ITO 19(3)(5), MUMBAI V. VINAY DHARMSHI KHATAU, MUMBAI

ITA 816/MUM/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 6922 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-06-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 03-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M V RAJGURU
• Assessee Lawyers: D B SHAH
• Section: 143(3)

Judgement Text

AAYAK AAYAK AAYAK AAYAKR APILAIYA AIQ R APILAIYA AIQ R APILAIYA AIQ R APILAIYA AIQAKRNA AKRNA AKRNA AKRNA F FF F N N N NYAAYAPIZ YAAYAPIZ YAAYAPIZ YAAYAPIZ MAMUBA[ MAMUBA[ MAMUBA[ MAMUBA[- -- - MAO MAOMAO MAO. .. . IN THE INCOME TAX APPELLATE TRIBUNAL F BENCH, MUM BAI BEFORE SRI MAHAVIR SINGH, JM AND SRI G MANJUNATHA, AM AAYAKR APILA SA AAYAKR APILA SA AAYAKR APILA SA AAYAKR APILA SAM MM M . / ITA NO. 816/MUM/2017 ( INAQA-ARNA BAYA- / ASSESSMENT YEAR 2012-13) ITO, 19(3)(5), R.NO.201, MATRU MANDIR, MUMBAI-400 007 VS. VINAY DHARMSHI KHATAU, FLAT NO.7, 2 ND FLOOR, 114- BVP RD. EARTH ENCLAVE, R.K. WADI, MUMBAI-400 004. ( APILAAQA APILAAQA APILAAQA APILAAQAI II I - -- - / APPELLANT) .. ( P` P`P` P`%YAQAA %YAQAA %YAQAA %YAQAAI II I- -- - / RESPONDENT) PAN NO.AAEPK4172B REVENUE BY : M.V. RAJGURU, DR ASSESSEE BY : D.B. SHAH, AR DATE OF HEARING: 20.06.2018 DATE OF PRONOUNCEMENT : 20 - 06 - 2018 AADOSA AADOSA AADOSA AADOSA / O R D E R PER MAHAVIR SINGH, JM: THIS APPEAL BY THE REVENUE IS ARISING OUT OF THE OR DER OF COMMISSIONER OF INCOME TAX (APPEALS)-30, MUMBAI [IN SHORT CIT(A)], IN APPEAL NO. CIT(A)-30/19(3)(5)/911/2015-16 DATED 11. 11.2016. THE ASSESSMENT WAS FRAMED BY THE INCOME TAX OFFICER (19 )(3)(5), MUMBAI (IN SHORT ITO) FOR THE A.Y. 2012-13 VIDE ORDER DATED 18.3.2015 UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER TH E ACT). 2. THIS APPEAL BY REVENUE IS ARISING OUT OF THE ORD ER OF CIT(A) IN ALLOWING THE DOUBLE CLAIM UNDER SECTION 54EC OF THE ACT AMOUNTING 2 ITA NO. 816/MUM/2017 TO 1 CRORE AS AGAINST THE LIMIT OF 50 LAKHS IN THE PROVISIONS OF SECTION 54EC OF THE ACT. FOR THIS, REVENUE HAS RAI SED FOLLOWING GROUND NO.1: ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, WHETHER, THE LD. CIT(A) WAS JUSTIFIED IN ALLOW ING THE CLAIM OF THE ASSESSEE UNDER SECTION 54EC TOTALING T O 1,00,00,000/- WHEREAS AS PER THE SECOND PROVISO OF SECTION 54EC OF THE I.T. ACT, 1961, WHICH CAME INTO EFFECT FROM 1 ST APRIL 2015, THE LIMIT OF INVESTMENT UNDER SECTION 54EC DOES NOT EXCEEDS 50 LACS IN ANY F.Y. 3. WE HAVE HEARD THE RIVAL CONTENTIONS AND GONE THR OUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. FACTS OF THE C ASE ARE THAT ASSESSEE EARNED LONG TERM CAPITAL GAIN ON SALE OF T ENANCY RIGHTS IN AN IMMOVABLE PROPERTY JOINTLY HELD WITH OTHER CO-OW NERS AT 99,33,390/-. THE ASSESSEE CLAIMED EXEMPTION UNDER SECTION 54EC OF THE ACT FOR AN AMOUNT OF 50 LAKHS ON THE INVESTMENT MADE IN REC BONDS ON 31.3.2012 AND ALSO CLAIMED ANO THER AMOUNT OF DEDUCTION OF 50 LAKHS INVESTMENT MADE IN REC BONDS ON 30.4.2012. ACCORDING TO THE A.O., THE ASSESSEE IS ENTITLED TO CLAIM EXEMPTION 54EC OF THE ACT ONLY TO THE LIMIT O F 50 LAKHS ONCE. THE ASSESSING OFFICER ACCORDINGLY DISALLOWED THE CLAIM OF EXEMPTION AND RESTRICTED THE CLAIM TO 50 LAKHS. 4. AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE THE CIT(A). THE CIT(A) ALLOWED THE CLAIM OF ASSESSEE BY FOLLOWI NG TRIBUNAL DECISIONS AND ALSO THE DECISION OF HONBLE MADRAS H IGH COURT IN THE CASE OF CIT VS.SRIRAM INDUBAL IN T.C.(A) NO.419 & 533 OF 2014 DATED 15.9.2014. 3 ITA NO. 816/MUM/2017 5. AGGRIEVED, NOW REVENUE IS IN APPEAL BEFORE TRIBU NAL. 6. WE FIND FROM THE FACTS OF THE CASE THAT THE ASSE SSEE HAS INVESTED IN REC BONDS FIRST ON 31.3.2012 FOR AN AMO UNT OF 50 LAKHS AND AGAIN ON 30.4.2012 FOR 50 LAKHS. THE ASSESSEE CLAIMED EXEMPTION UNDER SECTION 54EC OF THE ACT FOR THIS AMOUNT OF 1 CRORE BEING INVESTMENT MADE IN REC BONDS IN TWO F INANCIAL YEARS BUT WITHIN THE PERIOD OF 6 MONTHS. WE FIND T HAT THE HONBLE MADRAS HIGH COURT IN THE CASE OF CIT VS. SRIRAM IND UBAL (SUPRA) HAS CONSIDERED THIS ISSUE AND OBSERVED AS UNDER: '10. THE LEGISLATURE HAS CHOSEN TO REMOVE THE AMBIG UITY IN THE PROVISO TO SECTION 54EC(1) OF THE ACT BY INSERTING A SECOND PROVISO WITH EFFECT FROM 1.4.2015. THE MEMORANDUM EXPLAINING THE PROVIS IONS IN THE FINANCE (NO.2) BILL, 2014 ALSO STATES THAT THE SAME WILL BE APPLICABLE FROM 1.4.2015 IN RELATION TO ASSESSMENT YEAR 2015-16 AND THE SUBSEQUENT YEARS. THE INTENTION OF THE LEGISLATURE PROBABLY AP PEARS TO BE THIS AMENDMENT SHOULD BE FOR THE ASSESSMENT YEAR 2015-20 16 TO AVOID UNWANTED LITIGATIONS OF THE PREVIOUS YEARS. EVEN OT HERWISE, WE DO NOT WISH TO READ ANYTHING MORE INTO THE FIRST PROVISO T O SECTION 54EC(1) OF THE ACT, AS IT STOOD IN RELATION TO THE ASSESSEES. 11. IN ANY EVENT, FROM A READING OF SECTION 54EC(1) AND THE FIRST PROVISO, IT IS CLEAR THAT THE TIME LIMIT FOR INVESTMENT IS S IX MONTHS FROM THE DATE OF TRANSFER AND EVEN IF SUCH INVESTMENT FALLS UNDER TW O FINANCIAL YEARS, THE BENEFIT CLAIMED BY THE ASSESSEE CANNOT BE DENIED. I T WOULD HAVE MADE A DIFFERENCE, IF THE RESTRICTION ON THE INVESTMENT IN BONDS TO RS.50,00,000/- IS INCORPORATED IN SECTION 54EC(1) O F THE ACT ITSELF. HOWEVER, THE AMBIGUITY HAS BEEN REMOVED BY THE LEGI SLATURE WITH EFFECT FROM 1.4.2015 IN RELATION TO THE ASSESSMENT YEAR 20 15-16 AND THE SUBSEQUENT YEARS. FOR THE FOREGOING REASONS, WE FIND NO INFIRMITY IN THE ORDERS PASSED BY THE TRIBUNAL WARRANTING INTERFERENCE BY THIS COURT. THE SUBSTANTIAL QUESTIONS OF LAW ARE ANSWERED AGAINST THE REVENUE A ND THESE APPEALS ARE DISMISSED. NO COSTS.' 4 ITA NO. 816/MUM/2017 7. AS THE ISSUE IS SQUARELY COVERED BY HONBLE MADR AS HIGH COURT DECISION, WE FIND NO FAULT IN THE ORDER CIT(A ). HENCE, THE SAME IS CONFIRMED. THE APPEAL OF THE REVENUE IS DI SMISSED. 8. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 20-06- 2018. AADOSA KI AADOSA KI AADOSA KI AADOSA KI GAAO GAAOGAAO GAAOYANAA KULAO MAO IDNAMK YANAA KULAO MAO IDNAMK YANAA KULAO MAO IDNAMK YANAA KULAO MAO IDNAMK 20.06.2018 KAO KI KAO KI KAO KI KAO KI GA[ GA[GA[ GA[- -- - . .. . SD/- SD/- SD/- SD/- (G MANJUNATHA) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 20-06- 2018 SUDIP SARKAR /SR.PS COPY OF THE ORDER FORWARDED TO : BY ORDER, ASSISTANT REGISTRAR ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT (A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//