Gayatri B Shah, Baroda V. Income Tax Officer, Ward-1(2)(1), Baroda

ITA 3273/AHD/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 8189 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 11 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-10-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2008-2009
• Appeal Filed On: 23-11-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DEEPAK SUTHARI A
• Assessee Lawyers: ADITI P SHETH
• Keywords: Capital asset; Question of law
• Section: 143(3)

Judgement Text

ITA NO. 3273/AHD/2015 GAYATRI B SHAH VS. ITO ASSESSMENT YEAR: 2008-09 PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD [ BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER ] ITA NO. 3273/AHD/2015 ASSESSMENT YEAR : 2008-09 GAYATRI B SHAH .............APPELLANT 71, KASTURI NAGAR, MANJALPUR, BARODA-390011 [PAN : AWAPS 1343 L] VS. THE ITO, .......................RESPONDENT WARD 1 (2)(1), BARODA APPEARANCES BY: ADITI P SHETH FOR THE APPELLANT DEEPAK SUTHARIA FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING : 21.08.2017 DATE OF PRONOUNCING THE ORDER : 27.10.2017 O R D E R 1. BY WAY OF THIS APPEAL, THE ASSESSEE APPELLANT HA S CHALLENGED CORRECTNESS OF ORDER DATED 8 TH SEPTEMBER 2015 PASSED BY THE CIT(A) IN THE MATTER OF ASSESSMENT UNDER SECTION 143(3) R.W.S. 147 OF THE INCOME-TAX A CT, 1961, FOR THE ASSESSMENT YEAR 2008-09. 2. THE ONLY GRIEVANCE PRESSED BY THE LEARNED COUNSE L IS AS FOLLOWS:- 3.00 DENIAL OF EXEMPTION TO THE TUNE OF RS.21,16, 172/- U/S 54EC OF THE ACT 3.01 ON THE FACTS AND CIRCUMSTANCES OF APPELLANTS CASE AS WELL AS IN LAW, THE LD. CIT(A) HAS ERRED IN CONFIRMING ACTION OF LD AO OF DENIAL OF EXEMPTION U/S 54EC OF THE ACT NOT APPRECIATING THAT THE APPELLANT HAD INVESTED IN REC BONDS TO THE TUNE OF RS.25,00,000/- OUT OF ADVANCE MONEY RECEIVED TOWARDS SALE OF PROPERTY. 3. TO ADJUDICATE ON THE ABOVE GRIEVANCE, ONLY A FEW MATERIAL FACTS NEED TO BE TAKEN NOTE OF. DURING THE COURSE OF ASSESSMENT PRO CEEDINGS, IT WAS NOTICED THAT THE ASSESSEE HAD SOLD A PLOT OF LAND, ON 20.12.2007, FO R RS.98,19,220/- IN RESPECT OF WHICH CAPITAL GAIN WAS WORKED OUT AT RS.51,16,172/- . THE ASSESSEE HAD INVESTED ITA NO. 3273/AHD/2015 GAYATRI B SHAH VS. ITO ASSESSMENT YEAR: 2008-09 PAGE 2 OF 3 RS.55,00,000/- IN REC BONDS, WHICH WERE ELIGIBLE FO R EXEMPTION UNDER SECTION 54EC, AND, ACCORDINGLY, TAXABLE CAPITAL GAINS WERE COMPUTED AT NIL. HOWEVER, THE ASSESSING OFFICER DECLINED THE EXEMPTION UNDER SECT ION 54EC IN RESPECT OF QUALIFYING INVESTMENT OF RS.25,00,000/- ON THE GROU ND THAT THE SAID INVESTMENT WAS MADE ON 31.03.2007, I.E. PRIOR TO THE SALE OF CAPIT AL ASSET IN QUESTION. AGGRIEVED, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CI T(A) AND CONTENDED THAT THE INVESTMENT OF RS.25,00,000/- WAS MADE OUT OF RELATE D ADVANCE PAYMENTS RECEIVED BY THE ASSESSEE AGGREGATING TO RS.39,27,674/- RECEI VED PRIOR TO 31.03.2007. LEARNED CIT(A), HOWEVER, CONFIRMED THE ACTION OF TH E ASSESSING OFFICER. THE ASSESSEE IS AGGRIEVED AND IN FURTHER APPEAL BEFORE ME. 4. I HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF THE AP PLICABLE LEGAL POSITION. 5. I FIND THAT THE ISSUE IN APPEAL IS NOW SQUARELY COVERED, IN FAVOUR OF THE ASSESSEE, BY HONBLE BOMBAY HIGH COURTS JUDGMENT I N THE CASE OF CIT VS. SUBHASH VINAYAK SUPNEKAR, [2017] 77 TAXMANN.COM 226 (BOMBAY ], WHICH OBSERVES AS FOLLOWS:- 6. WE FIND THAT THE SALE DEED DATED 5TH APRIL, 200 7 IS PRODUCED. THIS ITSELF IN CLAUSE (D) THEREOF RECORDS THE FACT THAT THE AGREEM ENT TO SALE HAD BEEN ENTERED INTO ON 21ST FEBRUARY, 2006 IN RESPECT OF T HE SUBJECT PROPERTY AND THE AMOUNTS BEING RECEIVED BY THE VENDOR (RESPONDENT AS SESSEE) UNDER THAT AGREEMENT TO SALE. THUS, THESE AMOUNTS WHEN RECEIVE D AS ADVANCE UNDER AN AGREEMENT TO SALE OF A CAPITAL ASSET ARE INVESTED I N SPECIFIED BONDS, THE BENEFIT OF SECTION 54EC OF THE ACT IS AVAILABLE. IN THE ABOVE VIEW, THE TRIBUNAL HOLDS THAT THE FACTS OF THE PRESENT CASE ARE SIMILA R TO THE FACTS BEFORE THE TRIBUNAL IN BHIKULAL CHANDAK HUF (SUPRA). THE REVEN UE DOES NOT DISPUTE THE SAME BEFORE US. MOREOVER, ON ALMOST IDENTICAL FACTS , THIS COURT IN MRS.PARVEEN P. BHARUCHA VS. DCIT, 348 ITR 325, HELD THAT THE EARNEST MONEY RECEIVED ON SALE OF ASSET, WHEN INVESTED IN S PECIFIED BONDS UNDER SECTION 54EC OF THE ACT, IS ENTITLED TO THE BENEFI T OF SECTION 54EC OF THE ACT. THIS WAS IN THE CONTEXT OF REOPENING OF AN ASSESSME NT AND RELIANCE WAS PLACED UPON CBDT CIRCULAR NO. 359 DATED 10TH MAY, 1 983 IN THE CONTEXT OF SECTION 54E OF THE ACT. 7. MR. BAJPAYEE, LEARNED COUNSEL FOR THE REVENUE VE RY FAIRLY POINTS OUT THAT THE REVENUE HAD PREFERRED AN APPEAL AGAINST THE ORD ER OF THE TRIBUNAL IN BHIKULAL CHANDAK HUF (SUPRA) TO THIS COURT (NAGPUR BENCH) BEING INCOME TAX APPEAL NO.68 OF 2009. THIS COURT BY AN ORDER DA TED 22ND AUGUST, 2010 REFUSED TO ENTERTAIN THE REVENUE'S ABOVE APPEAL FRO M THE DECISION OF THE TRIBUNAL IN BHIKULAL CHANDAK HUF (SUPRA). IN THE AB OVE VIEW, THE QUESTION AS PROPOSED FOR OUR CONSIDERATION IN THE PRESENT FACTS DOES NOT GIVE RISE TO ANY SUBSTANTIAL QUESTION OF LAW. THUS, NOT ENTERTAINED. ITA NO. 3273/AHD/2015 GAYATRI B SHAH VS. ITO ASSESSMENT YEAR: 2008-09 PAGE 3 OF 3 6. RESPECTFULLY FOLLOWING THE ABOVE JUDICIAL PRECED ENT, I UPHOLD THE PLEA OF THE ASSESSEE AND DIRECT THE ASSESSING OFFICER TO GRANT EXEMPTION UNDER SECTION 54EC IN RESPECT OF INVESTMENT OF RS.25,00,000/- ON 31.03.20 07. THE ASSESSEE GETS THE RELIEF ACCORDINGLY. 7. IN THE RESULT, THE APPEAL IS ALLOWED. PRONOUNCED IN THE OPEN COURT TODAY ON THE 27 TH OCTOBER, 2017. SD/- PRAMOD KUMAR (ACCOUNTANT M EMBER) AHMEDABAD, THE 27 TH DAY OF OCTOBER, 2017 **BT COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER TRUE COPY ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD 1. DATE OF DICTATION: ......TWO PAGES MANUSCRIPTS OF HONBLE AM ATTACHED....TYPED ON 27.10.2017 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER: ... 27.10.2017........ 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR . P.S./P.S.: ... 27.10.2017.... . 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT: 27.10.2017 ... 5. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK : .. 30.10.2017.... 6. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK : . 7. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER: