Appeal Details
Counselvise Citation
[2016] 132 COUNSELVISE.COM (IT) 2937 (ITAT-MUMBAI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 year(s) 7 month(s) 3 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
24-06-2016
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
E
Assessment Year
2008-2009
Appeal Filed On
20-11-2014
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI E BENCH, MUMBAI BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER, AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER. ITA. NO. 7054/MUM/2014 (ASSESSMENT YEAR:2008-09) MR. SHIVKUMAR MIRCHANDANI 8-A, 3 RD FLOOR, MOUNT EMINENCE, GAMADIA ROAD, MUMBAI 400026 APPELLA NT VS. INCOME TAX OFFICER 16(2)(2), MUMBAI RESPONDENT PAN: AABPM2099L /BY APPELLANT : SHRI VIJAY MEHTA, A.R. /BY RESPONDENT : SHRI VINOD KUMAR, D.R. /DATE OF HEARING : 16.06.2016 /DATE OF PRONOUNCEMENT : 24.06.2016 ORDER PER SHAILENDRA KUMAR YADAV, J.M: THIS APPEAL HAS BEEN FILED BY ASSESSEE AGAINST THE ORDER OF COMMISSIONER OF INCOME-TAX (APPEALS)-27, MUMBAI, DATED 04.09.2014 FOR A.Y. 2008-09 ON FOLLOWING GROUNDS: 1. THE LEARNED CIT(APPEALS) HAS ERRED IN NOT TREAT ING THE ASSESSMENT ORDER PASSED BY ASSESSING OFFICER BEYOND THE TIME OF LIMITATION THEREFORE BAD AT LAW. ITA NO.7054/MUM/14 A.Y. 08-09 [MR. SHIVKUMAR MIRCHA NDANI VS.ITO] PAGE 2 2. THE LEARNED CIT(APPEALS) ERRED IN RESTRICTING APPELLANTS CLAIM UNDER SECTION 54EC IN RESPECT OF INVESTMENT IN NHAI BONDS OF RS.1,00,00,000/- TO RS.50,00,000/- ONLY. 2. AT THE OUTSET OF HEARING, LD. AUTHORIZED REPRESE NTATIVE DID NOT PRESS GROUND NO.1. SO, SAME IS DISMISSED A S NOT PRESSED. 3. THE ISSUE BEFORE IS WITH REGARDS TO RESTRICTING ASSESSEES CLAIM U/S.54EC IN RESPECT OF INVESTMENT IN NHAI OF RS.10,00,00,000/- TO RS.50,00,000/-. ASSESSEE IS A N INDIVIDUAL DERIVING INCOME FROM LONG TERM CAPITAL G AIN ON SALE OF PROPERTY, BANK INTEREST AND DIVIDEND INCOME. TH E RETURN OF INCOME FOR A.Y. 2008-09 WAS FILED ON 14.05.2009 DECLARING TOTAL INCOME OF RS.1,06,392/- AND RETURN WAS ASSESS ED U/S.143(3) OF THE ACT. DURING ASSESSMENT PROCEEDIN GS, ASSESSING OFFICER OBSERVED THAT ASSESSEE EARNED LON G TERM CAPITAL GAIN ON SALE OF PROPERTY AMOUNTING TO RS.97 ,68,255/-. THE SAID PROPERTY WAS SOLD ON 15 TH NOVEMBER, 2007. ASSESSEE INVESTED RS.50 LACS IN NHAI BONDS ON 19 TH MARCH 2008 AND ANOTHER RS.50 LACS IN NHAI BONDS ON 31 ST MAY, 2008. THUS, ASSESSEE CLAIMED ENTIRE LONG TERM CAPI TAL GAIN AS EXEMPTION U/S. 54EC OF THE ACT. IN ORIGINAL RET URN OF INCOME, LONG TERM CAPITAL GAIN WAS SHOWN AS NIL. AS SESSEES CASE WAS REOPENED. AS STATED ABOVE, THE SECOND INV ESTMENT IN NHAI BOND WAS MADE ON 31 ST MAY 2008. THE SAID INVESTMENT WAS REQUIRED TO BE MADE WELL WITHIN THE 6 MONTHS FROM THE END ON MONTH IN WHICH PROPERTY WAS SOLD. A SSESSING ITA NO.7054/MUM/14 A.Y. 08-09 [MR. SHIVKUMAR MIRCHA NDANI VS.ITO] PAGE 3 OFFICER COMPLETED ASSESSMENT U/S.143(3) R.W.S.147 O F THE ACT RESTRICTING THE EXEMPTION U/S.54EC OF THE ACT TO RS .50 LACS INTER ALIA STATING THAT AS PER PROVISIONS OF SECTIO N 54EC, ASSESSEE WAS ENTITLED TO MAXIMUM DEDUCTION OF RS.50 LACS FOR INVESTMENT MADE IN A PARTICULAR FINANCIAL YEAR INSTEAD OF RS.1 CRORE AS CLAIMED BY ASSESSEE. SAME WAS DISALL OWED AND CIT(A) CONFIRMED THE SAME. 4. BEFORE US, LD. AUTHORIZED REPRESENTATIVE DREW OU R ATTENTION TO THE DECISION OF HONBLE MADRAS HIGH CO URT IN CASE OF CIT VS. C. JAICHANDER [2015] 370 ITR 579 (M AD.), WHEREIN IT WAS HELD AS UNDER: THE ASSESSEE SOLD A PROPERTY FOR A SALE CONSIDERAT ION OF RS.3,46,50,000 AND INVESTED RS.1 CRORE OUT OF THE S ALE PROCEEDS IN CERTAIN BONDS IN TWO FINANCIAL YEARS, N AMELY, RS.50 LAKHS IN RURAL ELECTRIFICATION CORPORATION BO NDS IN THE FINANCIAL YEAR 2007-08 AND RS. 50 LAKHS IN NATI ONAL HIGHWAYS HAI BOND IN THE FINANCIAL YEAR 2008-09. TH E ASSESSING OFFICER, FOR THE ASSESSMENT YEAR 2008-09, HELD THAT THE ASSESSEE COULD TAKE THE BENEFIT OF INVESTM ENT IN SPECIFIED BONDS UP TO A MAXIMUM OF RS. 50 LAKHS ONL Y UNDER SECTION 54EC(1) AND ACCORDINGLY, HELD THAT TH E OTHER SUM RS. 50 LAKHS INVESTED OVER AND ABOVE THE CEILING PRESCRIBED DID NOT QUALIFY FOR EXEMPTION. THE COMMISSIONER (APPEALS) CONFIRMED THE ORDER OF THE ASSESSING OFFICER. THE TRIBUNAL HELD THAT THE EXEMP TION GRANTED UNDER THE PROVISO TO SECTION 54EC(1) SHOULD BE CONSTRUED NOT TRANSACTION-WISE BUT FINANCIAL YEAR-W ISE. IF AN ASSESSEE WAS ABLE TO INVEST A SUM OF RS. 50 LAKH S EACH IN TWO DIFFERENT FINANCIAL YEARS, WITHIN A PERIOD O F SIX MONTHS FROM THE DATE OF TRANSFER OF THE CAPITAL ASS ET, IT COULD NOT BE SAID TO BE INADMISSIBLE. ON APPEALS: HELD, DISMISSING THE APPEALS, THAT THE ASSESSEE WAS ENTITLED TO EXEMPTION OF RS. 1CRORE UNDER SECTION 5 4EC, IN ITA NO.7054/MUM/14 A.Y. 08-09 [MR. SHIVKUMAR MIRCHA NDANI VS.ITO] PAGE 4 RESPECT OF INVESTMENT OF RS. 50 LAKHS MADE IN TWO D IFFERENT FINANCIAL YEARS. 4.1 HONBLE MADRAS HIGH COURT IN CASE OF CIT VS. COROMANDEL INDUSTRIES LTD. [2015] 370 ITR 586 (MAD) HELD THAT ASSESSEE WILL BE ENTITLED FOR LONG TERM CAPITA L GAIN, EVEN IF, INVESTMENT IS FALLING UNDER TWO FINANCIAL YEARS . IN VIEW OF THIS, WE ARE NOT IN AGREEMENT WITH FINDING OF CIT(A ) ON THE GROUND THAT ASSESSEE HAS INVESTED AMOUNTS IN TWO FI NANCIAL YEARS. WE ARE AWARE THE AMENDMENT ON THE ISSUE IS PERSPECTIVE NOT RETROSPECTIVE. ASSESSING OFFICER I S DIRECTED ACCORDINGLY. 5. AS A RESULT, APPEAL FILED BY ASSESSEE IS ALLOWED . PRONOUNCED IN THE OPEN COURT ON THIS THE 24 TH DAY OF JUNE, 2016. SD/- SD/- ( RAJESH KUMAR ) (SHAILENDRA KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBE R MUMBAI: DATED 24/06/2016 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- 1. / REVENUE 2. / ASSESSEE 3. %&%'( ) / CONCERNED CIT 4. )- / CIT (A) 5.-./00'(, '( , %& / DR, ITAT, MUMBAI 6./4567 / GUARD FILE. BY ORDER / , / % , '( , %&
