ASST CIT 18(1), MUMBAI V. SNEHALATA A NADKARNI L.R. OF LAE ARVIND P. NADKARNI, MUMBAI

ITA 6686/MUM/2012

• Counselvise Citation: 668619914 RSA 2012
• Duration Of Justice: 2 year(s) 7 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-07-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 08-01-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 02-11-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NEIL PHILIP
• Assessee Lawyers: SHRISHYAMNAGARSEKAR
• Keywords: Capital asset
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL E BENC H, MUMBAI BEFORE SHRI R.C. SHARMA, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER I.T.A. NO. 6686/M/2012 (AY 2009-2010 ) ACIT-18(1), 1 ST FLOOR, R.NO.116, PIRAMAL CHAMBER, LALBAUG, MUMBAI 400 012. / VS. SMT. SNEHALATA A. NADKARNI, L/R OF LATE ARVIND P. NADKARNI, 3 MANGALAYA, S.K. BOLE ROAD, NEAR PORTUGUESE CHURCH, DADAR (W), MUMBAI 400 028. ./PAN: AAMPN8829Q ( /APPELLANT) .. ( / RESPONDENT) C.O. NO.296/M/2013 (ARISING OUT OF I.T.A. NO. 6686/M/2012) (AY 2009-2010 ) SMT. SNEHALATA A. NADKARNI, L/R OF LATE ARVIND P. NADKARNI, 3 MANGALAYA, S.K. BOLE ROAD, NEAR PORTUGUESE CHURCH, DADAR (W), MUMBAI 400 028. / VS. ACIT-18(1), 1 ST FLOOR, R.NO.116, PIRAMAL CHAMBER, LALBAUG, MUMBAI 400 012. ./PAN: AAMPN8829Q ( /APPELLANT) .. ( / RESPONDENT) / ASSESSEE BY : SHRISHYAMNAGARSEKAR / REVENUEBY : SHRI NEIL PHILIP, DR /DATE OF HEARING : 01.07.2015 /DATE OF PRONOUNCEMENT : 01.07.2015 !' !' !' !' / O R D E R PER SANJAY GARG, JM: THE CAPTIONED APPEAL ITA NO.6686/M/2012 IS FILED BY THE REVENUE AND CROSS OBJECTION NO.296/M/2013 IS FILED BY THE ASSESSEE FO R THE ASSESSMENT YEAR 2009- 2010. SINCE, THE ISSUES RAISED IN BOTH THESE APPEAL S ARE INTER-CONNECTED, THEREFORE, FOR THE SAKE OF CONVENIENCE, THEY ARE CLUBBED, HEAR D TOGETHER AND ARE BEING 2 DISPOSED OF BY THIS CONSOLIDATED ORDER. APPEAL WIS E ADJUDICATION IS GIVEN IN THE FOLLOWING PARAGRAPHS OF THIS ORDER. ITA NO.6686/M/2012 (BY REVENUE) 2. THIS APPEAL FILED BY THE REVENUE ON 2.11.2012 IS AGAINST THE ORDER OF THE CIT (A)-29, MUMBAI DATED 14.8.2012. IN THIS APPEAL, RE VENUE RAISED THE FOLLOWING EFFECTIVE GROUND: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD CIT (A) HAS ERRED ON FACTS AND IN LAW BY ALLOWING THE DEDUCTION U/S 54EC IN RESPECT OF INVESTMENT MADE IN RURAL ELECTRIFICATION CORPORATIO N AND NHAI BONDS. SINCE, THE SALE OF PROPERTY TOOK PLACE ON 26.6.2008, THE BONDS SHOULD HAVE BEEN ACQUIRED BY 26.12.2008. THE BONDS WERE ALLOTTED TO THE ASSESSE E ON 31.12.2008, BEYOND THE SPECIFIC PERIOD OF SIX MONTHS, AND THEREFORE, DEDUC TION U/S 54EC WAS NOT ADMISSIBLE. 3. BRIEFLY STATED RELEVANT FACTS OF THE CASE ARE TH AT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF RUNNING OF RESORTS. ASSESSEE FILED THE RETURN OF INCOME DECLARING THE TOTAL INCOME OF RS.8,62,15,510/-. AO COMPLETED THE ASSESSMENT U/S 143(3) OF THE INCOME TAX ACT, 1961 AND THE ASSESSED INCOME WAS DET ERMINED AT RS. 9,40,74,371/. IN THE ASSESSMENT, AO MADE CERTAIN ADDITIONS AND A D ISALLOWANCE OF RS. 50 LAKHS U/S 54EC OF THE ACT IS ONE OF SUCH ADDITIONS AND THE SA ME IS THE SUBJECT MATTER OF APPEAL BEFORE US. BRIEF FACTS IN THIS REGARD ARE THAT DUR ING THE YEAR UNDER CONSIDERATION, ASSESSEE INVESTED AN AMOUNT OF RS. 50 LAKHS IN BOND S OF RURAL ELECTRIFICATION CORPORATION LTD (RECL) AND NATIONAL HIGHWAYS AUTHOR ITY OF INDIA (NHAI) (IERS. 25 LAKHS EACH IN RECL & NHAI) AND CLAIMED DEDUCTION U/S 54EC OF THE ACT. AFTER CONSIDERING THE ASSESSEES EXPLANATION IN THIS REGA RD, AO WAS OF THE OPINION THAT IN ORDER TO AVAIL DEDUCTION UNDER THE SAID SECTION 54E C OF THE ACT, INVESTMENT IN THE LONG TERM SPECIFIED ASSET SHOULD BE MADE WITHIN A P ERIOD OF SIX MONTHS AFTER THE DATE OF SUCH TRANSFER . CONSIDERING THE FACT THAT THE SAID BONDS WERE AL LOTTED AFTER SIX MONTHS FROM THE DATE OF TRANSFER OF THE LAND (LONG TERM CAPITAL ASSET), AO DENIED THE CLAIM OF DEDUCTION U/S 54EC OF THE ACT. BEING AGGR IEVED WITH THE DECISION OF THE AO, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE FI RST APPELLATE AUTHORITY. 4. THE FIRST APPELLATE AUTHORITY, AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, ALLOWED THE APPEAL BY RELYING ON THE JUDG MENT OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF HINDUSTAN UNILEVER LTD VS. DCI T (325 ITR 102) (BOM) WHICH IS 3 RELEVANT FOR THE PROPOSITION THAT FOR THE PURPOSE O F CLAIMING DEDUCTION U/S 54EC OF THE ACT, THE DATE OF INVESTMENT BY THE ASSESSEE MUST BE REGA RDED AS THE DATE ON WHICH THE PAYMENT WAS MADE AND RECEIVED BY THE BANK . ACCORDINGLY, CIT (A) DIRECTED THE AO TO GRANT EXEMPTION U/S 54EC OF THE ACT. AGGRIEVED WITH THE SAID DECISION OF THE CIT (A), REVENUE IS IN APPEAL BEFOR E THE TRIBUNAL BY RAISING THE ABOVE MENTIONED GROUND. 5. DURING THE PROCEEDINGS BEFORE US, THE LD. AR HEA VILY RELIED ON THE ORDER OF THE CIT (A) AND REITERATED THE SUBMISSIONS MADE BEFORE THE LOWER AUTHORITIES. FURTHER, HE ALSO RELIED ON THE DECISION OF THE SPECIAL BENCH, ITAT, AHMEDABAD IN THE CASE OF ALKABEN B. PATEL VS. ITO IN ITA NO.1973/AHD/2012, DATED 25.3.2014TO CONTEND THAT THE SIX MONTHS PERIOD IS TO BE RECKONED FROM T HE END OF THE MONTH IN WHICH THE TRANSFER OF CAPITAL ASSET TOOK PLACE AND FURTHER TH AT THE BONDS WERE ISSUED WITHIN THE PERIOD OF SIX MONTHS. 6. ON THE OTHER HAND, LD DR FOR THE REVENUE MERELY RELIED ON THE ORDER OF THE ASSESSING OFFICER. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE O RDERS OF THE REVENUE AUTHORITIES AS WELL AS THE CITED DECISION OF THE SP ECIAL BENCH, ITAT, AHMEDABAD IN THE CASE OF ALKABEN B. PATEL (SUPRA), WHEREIN IT HA S BEEN HELD THAT THE PROVISIONS OF SECTION 54EC BEING BENEFICIAL PROVISION, THE WORD MONTHLY OCCURRING IN THE PROVISION SHOULD BE CONSTRUED AS A CALENDAR MONTH A ND NOT IN BETWEEN AND THE RELEVANT DATE SHOULD BE TAKEN AS THE LAST DATE OF T HE MONTH FROM THE MONTH IN WHICH THE TRANSFER TOOK PLACE. THE ASSESSEE IN THIS CASE HAD MADE INVESTMENT ON 11.12.2008 BUT THE BONDS WERE ISSUED ON 31.12.2008. THE ISSUE IS SQUARELY COVERDBU THE DECISION OF THE HONBLE BOMBAY HIGH CO URT IN THE CASE OF HINDUSTAN UNILIVER LTD. VS DCIT 325 ITR 102(BOM.) AND FURTHER BY THE SPECIAL BENCH DECISION IN THE CASE OF ALKABEN B. PATEL (SUPRA). CONSIDERIN G THE SAME, WE ARE OF THE OPINION THAT THE CIT (A) HAS RIGHTLY ADJUDICATED THE ISSUE AND ALLOWED THE APPEAL AND IT DOES NOT CALL FOR ANY INTERFERENCE. ACCORDINGLY, THE SO LITARY GROUND RAISED BY THE REVENUE IS DISMISSED. 8. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. 4 C.O.NO.296/M/2012 (BY ASSESSEE) 9. THIS CROSS OBJECTION IS FILED BY THE ASSESSEE ON 31.12.2013 QUESTIONING THE AOS ACTION IN NOT APPRECIATING THE FACT THAT THE M OMENT PAYMENT IS DONE THROUGH THE BANK AND CREDITED TO THE RESPECTIVE ISSUERS AC COUNTS, THE AMOUNT STANDS INVESTED UNLESS THERE IS A CANCELLATION OF INVESTME NT BY THE RESPECTIVE ISSUER AND THAT THE SUBSEQUENT ALLOTMENT OF BONDS WAS ENTIRELY DUE TO ADMINISTRATIVE ISSUES AT THE ISSUERS END. 10. AT THE OUTSET, LD COUNSEL FOR THE ASSESSEE SUBM ITTED THAT THE PRESENT CROSS OBJECTION WAS FILED BEFORE THE TRIBUNAL BELATEDLY W ITH A DELAY OF 334 DAYS. HE HAS FURTHER MENTIONED THAT THE CROSS OBJECTION RAISED B Y THE ASSESSEE IS IN SUPPORT OF THE CIT (A)S ORDER. WE FIND THAT THE CROSS OBJECTION OF THE ASSESSEE DO NOT POINT ANY GRIEVANCE AGAINST THE ORDER OF THE CIT(A) RATHER IT IS FILED JUST TO SUPPORT THE ORDER OF THE CIT(A). MORE OVER WE HAVE ALREADY WHILE ADJUDI CATING THE REVENUES APPEAL IN THE ABOVE PARAGRAPHS OF THIS ORDER, UPHELD THE ORDE R OF THE CIT (A),. THUS THE CROSS OBJECTION RAISED BY THE ASSESSEE IS DISMISSED BEING NOT MAINTAINABLE. 11. CONCLUSIVELY, THE REVENUES APPEAL AS WELL AS T HE CROSS OBJECTION OF THE ASSESSEE ARE DISMISSED. ORDERWASPRONOUNCED IN THE OPEN COURT ON 01.07. 2015 . SD/- SD/- (R.C. SHARMA) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMB ER MUMBAI; #! $%& .10.2015 . ' . ./ OKK , SR. PS !''()*) !''()*) !''()*) !''()*) / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. + ( ) / THE CIT(A)- 4. + / CIT 5 5. ),-''./ , ./ , / DR, ITAT, MUMBAI 6. -012 / GUARD FILE. )' //TRUE COPY// !' !' !' !' / BY ORDER, 3 33 3 / 4 5 4 5 4 5 4 5 (DY./ASSTT.REGISTRAR) ./ ./ ./ ./ , / ITAT, MUMBAI