONCESSI ON HAS TO BE UNDERSTOOD STRICTLY IN TERMS OF THE SCHEME ONLY. IT HAS REFERRED TO CASE OF INTERNATIONAL COTTON CORPORATION (P) LTD 35 STC 1 (SC) WHICH WAS RENDERED IN CONTEXT THAT CONCESSION FOR DECLARED GO ODS SHOULD BE EXTENDED TO SOME OTHER COMPARABLE GOODS. THE SC FOU ND THAT THE COURTS DID NOT HAVE JURISDICTION TO DIRECT A SIMILA R CONCESSIONS TO OTHERS, SINCE THAT WOULD BE TANTAMOUNT TO LEGISLATI ON BY THE COURT, WHILE NO COURT HAS SUCH LEGISLATIVE POWER. SC HAS CONSISTENTLY HELD THAT INCENTIVE PROVISIONS WHICH CONFER CONCESSION, SHOULD BE INTERPRETED IN A LIBERAL MANN ER, SO AS TO SUBSERVE THE PURPOSE FOR WHICH THEY ARE INTENDED E.G. (I) 196 ITR 188(SC) - BAJAJ TEMPO LT (II) 177 ITR 418(50), 177 ITR 431 (SC) GENERAL RULE IS THAT THE PROVISIONS RELATING TO DED UCTIONS, ALLOWANCES AND EXEMPTIONS ARE EXPECTED TO BE INTERPRETED RIGID LY, INCENTIVE PROVISIONS ARE TO BE INTERPRETED DIFFERENTLY AS THE Y FORM AN EXCEPTION TO THE RULE. 12 IT HAS BEEN HELD BY THE HONOURABLE SUPREME COURT IN THE CASE OF 204 ITR 412 (SC) BUDHARAJA (N.C.) AND CO THAT 'THE PRIN CIPLE OF ADOPTING A LIBERAL INTERPRETATION WHICH ADVANCES THE PURPOSE A ND OBJECT OF BENEFICENT PROVISIONS CANNOT BE CARRIED TO THE EXTE NT OF DOING VIOLENCE TO THE PLAIN AND SIMPLE LANGUAGE USED IN THE ENACTM ENT. IT WOULD NOT BE REASONABLE OR PERMISSIBLE FOR THE COURT TO REWRI TE THE SECTION OR SUBSTITUTE WORDS OF ITS OWN FOR THE ACTUAL WORDS EM PLOYED BY THE LEGISLATURE IN THE NAME OF GIVING EFFECT TO THE SUP POSED UNDERLYING OBJECT. AFTER ALL, THE UNDERLYING OBJECT OF ANY PRO VISION HAS TO BE GATHERED ON A REASONABLE INTERPRETATION OF THE LANG UAGE EMPLOYED BY THE LEGISLATURE'. SIMILARLY, IN THE CASE OF IPCA LAB 266 ITR 521 (SC) IT HAS BEEN HELD BY HONOURABLE SUPREME COURT THAT 'EVEN THOUGH A LIB ERAL INTERPRETATION HAS TO BE GIVEN TO SUCH A PROVISION THE INTERPRETATION HAS TO' BE AS PER THE WORDING OF THE SECTION. IF THE WO RDING OF THE SECTION IS CLEAR, THEN BENEFITS WHICH ARE NOT AVAILABLE CANNOT BE CONFERRED BY IGNORING OR MISINTERPRETING WORDS IN THE SECTION'. SIMILARLY IN THE CASE OF 108 ITR 439 (SC) ALLADI KU PPUSWAMY IT HAS BEEN HELD BY THE HOB'BLE SC THAT 'IT IS TRUE THAT A FISCAL STATUTE SHOULD BE CONSTRUED STRICTLY SO AS TO GIVE EVERY BENEFIT O F DOUBT TO THE SUBJECT, BUT WHEN THE PHRASEOLOGY OF A PARTICULAR SECTION OF THE STATUTE TAKES WITHIN ITS SWEEP THE TRANSACTION WHICH IS TAXABLE, IT IS NOT FOR THE COURT TO STRAIN AND STRESS THE LANGUAGE OF THE SECTION SO AS TO ENABLE THE TAXPAYER TO ESCAPE THE TAX'. IN VIEW OF THE ABOVE POSITION OF THE LAW, I'M OF TH E OPINION THAT THE APPELLANT IS NOT ENTITLED TO ANY RELAXATION IN THE TIME LIMIT FOR MAKING AN ADDITIONAL INVESTMENT OF RS.50 LAKH UNDER SECTIO N 54 EC OF THE INCOME TAX ACT 1961 BECAUSE IT IS NOT ONLY AGAINST THE PROVISIONS OF SECTION 54 EC IT IS ALSO AGAINST THE SPIRIT OF PROV ISION INSERTED BELOW SUB SECTION (1) OF SECTION 54 EC REPRODUCED ABOVE. ORDER OF THE AO DENYING ADDITIONAL EXEMPTION OF RS.50 LAKH TO THE A PPELLANT IS THEREFORE CONFIRMED. 5 AGGRIEVED BY THIS ORDER OF THE LEARNED CIT(A), TH E ASSESSEE IS IN APPEAL BEFORE US. AT THE TIME OF HEARING, THE LEARNED COUNSEL 13 OF THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEF ORE THE LEARNED CIT(A). 6 THE LEARNED DR, ON THE OTHER HAND, SUPPORTED THE ORDERS OF THE AO AND THE LEARNED CIT(A). 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 22-10-2007 FOR RS.6.21 CRORES. THE ASSE SSEE AND HIS BROTHER HAD 50% SHARE IN THIS PROPERTY. THE ASSESSE E MADE INVESTMENT OF RS.50 LAKHS ON 31-12-2008 IN REC BOND S AND RS.50 LAKHS ON 26-05-2008 IN NHAI BONDS AND CLAIMED EXEMPTION OF RS.1 CRORE U/S 54EC OF THE ACT. THE IN VESTMENT IN REC BONDS WAS ALLOWED BY THE AO AS IT WAS WITHIN TH E TIME LIMIT OF SIX MONTHS PRESCRIBED IN SECTION 54EC OF T HE ACT, WHILE THE INVESTMENT IN NHAI BONDS WHICH WAS MADE ONLY ON 26-05- 2008 WAS NOT ALLOWED AS ACCORDING TO THE LOWER AUTH ORITIES THE ASSESSEE IS ONLY ENTITLED FOR EXEMPTION U/S 54EC UP TO RS.50 LAKHS ONLY. THE ASSESSEES CASE, HOWEVER, IS THAT AS PER THE PROVISO TO SECTION 54EC, INVESTMENT MADE ON OR AFTER 1 ST APRIL, 2007 IN THE LONG TERM SPECIFIED ASSET BY AN ASSESSEE DURING ANY FINANCIAL YEAR SHOULD NOT EXCEED RS.50 LAKHS. THE ASSESSEES CASE IS THAT SINCE THE PROPERTY 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 ORDER TO AVAIL EXEMPTION U/S 5 4EC OF THE ACT. THERE IS NO DISPUTE ABOUT RS.50 LAKHS INVESTED ON 31-12- 2007 IN REC BONDS. THE DISPUTE IS ONLY ABOUT FURTH ER INVESTMENT OF RS.50 LAKHS IN NHAI BONDS MADE ON 26- 05-2008. 14 SINCE SIX MONTHS IN THIS CASE INVOLVES TWO FINANCIA L YEARS, THE ASSESSEES CASE IS THAT IF HE HAD DEPOSITED ANOTHER RS.50 LAKHS FROM 1 ST APRIL, 2008 TO 21-04-2008, HE WAS ENTITLED FOR EXE MPTION 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 INVESTMENT MADE BY THE ASSESSEE ON 26-05-2008 I.E. 1 ST DAY OF THE REOPENING OF THE SUBSCRIPTION OF ELIGIBLE INVESTMEN T IN NHAI BONDS SHOULD BE TREATED IN TIME. THERE IS ALSO NO D ISPUTE ABOUT THE FACT THAT SUBSCRIPTION TO THE ELIGIBLE INVESTME NT WAS CLOSED DURING THE PERIOD 01-04-2008 TO 26-05-2008. THE DIS PUTE 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 CRORE AS SIX MONTHS PERIOD FOR INVESTMENT I N ELIGIBLE INVESTMENT INVOLVES TWO FINANCIAL YEARS. IF THE ANS WER TO THIS QUESTION IS YES, WHETHER INVESTMENT MADE BY THE A SSESSEE ON 26-05-2008 BEYOND SIX MONTHS PERIOD IS ELIGIBLE FOR EXEMPTION IN VIEW OF THE FACT THAT NO SUBSCRIPTION FOR ELIGIBLE INVESTMENT WAS AVAILABLE TO THE ASSESSEE FROM 1 ST 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 TH E 1 ST DAY OF APRIL, 2007 IN THE LONG TERM SPECIFIED ASSET BY AN ASSESSE E 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 30 TH SEPTEMBER OF THE FINANCIAL YEAR HE GETS AN OPPORTUNITY TO MAKE AN INVESTMENT OF RS.50 LAKHS EA CH IN TWO 15 DIFFERENT FINANCIAL YEARS AND IS ABLE TO CLAIM EXEM PTION UPTO RS.1 CRORE U/S 54EC OF THE ACT. SINCE THE LANGUAGE OF TH E PROVISO IS CLEAR AND UNAMBIGUOUS, WE HAVE NO HESITATION IN HOL DING THAT THE ASSESSEE IS ENTITLED TO GET EXEMPTION UPTO RS.1 CRO RE IN THIS CASE. THIS VIEW OF OURS GETS SUPPORT FROM THE FOLLOWING F INDING OF THE HON'BLE SUPREME COURT IN THE CASE OF IPCA LAB 266 I TR 521 (SC), WHEREIN IT HAS BEEN HELD BY THE HON'BLE SUPRE ME COURT THAT EVEN THOUGH A LIBERAL INTERPRETATION HAS TO BE GI VEN TO SUCH A PROVISION THE INTERPRETATION HAS TO BE AS PER THE W ORDING OF THE SECTION. IF THE WORDING OF THE SECTION IS CLEAR, THEN BENEFI TS WHICH ARE NOT AVAILABLE CANNOT BE CONFERRED BY IGNORING OR MISINT ERPRETING WORDS IN THE SECTION' HERE THE SITUATION IS REVERSE. SINCE THE WORDING OF THE PROVISO TO SECTION 54EC IS CLEAR, THE BENEFITS WHICH ARE AVAIL ABLE TO THE ASSESSEE CANNOT BE DENIED. IN VIEW OF ABOVE, IT IS HEREBY HELD THAT THE ASSESSEE IS ENTITLED FOR EXEMPTION OF RS.1 CRORE AS SIX MONTHS PERIOD FOR INVESTMENT IN ELIGIBLE INVESTMEN TS INVOLVED IS TWO FINANCIAL YEARS. 9 NOW, COMING TO THE SECOND ASPECT OF THE MATTER, W HETHER INVESTMENT OF RS.50 LAKHS MADE IN NHAI BONDS ON 26- 05-2008 CAN BE CONSIDERED TO BE MADE WITHIN SIX MONTHS PERI OD AS PER THE PROVISO TO SEC. 54EC, WE FIND THAT THE ASSESSEE WAS TO MAKE INVESTMENT IN SUCH BONDS BETWEEN 01-04-2008 TO 21-0 4-2008. THERE IS NO DISPUTE ABOUT THE FACT THAT SUBSCRIPTIO N OF ELIGIBLE BONDS WAS CLOSED DURING THIS PERIOD TILL 26-05-2008 AND ON THE 1 ST DAY OF THE REOPENING OF THE SUBSCRIPTION, THE ASSE SSEE MADE THIS INVESTMENT. UNDER THE CIRCUMSTANCES, WE ARE OF THE 16 CONSIDERED OPINION THAT THE ASSESSEE WAS PREVENTED BY SUFFICIENT CAUSE WHICH WAS BEYOND HIS CONTROL IN MAKING INVEST MENT IN THESE BONDS WITHIN THE TIME PRESCRIBED. WE FURTHER FIND THAT VARIOUS JUDICIAL AUTHORITIES HAVE TAKEN A VIEW THAT EXEMPTION SHOULD BE GRANTED IN SUCH CASES WHERE THERE IS A DE LAY IN MAKING INVESTMENT DUE TO NON-AVAILABILITY OF THE BONDS AND HAVE HELD THAT IT IS A REASONABLE CAUSE AND THE EXEMPTION SHO ULD BE GRANTED. IN THE CASE OF RAM AGARWAL VS. JOINT CIT 81 ITD 1 63 (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 C LOSED ON 31-8-1995 ON ACCOUNT OF STRIKE AS CERTIFIED BY THE OFFICIALS OF THE CONCERNED BANK. FROM THE CERTIFICATION GIVEN BY THE BANK OFFICIALS, THE ASSESSEE HAD APPROACHED THE BANK OFFICIALS WITH THE CHEQUE FOR THE AMOUNT OF DE POSIT ON 30-8-1995. THE ASSESSEE REMAINED UNABLE TO OBTAIN RECEIPT ON 31-8- 1995 DUE TO BANK STRIKE AND THE CHEQUE WAS CLEARED ON 1-9-1995. IN THIS VIE W OF THE SITUATION, IT CAN WELL BE SAID THAT THE DEPOSIT OF THE ASSESSEE WAS I N ACCORDANCE WITH THE PROVISIONS OF STATUTE AS ON THE LAST DATE I.E. THE 31-8-1995, THE DEPOSIT COULD NOT BE MADE DUE TO THE REASON WHICH WAS BEYOND THE CONTROL 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 BA NK TO MAKE HIM ENTITLE FOR EXEMPTION UNDER SEC 54F. AS MENTIONED EARLIER, THIS POSITION HAS ALSO BEEN ACCEPTED BY THE LEARNED CIT (A). THEREFORE, WE DIRE CT THE ASSESSING OFFICER TO ALLOW THE NECESSARY EXEMPTION TO THE ASSESSEE. BEFORE PARTING WE MAY OBSERVE THAT SECTION 54F IS A BENEFICIAL PROVISION TO ENCOURAGE ASSESSEE TO INVEST IN HOUSE PROPERTIES. K EEPING IN MIND THE ABOVE OBJECT BEHIND THE INSERTION OF SECTION 54F AND CONS IDERING THE FACT THAT THE ASSESSEE WAS NOT AT FAULT IN NOT DEPOSITING THE AMO UNT BEFORE 31-8-1995, WE HOLD THAT THE DEPOSIT MADE ON 1-9-1995 SATISFIES TH E CONDITION LAID DOWN IN SECTION 54F OF THE ACT. ' SINCE NO CONTRARY DECISION WAS CITED ON BEHALF OF T HE 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 FOR EXEMPTION IN VIEW OF THE FACT THAT NO SUBSCRIPTION FOR ELIGIBLE 17 INVESTMENT WAS AVAILABLE TO THE ASSESSEE FROM 1 ST APRIL, 2008 TO 26-05-2008. 11 IN THE RESULT, BOTH THE APPEALS ARE ALLOWED. ORDER PRONOUNCED IN THE COURT TODAY ON 30-03-2012 SD/- SD/- (A MOHAN ALANKAMONY) ACCOUNTANT MEMBER (D K TYAGI) JUDICIAL MEMBER DATE : 30-03-2012 COPY OF THE ORDER FORWARDED TO: 1. 2 SHRI ASPI GINWALA, SHRI RUSTOM GINWALA, SHREE RAM ENGG. & MFG. INDUSTRIES, OPP. NARSINH EST ATE, PRATAPNAGAR, BARODA-390 004 3. THE ASST. COMMISSIONER OF INCOME-TAX, CIRCLE-5, BARODA 4. CIT CONCERNED 5. CIT(A)-V, BARODA 6. DR, ITAT, AHMEDABAD BENCH-C, AHMEDABAD 7. GUARD FILE BY ORDER DEPUTY REGISTRAR ASSISTANT REGISTRAR ITAT, AHMEDABAD