Deputy Commissioner of Income-tax, V. Smt. Shanta G. Varde, Pune

ITA 449/PUN/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 6986 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 10 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-03-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 13-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P S NAIK
• Keywords: Capital asset converted into stock in trade; Capital asset; Date of conversion
• Section: 45(2); 143(3)

Judgement Text

] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI ANIL CHATURVEDI, AM AND SHRI VIKAS AWASTHY, JM / ITA NO.449/PUN/2015 / ASSESSMENT YEAR : 2011-12 DY. COMMISSIONER OF INCOME TAX, CIRCLE 1(1), PUNE. . / APPELLANT V/S SMT. SHANTA G. VARDE, 12, MRUTUNJAY COLONY, KOTHRUD, PUNE 411 029. PAN AAOPV 3495N. . / RESPONDENT / APPELLANT BY : SHRI P.S. NAIK / RESPONDENT BY : SHRI C.H. NANIWADEKAR. / ORDER PER ANIL CHATURVEDI, AM : THIS APPEAL FILED BY THE REVENUE IS EMANATING OUT OF THE ORDER OF COMMISSIONER OF INCOME TAX (A) 3, PUNE DT.16.01 .2015 FOR THE ASSESSMENT YEAR 2011-12. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON R ECORD ARE AS UNDER :- 2.1 ASSESSEE IS AN INDIVIDUAL STATED TO BE HAVING DERIVED INCOME FROM HOUSE PROPERTY AND CAPITAL GAINS. ASSESSEE FILED HE R RETURN OF INCOME FOR A.Y. 2011-12 ON 23.07.2011 DECLARING TOTAL TAXA BLE INCOME OF RS.1,81,01,090/-. THE CASE WAS SELECTED FOR SCRUT INY AND / DATE OF HEARING : 08.02.2017 / DATE OF PRONOUNCEMENT: 03.03.2017 2 ITA NO.449/PUN/2015 AY.NO.2011-12 THEREAFTER THE ASSESSMENT WAS FRAMED U/S 143(3) VIDE OR DER DT.15.01.2014 AND THE TOTAL INCOME WAS DETERMINED AT RS.2,31,01,090/-. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFORE LD. CIT(A), WHO VIDE ORDER DT.16.01.2015 A LLOWED THE APPEAL OF THE ASSESSEE. AGGRIEVED BY THE ORDER OF L D. CIT(A), REVENUE IS NOW IN APPEAL BEFORE US AND HAS RAISED THE FOLLO WING GROUNDS: 1. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ER RED IN FACTS AND IN LAW IN CONSIDERING THE TIME LIMIT FOR R ECKONING THE DATE FOR CLAIMING EXEMPTION U/S 54EC OF THE ACT WITHIN 6 MONTHS FROM THE DATE ON RECEIPT OF CONSIDERATION BY THE ASSESSEE, WHEREIN IT SHOULD BE RECKONED FROM THE DA TE OF TRANSFER OF ASSET WHICH IS 30/08/2010 IN THIS CASE. 2. THE LD.COMMISSIONER OF INCOME TAX (APPEALS) ERRE D IN FACTS AND IN LAW IN IGNORING THE DECISION OF THE HO NBLE BOMBAY HIGH COURT IN THE CASE OF HINDUSTAN UNILEVER LTD VS. DY. CIT (2010) 191 TAXMANN 119. BOTH THE GROUNDS RAISED BY THE REVENUE BEING INTERCONN ECTED CONSIDERED TOGETHER. 3. AO NOTICED THAT DURING THE YEAR, ASSESSEE HAD SOLD LA ND ALONG WITH THREE UPPER FLOOR RESIDENTIAL BUILDINGS AND TWO GARAGES SITUATED AT BANDRA, MUMBAI ON 30.08.2010 FOR A TOTAL CONSIDERATION OF RS.2,50,00,000/-. OUT OF TOTAL CONSIDERATIO N THAT WAS RECEIVED, RS.50,00,000/- WAS INVESTED IN RURAL ELECTRIFIC ATION CORPORATION BONDS AND THE AMOUNT THAT WAS INVESTED IN AFORESAID BONDS WAS CLAIMED AS DEDUCTION U/S 54EC OF THE ACT. AO N OTICED THAT THE CONSIDERATION ON SALE OF CAPITAL ASSET WAS RECEIV ED BY THE ASSESSEE ON 07.09.2010. ACCORDING TO AO, FOR CLAIMING DEDUC TION U/S 54EC, ASSESSEE IS REQUIRED TO MAKE INVESTMENT WITHIN A PERIOD OF SIX MONTHS FROM THE DATE OF TRANSFER OF CAPITAL ASSET. IN THE CASE OF ASSESSEE, HE NOTED THAT SINCE THE PROPERTY WAS TRAN SFERRED ON 30.08.2010, THE PERIOD OF SIX MONTHS EXPIRED ON 28.02.2011 AND 3 ITA NO.449/PUN/2015 AY.NO.2011-12 SINCE THE BONDS WERE ALLOTTED ON 31.03.2011, THE INVESTME NT IN ELIGIBLE BONDS WAS BEYOND THE STIPULATED PERIOD OF SIX MONT HS AND THEREFORE THE ASSESSEE WAS NOT ELIGIBLE FOR DEDUCTION U/S 54EC OF THE ACT. ANOTHER REASON FOR THE ASSESSEE BEING NOT ELIG IBLE FOR DEDUCTION U/S 54EC WAS THAT THE INVESTMENT IN BONDS WA S MADE JOINTLY BY ASSESSEE WITH HER HUSBAND SHRI GAJANAN PRA BHAKAR VARDE AND THEREFORE ACCORDING TO AO FOR THAT REASON ALS O, THE ASSESSEE WAS NOT ELIGIBLE FOR DEDUCTION U/E 54EC OF THE A CT AND ACCORDINGLY DENIED THE CLAIM OF DEDUCTION U/S 54EC OF THE ACT. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATT ER BEFORE LD. CIT(A), WHO DECIDED THE ISSUE IN FAVOUR OF ASSESSEE BY H OLDING AS UNDER : 3.4 I HAVE CONSIDERED THE SUBMISSIONS MADE BY THE APPELLANT AND PERUSED MATERIAL AVAILABLE ON RECORD. THE ONLY ISSUE DISPUTED RELATES TO THE DENIAL OF CLAIM OF EXEMPTION U/S 54EC OF THE ACT. THE FACTS OF THE CASE INDICATE THAT THE APPELLANT SOLD AN ANCESTRAL PROPE RTY SITUATED AT BANDRA, MUMBAI ON 30 TH AUGUST, 2010 FOR A TOTAL CONSIDERATION OF RS. 2 CRORES 50 LACS. THE STATEME NT OF BANK ACCOUNT OF CENTRAL BANK OF INDIA, KOTHRUD, PUNE FIL ED BY THE APPELLANT SHOWS THE ENTIRE SALES CONSIDERATION TO H AVE BEEN RECEIVED & CREDITED IN THE ACCOUNT ON 07.09.2010. T HE APPELLANT HANDED OVER THE CHEQUE TO THE BROKER J.M. FINANCIAL SERVICES LTD. ON 28.02.2011 AS IS CLEARLY EVIDENT FROM THE TRANSACTION RECEIPT-FILED BY THE APPELLANT THOUGH, THE PAYMENT HAS BEEN DEBITED THROW THE AFORESAID BA NK ACCOUNT ON 1 ST OF MARCH, 2011. THE A.O. HAS DENIED THE EXEMPTION CONTENDING THAT THE TIME LIMIT OF SIX MON THS IS TO BE CONSIDERED FROM THE DATE OF TRANSFER OF THE ASSE T I.E. 30.08.2010. IN THIS REGARD THE PUNE ITAT IN THE CAS E OF MAHESH NEMICHANDRA GANESHWADE & OTHERS VS ITO 594/PN/10 DATED 29-03-2012 ALSO RELIED UPON BY THE APPELLANT BEFORE THE A.O. DURING THE ASSESSMENT PROCEEDINGS, ON SIMILAR FACT HAS HELD AS UNDER: '16. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS IN THIS CASE, THE DISPUTE BEFORE US IS WITH RESPECT TO THE CLAIM OF EXEMPTION OF LONG-TERM CAPITAL GAIN ON SALE OF LAND WITH RESPECT TO INVESTMENTS OF RS. 12,50,000/- AND RS. 37,50.000/- MADE ON 03.08.2007 AND 27.10.2007 RESPECTIVELY. SECTION 54EC PRESCRIBES THAT THE EXEMPTION SHALL BE AVAILABLE IF THE INVESTMENT IN SPECIFIED BONDS IS M ADE WITHIN A PERIOD OF SIX MONTHS AFTER THE DATE OF TRANSFER OF THE CAPITAL ASSET WHICH, IN THE PRESENT CASE, IS 12.07.2005. THE ASSESSEE HAS EXPLAINED 4 ITA NO.449/PUN/2015 AY.NO.2011-12 THAT HE COULD NOT MAKE THE INVESTMENTS WITHIN SIX MONTHS FROM THE DATE OF TRANSFER, I.E. 12.07.2005 BECAUSE THE AFORESTATED CONSIDERATION WAS RECEIVED ON SUBSEQUENT DATES NAMELY, 12.12.2 007, 14.5.2007, 19.6.2007 AND 3.7.2007. A TECHNICAL INTERPRETATION OF SECTION 54EC IN THIS REGARD WOULD IMPLY THAT THE EXEMPTION FROM TAX ON CAPITAL GAINS IS NOT AVAILABLE QUA THE IMPUGNED INVESTMENT OF RS.50 LAKHS. SO, HOWEVER, THE PLEA SET-UP BY THE ASSESSEE , IS ON ACCOUNT OF THE PURPOSE AND SPIRIT OF THE SECT ION AND ON ACCOUNT OF THE FACT THAT THE RIGHT TO COLLEC T SUCH SALE CONSIDERATION AROSE AFTER THE PERIOD OF SIX MONTHS FROM THE DATE AT TRANSFER. IT IS PLEADED THAT THE REQUIREMENT OF SECTION 54EC STIPULATING INVESTMENT IN SIX MONTHS FROM THE DATE OF TRANSFER HAS TO BE APPROPRIATELY UNDERSTOOD AND APPLIED SO A S TO FURTHER THE PURPOSE AND SPIRIT OF THE SECTION. 17. IN A SOMEWHAT SIMILAR SITUATION, THE REQUIREMENT OF SECTION 54EC TO THE EFFECT THAT INVESTMENT IN SPECIFIED ASSETS IS TO BE MADE WITHIN A PERIOD OF S IX MONTHS FROM THE DATE OF TRANSFER, WAS PUT TO SOME CLARIFICATION BY THE CBDT IN CIRCULAR NO.791 (SUPRA ). THE QUESTION AROSE BEFORE THE CBDT REGARDING EXEMPTION OF A LONG-TERM CAPITAL ASSET WHICH HAD ARISEN ON CONVERSION OF A CAPITAL ASSET INTO STOCK-IN- TRADE. SUCH CAPITAL GAIN WOULD ARISE IN THE YEAR OF CONVERSION, SO HOWEVER, IN TERMS OF SECTION 45(2) O F THE ACT, ITS TAXABILITY IS POSTPONED TO THE YEAR IN WHICH SUCH STOCK-IN-TRADE IS ACTUALLY SOLD OR OTHERWISE TRANSFERRED BY THE ASSESSEE. THE QUESTION AROSE AS TO WHETHER THE DATE OF TRANSFER AS REFERRE D TO IN SECTION 54E OF THE ACT IS THE DATE OF CONVERSION AT CAPITAL ASSET INTO STOCK-IN-TRADE OR THE DATE ON WHICH THE STOCK-IN-TRADE IS SOLD OR OTHERWISE TRANSFERRED BY THE ASSESSEE. AS PER THE PHRASEOLOGY OF SECTIONS 54EA, 54EB AND 54EC THE DATE OF TRANSFER IN SUCH CASES IS THE DATE ON WHICH THE CAPITAL ASSET IS CONVENED BY THE ASSESSEE INTO STOCK-IN-TRADE AND N OT THE DATE ON WHICH SUCH STOCK-IN-TRADE IS SOLD OR OTHERWISE TRANSFERRED BY THE ASSESSEE. THUS, AS PE R THE AFORESAID UNDERSTANDING IT MAY NOT BE POSSIBLE FOR AN ASSESSEE TO MAKE THE REQUIRED INVESTMENT UNDER THE AFORESAID SECTIONS AT THE POINT OF CONVERSION OF CAPITAL INTO STOCK-IN-TRADE BECAUSE RIGHT TO COLLECT SALE CONSIDERATION IN SUCH CASES ARISES ONLY AT THE POINT OF SALE OR TRANSFER OTHERWISE OF STOCK-IN- TRADE. THE CBDT IN CONSULTATION WITH THE MINISTRY O F LAW DECIDED THAT THE PERIOD OF SIX MONTHS FOR MAKIN G INVESTMENT IN SPECIFIED ASSETS FOR THE PURPOSE OF SECTIONS 54EA, 54EB AND 54EC OF THE ACT SHOULD BE TAKEN FROM THE DATE SUCH STOCK-IN-TRADE IS SOLD OR OTHERWISE TRANSFERRED IN TERMS OF SECTION 45(2) OF THE ACT, THOUGH THE TAXABILITY OF CAPITAL GAIN WAS ON T HE BASIS OF 'TRANSFER' AS UNDERSTOOD IN SECTION 45(2) OF THE ACT. THEREFORE, HAVING REGARD TO THE IMPOSSIBIL ITY OF PERFORMANCE TO INVEST THE AMOUNT IN SPECIFIED ASSETS HAS TO BE RECKONED WITHIN SIX MONTHS FROM R HO DATE OF TRANSFER (I.E. THE DATE OF CONVERSION OF CAPITAL ASSET INTO STOCK-IN-TRADE THE CBDT APPRECIATED AND HAS CLARIFIED THAT THE PERIOD OF SIX MONTHS FOR MAKING INVESTMENT IN SPECIFIED ASSETS HAS TO BE RECKONED 5 ITA NO.449/PUN/2015 AY.NO.2011-12 FROM THE DATE OF THE SALE OF SUCH STOCK-IN-TRADE WHEN THE RIGHT TO COLLECT SALE CONSIDERATION IN SUCH CAS ES AROSE, WHICH WAS MUCH AFTER THE DATE OF TRANSFER AS CONTEMPLATED FOR THE PURPOSE OF TAXATION. 18. IN OUR CONSIDERED OPINION, THE INTERPRETATION P LACED BY THE CBDT IN CONSULTATION WITH THE MINISTRY OF L AW TO THE CONDITION OF MAKING INVESTMENT WITHIN SIX MONTHS FROM THE DATE OF TRANSFER IN SECTION 54EC WOULD SUPPORT THE CLAIM OF THE ASSESSEE IN THIS CAS E ALSO TOR EXEMPTION FROM CAPITAL GAIN WITH RESPECT TO THE IMPUGNED SUM OF RS. 50 LAKHS INVESTED IN SPECIFIED ASSETS ON 03.8.2007 AND 27.10.2007. IN TH E PRESENT CASE, ADMITTEDLY THE IMPUGNED AMOUNT OF SAL E PROCEEDS HAVE BEEN RECEIVED BY THE ASSESSEE MUCH AFTER THE DATE OF TRANSFER I.E. . 12.7.2005, SO HOWEVER, IT IS ALSO EMERGING FROM THE RECORD THAT THE INVESTMEN TS OF RS.12,50,000/- AND RS.37,50,000/- MADE ON 3.8.2007 AND 27.10.2007 RESPECTIVELY HAVE BEEN MADE WITHIN SIX MONTHS OF RECEIPT OF SUCH CONSIDERATION. THEREFORE, HAVING REGARD TO THE INTERPRETATION PLACED BY THE CBDT TO UNDERSTAND THE REQUIREMENT OF MAKING INVESTMENT WITHIN SIX MONTHS FROM THE DATE OF TRANSFER IN SECT ION 54EC OF THE ACT WE ARE INCLINED TO UPHOLD THE PLEA OF THE ASSESSEE FOR EXEMPTION FROM FAX ON CAPITAL GAIN S QUA IMPUGNED AMOUNT OF RS. 50 LAKHS. THEREFORE, ON THIS ASPECT, ASSESSEE HAS TO SUCCEED. THUS, THIS GROUND OF APPEAL IS ALLOWED' 3.5 FURTHER, THE MUMBAI ITAT IN THE CASE OF AQUATEC H ENGINEERS VS ADDL.CIT (CITED SUPRA) HAS HELD THAT A S THE DATE OF ACTUAL OUTFLOW OF FUND IS CONSIDERED TO BE RELEV ANT DATE OF INVESTMENT IN SPECIFIED ASSETS U/S 54EC, IT MUST, ON THE PRINCIPLE OF PARITY, ALSO TAKE THE DATE OF RECEIPT OF CONSIDERATION FOR DETERMINING THE PERIOD OF SIX MON THS, ALLOWING A TIME LAG FOR RECEIPT OF CONSIDERATION AS IN THE NORMAL COURSE OF BANKING BUSINESS. '3.1 THE PRIMARY FACTS ARE NEITHER DISPUTED NOR DENIED. THE ISSUE, AS APPARENT, HAS TWO LIMBS TO IT . FIRST, IS THE DATE OF TRANSFER, FOR WHICH THE ASSESSEE HAS RELIED ON THE DECISION IN THE CASE OF CHANCHAL KUMAR SIRCAR (SUPRA). EVEN AS OBSERVED DURING THE COURSE OF HEARING, THE SAID DECISION IS CLEARLY INAPPLICABLE INASMUCH AS IN THAT CASE THE CONSIDERATION FOR THE TRANSFER WAS RECEIVED SEVERAL MONTHS AFTER THE DATE OF THE TRANSFER OF THE PROPERTY, RENDERING ACTUAL INVESTMENT WITHIN A PERIOD OF SIX MONTHS OF THE TRANSFER IMPOSSIBLE, SO THAT THE ASSESSEE'S CASE (F OR CLAIMING BENEFIT U/S.54EC) WOULD STAND OUSTED AT TH E VERY THRESHOLD. THE TRIBUNAL'S VIEW OF RECKONING TH E COMMENCEMENT DATE AS THE DATE OF RECEIPT OF THE CONSIDERATION, AS AGAINST THE DATE OF TRANSFER, AS CLEARLY POSTULATED BY THE PROVISION, WAS GUIDED BY THE PECULIAR FACTS OF THE CASE; THE PROVISION BEING A BENEFICIAL PROVISION, SO THAT A LIBERAL VIEW THERE OF OUGHT TO BE TAKEN WHERE THE FACTS OTHERWISE ADMIT. IN THE INSTANT CASE, ON THE OTHER HAND, THE ASSESSEE H AS RECEIVED THE PAYMENT WITHIN A PERIOD OF TEN DAYS. T HE SAME, THOUGH ON A SOMEWHAT HIGHER SIDE, INASMUCH AS A PAYMENT BY BANK INSTRUMENT WOULD ORDINARILY 6 ITA NO.449/PUN/2015 AY.NO.2011-12 STAND TO BE EFFECTED/CLEARED WITHIN TWO TO THREE WORKING DAYS, THE TIME LAG CANNOT BE CONSIDERED AS INORDINATE BY ANY STRETCH OF IMAGINATION AND, RATHER, EVEN AS PLEADED BY THE LD. AR IN HIS FAVOUR, STANDS RECEIVED ONLY IN THE NORMAL COURSE. HOW COULD THE ASSESSEE THEN SEEK SUPPORT FROM THE DECISION IN THE C ASE OF CHANCHAL KUMAR SIRCAR (SUPRA), WHEREIN THE TRIBUNAL WAS MOVED BY THE FACT OF THE IMPOSSIBILITY OF THE COMPLIANCE OF THE PROVISION IN THE FACTS OF THE CASE? SO HOWEVER, AS THE REVENUE CONSIDERS THE ACTUAL OUTFLOW OF FUNDS AS THE RELEVANT DATE OF INVESTMENT (IN SPECIFIED ASSET U/S. 54EC), IT MUST, ON THE PRINCIP LE OF PARITY, ALSO TAKE THE DATE OF RECEIPT OF CONSIDERAT ION, ALLOWING A TIME LAG OF TWO TO THREE WORKING DAYS, I .E., AS IN THE NORMAL COURSE OF BANKING BUSINESS, FOR TH E SAME (RECEIPT). AS SUCH, THE RELEVANT DATE WOULD BE UPON ALLOWING THE NORMATIVE TIME REQUIRED FOR THE REALIZATION OF FUNDS THROUGH THE BONKING CHANNEL. W E DRAW SUPPORT OR THIS PROPOSITION FROM S.27 OF THE GENERAL CLAUSES ACT, 1897. THE DATE OF THE AGREEMEN T BEING 29.02.2008, I.E., THE LAST DATE OF THE MONTH OF FEBRUARY, THE DATE OF RECEIPT WOULD - IN THE ORDINA RY AND REGULAR COURSE - FALL SOMETIME IN THE FIRST WEE K OF MARCH, 2008, I.E., EVEN IF WE DO NOT CONSIDER THE D ATE OF THE ACTUAL RECEIPT AS BEING DATE OF RECEIPT IN THE NORMAL COURSE, BEING SANS ANY DETAILS IN THE MATTER BY THE ASSESSEE AND, THUS, NOT RELEVANT.' THUS, IN VIEW OF THE ABOVE RATIO OF THE DECISIONS T HE TIME LIMIT OF SIX MONTHS FOR MAKING INVESTMENT IS TO BE CONSID ERED FROM THE DATE OF RECEIPT OF SALE CONSIDERATION WHICH IS 7 TH SEPT., 2010 AND THE TIME LIMIT OF SIX MONTHS HAS TO BE CON STRUED AS SIX MONTHS FROM THAT DATE OF TRANSFER AND HENCE THE APPELLANT WAS SUPPOSED TO MAKE THE INVESTMENT BEFORE 30 TH MARCH 2011 AS SIX MONTHS PERIOD SHOULD BE RECKONED FROM T HE END OF THE MONTH IN WHICH SUCH TRANSFER TAKES PLACE AS HELD IN YAHYA E. DHARIWALA VS DCIT (2012) 49 SOT 458 (MUM). 3.6 IN VIEW OF THE ABOVE FACTS ON THE FIRST ISSUE A ND THE RATIO OF JUDICIAL DECISIONS IN THE CONTENTION RAISED BY T HE APPELLANT IS FOUND TO BE ACCEPTABLE. 3.7 SO FAR AS THE SECOND ISSUE REGARDING THE INVEST MENT MADE IN JOINT NAME ALONG WITH THE SPOUSE OF THE APPELLAN T IS CONCERNED IT IS NOTICED THAT THE APPELLANT IS A 70 YEARS OLD LADY AND, THEREFORE, AS A MATTER OF CONVENIENCE ON HER PART HAD MADE THE APPLICATION JOINTLY WITH HER HUSBAND M R. GAJANAN VARDE. ON PERUSAL OF THE REC BOND IT IS SEE N THAT THE FIRST NAME IS OF THE APPELLANT AND THE JOINT NA ME IS OF HER SPOUSE MR. GAJANAN PRABHAKAR VARDE. THE PAYMENT FOR THE SAID BOND HAS BEEN MADE BY THE APPELLANT FROM HER O WN BANK ACCOUNT NO.1014311221 AT CENTRAL BANK OF INDIA , KOTHRUD, PUNE, HENCE OUT OF HER OWN FUNDS. IN THIS REGARD THE DECISION OF THE DELHI ITAT IN THE CASE OF ITO VS SA RASWATI RAMANATHAN (CITED SUPRA) RELIED UPON BY THE APPELLA NT IS RELEVANT WHEREIN IT IS HELD THAT INVESTMENT MADE IN JOINT NAME IS SUFFICIENT COMPLIANCE FOR CLAIMING EXEMPTION AND IT WAS NOT THE REQUIREMENT OF THE SECTION THAT THE INV ESTMENT BE MADE IN ASSESSEE'S EXCLUSIVE NAME. IT HELD THAT WHE RE THE 7 ITA NO.449/PUN/2015 AY.NO.2011-12 CONDITION FOR AVAILING OF SECTION 54EC EXEMPTION I. E. FUNDS FOR INVESTMENT IN BONDS MUST BE TRACEABLE TO THE SALE P ROCEEDS OF THE CAPITAL ASSETS IS SATISFIED, EMPTION CANNOT BE DENIED. IT FURTHER HELD THAT WHEN THE SALE PROCEEDS OF CAPITAL ASSETS HAS BEEN CHANNELIZED INTO THE ASSETS IN NATIONAL INTERE ST AS PER THE MAIN AND VITAL OBJECT OF SECTION 54EC, ASSESSEE WOULD BE ELIGIBLE FOR EXEMPTION THEREUNDER AND THE OBJECT OF JOINT INVESTMENT IS MERELY TO AVOID PROBLEMS IN FUTURE. T HE CONSEQUENCES THAT FLOW FROM INCLUDING THE SON'S NAM E AS A JOINT NAME ARE NOT RELEVANT FOR THE PURPOSE OF GRAN TING EXEMPTION U/S 54EC TO THE ASSESSEE. IN THE CASE OF ACIT VS VIJAY S. SHIRODKAR (2011) 48 SOT 8 (MUM) IT WAS HEL D THAT EVEN IF BONDS WERE TAKEN IN THE NAME OF WIFE BUT AS SESSEE IS A CO-HOLDER OF THE BOND, EXEMPTION U/S 54EC IS ADMI SSIBLE TO HIM. 3.8 IN VIEW OF THE ABOVE FACTS AND RATIO OF THE AFO RESAID JUDICIAL DECISIONS THE GROUNDS OF APPEAL NO. 1, 2 & 3 RAISED BY THE APPELLANT ARE ALLOWED. AGGRIEVED BY THE ORDER OF LD. CIT(A), REVENUE IS NOW IN A PPEAL BEFORE US. 4. BEFORE US, LD.D.R. SUPPORTED THE ORDER OF LD. CIT(A). ON THE OTHER HAND, LD.A.R. REITERATED THE SUBMISSIONS MADE BEFORE AO AND LD. CIT(A) AND SUPPORTED THE ORDER OF LD. CIT(A). 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT CASE IS WITH RESPECT TO DEDUCTION U/S 54EC OF THE ACT. WE FIND THAT LD. CIT(A) WHILE DECIDING THE ISSUE HAS NOTED THAT THOUGH THE PROPERTY WAS TRANSFERRED ON 30.08.2010, THE SALE CONSIDERATION WAS REC EIVED AND CREDITED IN THE BANK ACCOUNT OF THE ASSESSEE ON 07.09.20 10 AND THE ASSESSEE HAD HANDED OVER THE CHEQUE FOR INVESTMEN T IN RURAL ELECTRIFICATION CORPORATION BOND TO THE BROKER ON 28.08.20 11 WHICH IS WITHIN THE PERIOD SPECIFIED U/S 54EC OF THE ACT EVE N THOUGH THE ACCOUNT OF THE ASSESSEE WAS DEBITED ON 31.0 3.2011. BEFORE US, NO MATERIAL HAS BEEN PLACED BY REVENUE TO SHO W THAT THE ASSESSEE WAS NOT HAVING THE FUNDS AS ON THE ISSUE OF CHEQUE FOR INVESTMENT OR THE CHEQUE ISSUED BY ASSESSEE WAS DIS HONOURED 8 ITA NO.449/PUN/2015 AY.NO.2011-12 ON ACCOUNT OF INSUFFICIENCY OF FUNDS. WE FIND THAT LD. CIT(A) AFTER CONSIDERING THE DECISIONS OF TRIBUNAL CITED IN HIS ORDER HAS HELD THAT THE TIME LIMIT OF SIX MONTHS FOR MAKING INVESTMENT IS T O BE CONSIDERED FROM THE DATE OF RECEIPT OF SALE CONSIDERATION. WE FURTHER FIND THAT THE CO-ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF YOGESH MATURADAS AND SHRI JANAK MATURADAS IN ITA NO.1350/MUM/2010 DT.11.07.2012 (TS 569-ITAT-2012 (MUM) AND AFTER RELYING ON THE CBDT CIRCULAR NO.791 DT.26.02.2000 HAS HELD THAT PERIOD OF SIX MONTHS FOR MAKING 54EC INVESTMENT IS TO BE COUNTED FROM THE DATE OF RECEIPT OF SALES CONSIDERATION A ND NOT FROM THE DATE OF TRANSFER. FURTHER THE PROVISIONS OF SEC.54 EC ARE BENEFICIAL PROVISIONS. IT IS A SETTLED PROVISION OF LAW THAT IN CONSTRUING A BENEFICIAL ENACTMENT, THE VIEW THAT ADVANCES THE OBJECT OF THE BENEFICIAL ENACTMENT AND SERVES ITS PURPOSE MUST BE PREFERRED TO ONE WHICH OBSTRUCTS THE OBJECTS AND PARA LYSES THE PURPOSE OF BENEFICIAL ENACTMENT AND FOR THIS PROPOSITION, WE RELY ON THE DECISION IN THE CASE OF CIT VS. RAJESH KUMAR JALAN (20 06) 286 ITR 274 (GAU). WE FURTHER FIND THAT HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. SHRI A. SURESH RAO REPORTED IN ( TS-688-HC 2013 (KAR) AND AFTER RELYING ON THE DECISION OF APEX COURT IN THE CASE OF SMT. SAROJ AGGARWAL VS. CIT (1985) 156 ITR 497 (S C) HAS HELD THAT FACTS SHOULD BE VIEWED IN NATURAL PERSPECTIVE, HA VING REGARD TO THE COMPULSION OF THE CIRCUMSTANCES OF A CASE. TOO HYPER TECHNICAL OR LEGALISTIC APPROACH SHOULD BE AVOIDED IN LOOKING AT A PROVISION WHICH MUST BE EQUITABLY INTERPRETED AND JUSTLY ADMINISTERED. IT HAS FURTHER OBSERVED THAT COURTS SHOU LD PLACE AN INTERPRETATION MAKING A BENEVOLENT AND JUSTICE ORIENTED I NFERENCE AND THE FACTS MUST BE VIEWED IN THE SOCIAL MILIEU OF A COUNTRY. 9 ITA NO.449/PUN/2015 AY.NO.2011-12 6. WITH RESPECT TO THE INVESTMENT BEING HAD JOINTLY BY T HE ASSESSEE WITH HER HUSBAND, WE FIND THAT LD. CIT(A) HAS GIV EN A FINDING THAT THE PAYMENT WAS MADE FROM THE BANK ACCOUNT OF THE ASSESSEE, THE INVESTMENT WAS OUT OF HER OWN FUNDS AND A S A MATTER OF CONVENIENCE, THE APPLICATION WAS JOINTLY MADE BY THE AS SESSEE WITH HER HUSBAND. THE AFORESAID FINDINGS OF LD. CIT(A) HAS N OT BEEN CONTROVERTED BY REVENUE. WE ALSO FIND THAT THE HO NBLE KARNATAKA HIGH COURT IN THE CASE OF DIRECTOR OF I.T. IN TERNATIONAL TAX VS. MRS. JENNIFER BHIDE REPORTED IN (2012) 349 ITR 80 (KAR) HAS HELD THAT FOR THE PURPOSES OF SEC. 54/54EC, IT IS NOT NECESSARY THAT PURCHASE OF PROPERTY OR INVESTMENT IN SPECIFIED BOND S MUST BE IN THE NAME OF ASSESSEE ONLY. FURTHER, IT IS NOT THE CA SE OF REVENUE THAT THE HUSBAND OF ASSESSEE CONTRIBUTED ANY PORTION OF CONSIDERATION FOR THE ACQUISITION OF BONDS. BEFORE US, REVEN UE HAS NOT PLACED ANY MATERIAL TO SHOW THAT THE PROVISION OF SEC .54EC OF THE ACT REQUIRES THAT THE INVESTMENT IN SPECIFIED BONDS M UST BE IN THE NAME OF ASSESSEE ONLY. CONSIDERING THE TOTALITY OF TH E AFORESAID FACTS AND RELYING ON THE DECISIONS CITED HEREIN ABOVE, WE FIND NO REASON TO INTERFERE WITH THE ORDER OF LD.CIT(A) AND THUS THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISS ED. ORDER PRONOUNCED ON THE 3 RD DAY OF MARCH, 2017. SD/- SD/- ( VIKAS AWASTHY ) ( ANIL CHATURVEDI ) / JUDICIAL MEMBER ! / ACCOUNTANT MEMBER PUNE; ! DATED : 3 RD DAY OF MARCH, 2017. YAMINI 10 ITA NO.449/PUN/2015 AY.NO.2011-12 '#$%&'&$ / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3 . 4. 5. 6. CIT-CENTRAL, PUNE. CIT(A)- 11. #$% &&'(, * '(, / DR, ITAT, B PUNE; %+, - / GUARD FILE. / BY ORDER, // TRUE COPY // // TRUE COPY // // TRUE COPY // . /012 / ASSISTANT REGISTRAR, * '( , / ITAT, PUNE.