AQUATECH ENGINEERS, MUMBAI V. ADDL CIT RG 18(1), MUMBAI

ITA 8029/MUM/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3502 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-06-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 13-06-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 30-11-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Capital asset

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUM BAI .. , ! , '# ' $ BEFORE SHRI I. P. BANSAL, JM AND SHRI SANJAY ARORA , AM ./ I.T.A. NO. 8029/MUM/2011 ( & ' (' & ' (' & ' (' & ' (' / / / / ASSESSMENT YEAR: 2008-09) AQUATECH ENGINEERS 302, UNIQUE INDUSTRIAL ESTATE, OFF. VEER SAVARKAR MARG, PRABHADEVI, MUMBAI-400 025 & & & & / VS. ADDL. CIT-18(1), C-10, 7 TH FLOOR, PRATYAKSHA KAR BHAVAN, BANDRA-KURLA COMPLEX, BANDRA (E), MUMBAI 400 051 ) '# ./ * ./ PAN/GIR NO. AAAFA 6767 G ( )+ / APPELLANT ) : ( ,-)+ / RESPONDENT ) )+ . ' / APPELLANT BY : SHRI KISHOR CHAUDHARI ,-)+ / . ' / RESPONDENT BY : SHRI MANOJ KUMAR & / 01# / // / DATE OF HEARING : 13.06.2013 2 ( / 01# / DATE OF PRONOUNCEMENT : 19.06.2013 '3 / O R D E R PER SANJAY ARORA, A. M.: THIS IS AN APPEAL BY THE ASSESSEE AGITATING THE ORD ER BY THE COMMISSIONER OF INCOME TAX (APPEALS)-29, MUMBAI (CIT(A) FOR SHORT ) DATED 07.09.2011, PARTLY ALLOWING THE ASSESSEES APPEAL CONTESTING ITS ASSES SMENT U/S.143(3) OF THE INCOME TAX ACT, 1961 (THE ACT HEREINAFTER) FOR THE ASSESSMEN T YEAR (A.Y.) 2008-09 VIDE ORDER DATED 24.12.2010. 2 ITA NO.8029/MUM/2011 (A.Y. 2008-09) AQUATECH ENGINEERS VS. ADDL. CIT 2.1 OPENING THE ARGUMENTS FOR AND ON BEHALF OF THE ASSESSEE, IT WAS SUBMITTED BY THE LD. AR, THE ASSESSEES COUNSEL, THAT THE SOLE ISSUE ARISING IN THE INSTANT APPEAL RELATES TO THE VALIDITY OF THE ASSESSEES CLAIM IN RESPECT OF LONG TERM CAPITAL GAINS (LTCG) U/S.54EC OF THE ACT, CLAIMED BY IT IN THE SUM OF RS .49,72,923/-. THE REVENUE HAS DENIED THE SAID CLAIM ON THE GROUND THAT THE INVESTMENT IN THE NATIONAL HIGHWAY AUTHORITY OF INDIA (NHAI) BONDS, ENTITLING IT TO DEDUCTION U/S.5 4EC, STOOD MADE BEYOND SIX MONTHS OF THE DATE OF TRANSFER, I.E., THE PERIOD SPECIFIED UN DER THE RELEVANT PROVISION, SO THAT THE ASSESSEES CLAIM IS NOT MAINTAINABLE IN LAW. THE RE LEVANT DATES, WHICH ARE NOT IN DISPUTE, ARE AS UNDER:- SR. NO. PARTICULARS DATE 1 DATE OF AGREEMENT 29.02.2008 2 CONSIDERATION RECEIVED ON 10.03.2008 3 APPLICATION FOR NHAI BONDS 21.05.2008 4 CHEQUE CLEARED ON 29.09.2008 5 DEEMED DATE OF ALLOTMENT 30.09.2008 THE DIFFERENCE ARISES ON TWO COUNTS. FIRSTLY, THE DATE FROM WHICH THE PERIOD OF SIX MONTHS IS TO BE RECKONED. WHILE THE ASSESSEE CONTEN DS IT TO BE AS 10.03.2008, I.E., THE DATE OF RECEIPT OF THE CONSIDERATION FOR TRANSFER ( OF THE LONG TERM CAPITAL ASSET), THE REVENUE ADOPTS THE SAID DATE AS 29.02.2008, I.E., T HE DATE OF THE AGREEMENT, AS THE TRANSFER U/S. 2(47) OF THE ACT OCCURRED ONLY ON THE SAID DAT E. TWO, WHILE THE REVENUE CONSIDERS THE PERIOD OF SIX MONTHS TO EXPIRE EXACTLY ON AUGUS T 31, 2008 ; THE SAME COMMENCING ON MARCH 01, 2008, I.E., THE DATE FOLLOWING THE DATE O F TRANSFER, AND EVEN CONSIDERING IT AS COMMENCING FROM THE DATE OF RECEIPT OF CONSIDERATIO N, ON 09.09.2008 , THE ASSESSEES STAND IS THAT THE PERIOD OF SIX MONTHS WOULD EXPIRE ONLY ON 30.09.2008 , I.E., THE DATE OF ALLOTMENT OF THE SAID BONDS, SO THAT ITS CLAIM IS V ALID IN LAW. THERE ARE, IT WAS CLAIMED BY HIM, DECISIONS BY THE TRIBUNAL ON BOTH THESE ASPECT S IN THE ASSESSEES FAVOUR. WITH REGARD TO THE FIRST ISSUE, I.E., THE DATE FROM WHICH THE SIX MONTH PERIOD IS TO RECKONED, HE WOULD RELY ON THE DECISION IN THE CASE OF CHANCHAL KUMAR SIRCAR VS. ITO [2012] 50 SOT 289 (KOLKATA) [16 ITR (TRIB) 91]; THE TRIBUNAL HOLDING THAT THE P ERIOD OF SIX MONTHS FOR THE PURPOSE OF DEPOSIT U/S.54EC SHOU LD BE RECKONED FROM THE DATE OF THE 3 ITA NO.8029/MUM/2011 (A.Y. 2008-09) AQUATECH ENGINEERS VS. ADDL. CIT ACTUAL RECEIPT OF THE CONSIDERATION IN ITS RESPECT. IN RESPECT OF THE SECOND ISSUE, HE RELIED ON THE DECISION IN THE CASE OF YAHYA E. DHARIWALA VS. DY. CIT [2012] 49 SOT 458 (MUM), WHEREIN THE TRIBUNAL HELD THAT THE WORD MON TH AS OCCURRING IN THE PROVISION, BEING NOT SPECIFIED, THE SAME WOULD NEED TO BE UNDE RSTOOD, IN TERMS OF SECTION 3(35) OF THE GENERAL CLAUSES ACT, 1897, AS PER THE BRITISH C ALENDAR, RELYING FOR THE PURPOSE ON THE DECISION IN THE CASE OF CIT VS. KADRI MILLS (COIMBATORE) LTD. [1977] 106 ITR 846 (MAD) AND CIT VS. BRIJLAL LOHIA AND MAHABIR PRASAD KHEMKA [1980] 124 ITR 485 (CAL.). 2.2 THE LD. DR, ON THE OTHER HAND, WOULD SUBMIT THA T WHILE THE ASSESSEE STATES OF HAVING APPLIED FOR THE NHAI BONDS ON 21.05.2008, TH E SAME WERE, IN FACT, NOT OPEN FOR SUBSCRIPTION AS ON THAT DATE, EVEN AS NOTED BY THE LD.CIT(A), AND WHICH FACT STANDS FURTHER CONFIRMED BY HIM (LD. DR) FROM THE INTERNET. THE AS SESSEES CLAIM IN THIS RESPECT IS, THEREFORE, WRONG. ON THE BENCH QUERYING HIM AS TO H OW IS THE SAME RELEVANT INASMUCH AS WHAT IS RELEVANT IS THE DATE ON WHICH THE AMOUNT IS INVESTED IN THE SPECIFIED ASSET, AND WHICH WOULD ONLY BE ON ITS ALLOTMENT, AND WHICH IS 30.09.2008, HE COULD NOT FURNISH ANY SATISFACTORY ANSWER. 3. WE HAVE HEARD THE PARTIES, AND PERUSED THE MATER IAL ON RECORD. 3.1 THE PRIMARY FACTS ARE NEITHER DISPUTED NOR DENI ED. THE ISSUE, AS APPARENT, HAS TWO LIMBS TO IT. FIRST, IS THE DATE OF TRANSFER, FOR WH ICH 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 ASSESSEES CASE (FOR CLAIMI NG BENEFIT U/S.54EC) WOULD STAND OUSTED AT THE VERY THRESHOLD. THE TRIBUNALS VIEW OF RECKO NING THE COMMENCEMENT DATE AS THE DATE OF RECEIPT OF THE CONSIDERATION, AS AGAINST TH E 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 THEREO F OUGHT TO BE TAKEN WHERE THE FACTS OTHERWISE ADMIT. IN THE INSTANT CASE, ON THE OTHER HAND, THE ASSESSEE HAS RECEIVED THE 4 ITA NO.8029/MUM/2011 (A.Y. 2008-09) AQUATECH ENGINEERS VS. ADDL. CIT PAYMENT WITHIN A PERIOD OF TEN DAYS. THE SAME, THOU GH ON A SOMEWHAT HIGHER SIDE, INASMUCH AS A PAYMENT BY BANK INSTRUMENT WOULD ORDI NARILY STAND TO BE EFFECTED/CLEARED WITHIN TWO TO THREE WORKING DAYS, THE TIME LAG CANN OT 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 CASE 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 OUT FLOW OF FUNDS AS THE RELEVANT DATE OF INVESTMENT (IN SPECIFIED ASSET U/S.54EC), I T MUST, ON THE PRINCIPLE OF PARITY, ALSO TAKE THE DATE OF RECEIPT OF CONSIDERATION, ALLOWING A TIME LAG OF TWO TO THREE WORKING DAYS, I.E., AS IN THE NORMAL COURSE OF BANKING BUSI NESS, FOR THE SAME (RECEIPT). AS SUCH, THE RELEVANT DATE WOULD BE UPON ALLOWING THE NORMAT IVE TIME REQUIRED FOR THE REALIZATION OF FUNDS THROUGH THE BANKING CHANNEL. WE DRAW SUPPO RT OR THIS PROPOSITION FROM S.27 OF THE GENERAL CLAUSES ACT, 1897. THE DATE OF THE AGRE EMENT BEING 29.02.2008, I.E., THE LAST DATE OF THE MONTH OF FEBRUARY, THE DATE OF RECEIPT WOULD - IN THE ORDINARY AND REGULAR COURSE - FALL SOME TIME IN THE FIRST WEEK OF MARCH, 2008, I.E., EVEN IF WE DO NOT CONSIDER THE DATE OF THE ACTUAL RECEIPT AS BEING DATE OF REC EIPT IN THE NORMAL COURSE, BEING SANS ANY DETAILS IN THE MATTER BY THE ASSESSEE AND, THUS, NO T RELEVANT. 3.2 THE SECOND COMPONENT OF THE CONTROVERSY STANDS DETERMINED BY THE CO-ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF YAHYA E. DHARIWALA (SUPRA), WHEREIN, BEING GUIDED BY THE FACT THAT THE PROVISION OF SECTION 54EC IS A BENEFICIAL PROVISION, IT SOUGHT TO GRANT THE BENEFIT OF DOUBT WITH REGARD TO THE WORD MONTH OCCURRING IN THE PROVISION, BY CONSTRUING IT AS A CALENDAR MONTH; THE WORD BEING U NDEFINED. A PERIOD OF SIX CLEAR MONTHS FROM THE FIRST WEEK OF MARCH, 2008, WOULD, THEREFOR E, END ONLY 30.09.2008, I.E., THE DATE OF ALLOTMENT OF THE NHAI BONDS. 3.3 IN THIS VIEW OF THE MATTER, THE ASSESSEES CASE WOULD WARRANT BEING ACCEPTED, WHICH WE ARE INCLINED TO IN THE FACTS AND CIRCUMSTA NCES OF THE CASE, INCLUDING THE DECISIONS BY THE CO-ORDINATE BENCHES OF THE TRIBUNA L IN THE MATTER. WE DECIDE ACCORDINGLY. 5 ITA NO.8029/MUM/2011 (A.Y. 2008-09) AQUATECH ENGINEERS VS. ADDL. CIT 4. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED. 4 05 & '40 / 60 / 0 78 ORDER PRONOUNCED IN THE OPEN COURT ON JUNE 19, 2013 '3 / 2 ( #' 9&5:& 19, 2013 / ? SD/- SD/- (I. P. BANSAL) (SANJAY ARORA) / JUDICIAL MEMBER '# / ACCOUNTANT MEMBER MUMBAI; 9& DATED : 19.06.2013 .&../ ROSHANI , SR. PS '3 / ,0@ A'@(0 '3 / ,0@ A'@(0 '3 / ,0@ A'@(0 '3 / ,0@ A'@(0/ COPY OF THE ORDER FORWARDED TO : 1. )+ / THE APPELLANT 2. ,-)+ / THE RESPONDENT 3. B ( ) / THE CIT(A) 4. B / CIT CONCERNED 5. @E? ,0& , , / DR, ITAT, MUMBAI 6. ?F' G / GUARD FILE '3& '3& '3& '3& / BY ORDER, H HH H/ // /7 7 7 7 (DY./ASSTT. REGISTRAR) , , , , / ITAT, MUMBAI