SHEELA DUDEJA, MUMBAI V. ITO WD 18(3)(4), MUMBAI

ITA 5300/MUM/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 8812 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-09-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 13-09-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 12-07-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR MANJUNATH KANKIHALLI
• Assessee Lawyers: D M SATHE
• Keywords: Deduction for capital gain
• Section: 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH E MUMBAI BEFORE SHRI DINESH KUMAR AGARWAL, JUDICIAL MEMBER A ND SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER ITA NO.5300/MUM/2011 ASSESSMENT YEAR-2007-08 SMT. SHEELA DUDEJA, 10/14 VIVEKANAND, CHS, T.H. KATARIA MARG, MAHIM, MUMBAI-400 016 PAN-AASPD 1203A VS. THE ITO, WARD 18(3)(4), PIRMAL CHAMBERS, PAREL, MUMBAI (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI D.M. SATHE RESPONDENT BY: DR. MANJUNATH KANKIHALLI DATE OF HEARING :24.09.2012 DATE OF PRONOUNCEMENT:26.09.2012 O R D E R PER N.K. BILLAIYA, AM: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF LD. CIT(A)- 29, MUMBAI DT. 20.5.2011 PERTAINING TO ASSESSMENT Y EAR 2007-08. 2. THE SUM AND SUBSTANCE OF THE ASSESSEES GRIEVANC E IS THAT THE ASSESSING OFFICER ERRED IN DISALLOWING THE EXEMPTIO N OF RS. 5,50,000/- FOR INVESTMENT U/S. 54EC OF THE ACT. 3. THE FACTS GIVING RISE TO THIS GRIEVANCE SHOW THA T FOR THE YEAR UNDER CONSIDERATION, THE ASSESSEE FILED ITS RETURN OF INC OME ON 24.9.2008 DECLARING INCOME FROM HOUSE PROPERTY AND INCOME FROM OTHER SO URCES. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFF ICER FOUND THAT THE ASSESSEE HAS SOLD A PROPERTY FOR RS. 19,50,000/- ON 15.6.2006. THE ASSESSEE HAS INVESTED RS. 13 LACS TOWARDS PURCHASE OF A NEW RESIDENTIAL FLAT AND ITA NO. 5300/M/2011 2 CLAIMED DEDUCTION U/S. 54 OF THE ACT. THE ASSESSEE SUBSEQUENTLY PURCHASED RECL BONDS AMOUNTING TO RS. 5,50,000/- ON 31.7.2007 AND CLAIMED DEDUCTION U/S. 54EC OF THE ACT. 4. HOWEVER, THE AO WAS OF THE OPINION THAT AS PER T HE PROVISIONS OF SECTION 54EC OF THE ACT, THE ASSESSEE OUGHT TO HAVE PURCHASED CAPITAL GAIN EXEMPTION BONDS WITHIN 6 MONTHS FROM THE DATE OF SA LE OF PROPERTY WHICH HAS GIVEN RISE TO CAPITAL GAINS AND IN THE INSTANT CASE AS THE PROPERTY WAS SOLD ON 15.6.2006, THE ASSESSEE OUGHT TO HAVE PURCH ASED CAPITAL GAIN EXEMPTION BONDS BEFORE 15.12.2006 WHICH SHE HAS FAI LED AS THE SAME WERE PURCHASED ON 31.7.2007. THE AO SOUGHT CLARIFICATIO N IN THIS REGARD FROM THE ASSESSEE TO WHICH THE ASSESSEE REPLIED THAT SHE COU LD NOT PURCHASE THE BONDS AS THE BONDS WERE NOT AVAILABLE IN THE MARKET . HOWEVER, THE SUBMISSION OF THE ASSESSEE WAS REJECTED BY THE AO W HO WENT ON TO DISALLOW THE CLAIM OF EXEMPTION U/S. 54EC AND ADDED RS. 5,30 ,963/- AS INCOME FROM CAPITAL GAINS. 5. THE MATTER WAS CARRIED OVER BEFORE THE LD. CIT(A ) BUT WITHOUT ANY SUCCESS. BEFORE US, THE LD. COUNSEL FOR THE ASSESSE E SUBMITTED THAT THE ASSESSEE WAS NOT IN A POSITION TO PURCHASE THE BOND S ON OR BEFORE THE DUE DATE AS THE SAME WERE NOT AVAILABLE IN THE MARKET A ND AS SOON AS THE BONDS WERE AVAILABLE, THE ASSESSEE PURCHASED THE SAME. T HE LD. DEPARTMENTAL REPRESENTATIVE STRONGLY SUPPORTED THE FINDINGS OF T HE LOWER AUTHORITIES AND SUBMITTED THAT THE ASSESSEE HAS GROSSLY VIOLATED TH E CONDITIONS LAID DOWN U/S. 54EC OF THE ACT. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF LOWER AUTHORITIES. THE UNDISPUTED FACT IS THAT THE PROPE RTY WAS SOLD ON 15.6.2006 FOR A CONSIDERATION OF RS. 19,50,000/-. OUT OF WH ICH THE ASSESSEE HAS BEEN ALLOWED EXEMPTION U/S. 54 AS SHE HAS PURCHASED A NE W RESIDENTIAL FLAT FOR RS. 13,00,000/-. THE ONLY POINT OF DISPUTE IS THAT THE INVESTMENT IN CAPITAL GAIN EXEMPTION BOND PURCHASED ON 31.7.2007. THE CONTENT ION OF THE ASSESSEE IS ITA NO. 5300/M/2011 3 THAT THE BONDS WERE NOT AVAILABLE IN THE MARKET CAN NOT BRUSHED ASIDE LIGHTLY AS THE CBDT WAS WELL AWARE OF THE FACT AND THEREFOR E IT CAME OUT WITH A NOTIFICATION NO. S.O. 964(E) DT. 29.6.2006. THE CBD T AFTER CONSIDERING THE HARDSHIPS FACED BY THE TAXPAYERS EXTENDED THE DATE OF PURCHASE OF BONDS UPTO 31.3.2007. HOWEVER, THE SAID SERIES OF BONDS WAS OPEN ONLY FOR A SHORT PERIOD OF 70 DAYS. THE ASSESSEE MISSED THIS SERIES . HOWEVER, WHEN THE NEXT SERIES WAS AVAILABLE, THE ASSESSEE IMMEDIATELY PURCHASED BONDS AMOUNTING TO RS. 5,50,000/- ON 31.7.2007. LEX NOT C OGIT IMPOSSIBILA (LAW DOES NOT COMPEL A MAN TO DO THAT WHICH SHE CANNOT P OSSIBLY PERFORM) AND IMPOSSIBILUM NULLA OBLIGNTO EST (LAW DOES NOT EXPEC T A PARTY TO DO THE IMPOSSIBLE) ARE WELL KNOWN MAXIMS IN LAW AND WOULD SQUARELY APPLY TO THE PRESENT CASE. THE ASSESSEE COULD DO WHATEVER WAS POSSIBLE AT THAT POINT IN TIME. 7. THE MOST IMPORTANT AND UNDISPUTED FACT IS THAT T HE ASSESSEE INVESTED IN THE CAPITAL GAIN BONDS BEFORE FILING THE RETURN OF INCOME. CONSIDERING THE PECULIAR CIRCUMSTANCES AND THE FACTS IN TOTALITY, W E ARE OF THE OPINION THAT INVESTMENT IN THE CAPITAL GAIN BONDS BEFORE FILING THE RETURN OF INCOME WOULD SERVE THE LEGISLATIVE INDENT. ACCORDINGLY, THE FIN DINGS OF THE LD. CIT(A) ARE REVERSED. THE AO IS DIRECTED TO ALLOW THE CLAIM OF THE ASSESSEE FOR EXEMPTION U/S. 54EC OF THE ACT TO THE TUNE OF RS. 5 ,50,000/-. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE I S ALLOWED. ORDER PRONOUNCED ON THIS 26 TH DAY OF SEPTEMBER, 2012 SD/- SD/- (DINESH KUMAR AGARWAL) (N.K. BILLAIYA ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED 26 TH SEPTEMBER, 2012 RJ ITA NO. 5300/M/2011 4 COPY TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT-CONCERNED 4. THE CIT(A)-CONCERNED 5. THE DR E BENCH TRUE COPY BY ORDER ASSTT. REGISTRAR, I.T.A.T, MUMBAI