ITO 18(3)(2), MUMBAI V. PUSPALATA G. ADIK, MUMBAI

ITA 5008/MUM/2009

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 48454 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-04-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 30-03-2011
• Assessment Year: 2002-2003
• Appeal Filed On: 02-09-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AJIT KUMAR SINHA
• Section: 143(3); 54

Judgement Text

1 ITA NO. 5008/MUM/2009 ASSESSMENT YEAR : 2002-03. IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH C, MUMBAI BEFORE SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER & SHRI VIJAY PAL RAO, JUDICIAL MEMBER. I.T.A. NO. 5008/MUM/2009 ASSESSMENT YEAR : 2002-03. THE INCOME-TAX OFFICER, MRS. PUSHPALATA ADIK, WARD-18(3), MUMBAI. VS. SILVER SANDS APTS., 201, VIR SAVARKAR MARG, MAHIM, MUMBAI-400 016. AAGPA 5827M APPELLANT. RESPONDENT. APPELLANT BY : SHRI AJI T KUMAR SINHA. RESPONDENT BY: S HRI DINESH AHIR. O R D E R PER J. SUDHAKAR REDDY : THIS IS AN APPEAL FILED BY THE REVENUE DIRECTED A GAINST THE ORDER OF THE CIT(APPEALS)-XXVIII, MUMBAI DATED 16-06-2009 ON THE FOLLOWING GROUND: ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) ERRED IN DIRECTING THE A.O. TO ALLOW THE DEDUCTION U/S 54 EC AMOUNTING TO RS.20 LAKHS, IGNORING THE FACT THAT THE INVESTMENTS IN TH E REC BONDS WERE MADE AFTER THE COMPLETION OF SIX MONTHS FROM THE DATE OF TRANSFER. 2. THE FACTS ARE BROUGHT OUT AT PARA 4 OF THE ORDE R OF THE CIT(APPEALS) WHICH ARE EXTRACTED BELOW FOR READY REFERENCE: 2 ITA NO. 5008/MUM/2009 ASSESSMENT YEAR : 2002-03. 4. THE ONLY ISSUE IN THIS CASE IS REGARDING ALLOWA BILITY OF DEDUCTION U/S 54EC. THE FACTS OF THE ISSUE ARE, THE APPELLANT FIL ED RETURN OF INCOME FOR A.Y. 2002-03 ON 30.07.2002 DECLARING INCOME OF RS.5 ,02,400/-. THE SAME WAS ACCEPTED U/S. 143(3) VIDE ORDER DATED 29.11.200 4. THE COMMISSIONER OF INCOME TAX SET ASIDE THE ASSESSMENT U/S. 143(3) VID E HIS ORDER DATED 20.03.2007 U/S. 263. THE APPELLANT HAD SOLD PLOT OF LAND ON 24.09.2001 AND DERIVED INCOME OF RS.59,97,320/- BY WAY OF LONG TER M CAPITAL GAIN. THE APPELLANT INVESTED RS.20 LACS IN RURAL ELECTRIFICAT ION CORPORATION AUTHORITY OF INDIA BONDS BY ISSUING THE CHEQUE DATED 23.03.20 02. THE BONDS WERE ACTUALLY ALLOTTED ON 28.03.2002. THE A.O.S STAND I S THAT THE ASSESSEE SHOULD HAVE INVESTED THE SALE CONSIDERATION WITHIN 6 MONTH S FROM THE DATE OF TRANSFER. THE DATE OF TRANSFER BEING 24.09.2002. ON THIS GROUND, EXEMPTION U/S 54EC WAS DENIED. IT IS PERTINENT TO MENTION IN THE ORIGINAL ASSESSMENT ORDER U/S 143(3) THAT EXEMPTION U/S. 54EC WAS ALLOW ED. HOWEVER, IN VIEW OF THE DIRECTIONS OF THE CIT U/S 263, THE EXEMPTION WA S NOT ALLOWED IN ASSESSMENT U/S. 143(3) R.W.S. 263. 3. AFTER HEARING RIVAL CONTENTIONS, WE FIND THAT TH E ASSESSEE HAD IN FACT ISSUED A CHEQUE ON 23 RD MARCH, 2002 FOR INVESTMENT IN RURAL ELECTRIFICATIO N CORPN.OF INDIA BONDS. THE CHEQUE GOT ENCASHED ON 27-02-2002 AND TH E BONDS WERE ALLOTTED ON 28-3-2002. THE FIRST APPELLATE AUTHORITY RELIED ON THE CBDT CIRCULAR NO. 261 DATED 8-8-1979 WHEREIN IT IS DIRECTED THAT PAYMENT IS DEE MED TO HAVE BEEN MADE ON THE DATE ON WHICH IT WAS HANDED OVER TO THE GOVERNMENT BANKERS. AT PARA 4.5 THE CIT(APPEALS) HELD AS FOLLOWS : IN VIEW OF THE FACTS THAT THE APPELLANT HAD ISSUE D CHEQUE FOR 20 LACS ON 23.03.2002 WHICH WAS CLEARED IN HIS BANK ACCOUNT ON 27.03.2002 AND THE BONDS WERE ALLOTTED ON 28.03.2002 AND ALSO IN VIEW OF THE CBDT CIRCULAR NO. 261 DATED 08.08.1979 AND IN VIEW OF THE LEGAL P RECEDENTS, I AM OF THE OPINION THAT SEC. 54 CONFERRING THE BENEFIT OF EXEM PTION FROM LONG TERM IS TO BE INTERPRETED LIBERALLY AND NOT IN HYPERTECHNICAL FASHION. IN VIEW OF THIS DISCUSSION, THE A.O. IS DIRECTED TO ALLOW THE DEDUC TION U/S. 54EC TO THE APPELLANT. 3 ITA NO. 5008/MUM/2009 ASSESSMENT YEAR : 2002-03. WE AGREE WITH THESE FINDINGS AND DISMISS THE REVENU ES APPEAL. 4. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED ON THIS 8 TH DAY OF APRIL, 2011. SD/- SD/- (VIJAY PAL RAO) (J. SUDHAKAR RED DY) JUDICIAL MEMBER ACCOUNTAN T MEMBER MUMBAI, DATED: 8 TH APRIL, 2011. WAKODE COPY TO : 1. APPELLANT 2. RESPONDENT 3. C.I.T. 4. CIT(A) 5. DR, C-BENCH (TRUE COPY) BY ORDE R ASSTT. REGIST RAR, ITAT, MUMBAI BEN CHES