RATI ANIL VIRWANI, MUMBAI V. ACIT 11(1), MUMBAI

ITA 817/MUM/2013

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 8294 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-12-2014
• Appeal Filed By: Assessee
• Bench Allotted: D
• Next Hearing Date: 27-11-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 31-01-2013
• Court: TRIBUNAL
• Assessee Lawyers: IN CIRCUMSTANCES OF CA SE
• Keywords: Capital asset; Retrospective amendment; Additional evidence; Benefit of exemption

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI NARENDRA KUMAR BILLAIYA, ACCOUNTANT MEMBER ITA NO.817/MUM/2013 ASSESSMENT YEAR: - 2008-09 MRS. RATI ANIL VIRWANI PEN HOUSE LEVEL, TOP LEVEL, STERLING SEA FACE, B WING DR. A.B. ROAD, WORLI, MUMBAI 400 018. VS.` ACIT 11(1) MUMBAI. APPELLANT RESPONDENT ORDER PER VIJAY PAL RAO, JM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 19.11.2012 OF CIT(A) FOR THE A.Y. 2008-09. THE ASSESSEE HAS RAISE D FOLLOWING GROUNDS:- 1 WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) WAS JU STIFIED IN UPHOLDING THE ASSESSING OFFICERS ADDITION OF RS. 50,00,000/- ON ACCOUNT OF LONG TERM CAPITAL GAIN BY DISALLOWING EXEMPTION U/S 54. 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) WAS JU STIFIED IN UPHOLDING THE ASSESSING OFFICERS ADDITION TO TOTAL INCOME OF RS. 5,00,000/- ON ACCOUNT OF SUNDRY CREDITOR OUTSTANDING. 2. GROUND NO. 1 IS REGARDING RESTRICTING THE DEDUCTI ON U/S 54EC TO RS. 50,00,000/-. ASSESSEE BY SHRI VIMAL PUNMIYA REVENUE BY SHRI JEETENDRA KUMAR DATE OF HEARING 27.11.2014 DATE OF PRONOUNCEMENT 10.12.2014 ITA NO.817/MUM/2013 ASSESSMENT YEAR: - 2008-09 2 | P A G E 3. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSE E SOLD THE RESIDENTIAL FLAT AND EARNED LONG TERM CAPITAL GAIN OF RS. 1,08,9 4,526/-. THE ASSESSEE CLAIMED DEDUCTION U/S 54EC OF THE INCOME TAX ACT OF RS. 1,00,00,000/- ON ACCOUNT OF INVESTMENT IN SPECIFIED ASSET BEING REC BONDS OF RS. 50,00,000/-ON 5.2.2008 AND FURTHER RS. 50,00,000/- ON 20.07.2008. THE ASSESSING OFFICER RESTRICTED THE DEDUCTION TO THE TUNE OF RS. 50,00, 000/- AS PER THE PROVISO TO SECTION 54EC(1) AS WELL AS, AS PER THE CBDTS CIRCU LAR NO. 3 OF 2008, WHEREIN THE QUANTUM OF INVESTMENT IN SPECIFIED BONDS WAS BE ING LIMITED TO 50,00,000/-. THE ASSESSEE CHALLENGED THE ACTION OF THE ASSESSING OFFICER BEFORE THE CIT(A). THE CIT(A) CONFIRMED THE ACTION OF ASSE SSING OFFICER AND HELD THAT THE PROVISO TO SECTION 54EC(1) CLEARLY LAID DOWN TH AT THERE IS A CEILING OF INVESTMENT IN SPECIFIED ASSETS TO THE EXTENT OF RS. 50,00,000/-. 4. BEFORE US, THE LD. AUTHORIZED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT THE CEILING PROVIDED UNDER PROVISO TO SECTION 54EC IS ONLY FOR THE INVESTMENT OF RS. 50,00,000/- IN A PARTICULAR FINAN CIAL YEAR. SINCE THE ASSESSEE HAS INVESTED 50,00,000 EACH IN TWO DIFFERENT FINANC IAL YEARS AND ALSO COMPLIED WITH THE CONDITIONS FOR MAKING INVESTMENT WITHIN TH E PERIOD OF SIX MONTHS FROM THE SALE OF RESIDENTIAL HOUSE, THEREFORE, THE ASSESSEE IS ENTITLED FOR DEDUCTION OF FULL AMOUNT OF INVESTMENT UP TO ONE CR ORE. THE LD. AUTHORIZED REPRESENTATIVE HAS FURTHER SUBMITTED THAT TO REMOVE THE AMBIGUITY IN THE EXISTING PROVISIONS OF SECTION 54EC(1) OF THE ACT, THE LEGISLATURE HAS INSERTED A SECOND PROVISO W.E.F 1.4.2015. THEREFORE, THE AMEND ED PROVISIONS OF SECTION 54EC ARE NOT APPLICABLE IN THE CASE OF THE ASSESSEE FOR THE A.Y. UNDER CONSIDERATION AND AS PER THE EXISTING PROVISIONS, T HE ASSESSEE IS ENTITLED FOR DEDUCTION TO THE EXTENT OF RS. 50,00,000 EACH FINA NCIAL YEAR IF THE INVESTMENT IS MADE WITHIN A PERIOD OF SIX MONTHS FROM THE DATE OF SALE OF ASSET. IN SUPPORT OF HIS CONTENTION HE HAS RELIED UPON THE DECISION O F HONBLE MADRAS HIGH COURT ITA NO.817/MUM/2013 ASSESSMENT YEAR: - 2008-09 3 | P A G E DATED 15.09.2014 IN THE CASE OF CIT VS. C. JAICHANDER IN TCA NO. 419 & 533 OF 2014 AND SUBMITTED THAT THE HONBLE HIGH COURT HAS HELD THAT THE PROVISIONS OF SECTION 54EC(1) MANDATES THE TIME LIM IT FOR INVESTMENT AS SIX MONTHS AND THE BENEFIT THAT FLOWS FROM THE FIRST P ROVISO IS AVAILABLE TO THE EXTENT OF RS. 50 LAC IN ANY FINANCIAL YEAR. EVEN IF SUCH INVESTMENT FALLS UNDER THE TWO FINANCIAL YEARS, THE BENEFIT CLAIMED BY THE ASSESSEE CANNOT BE DENIED. THE HON'BLE HIGH COURT AFTER CONSIDERING THE LATEST AMENDMENT IN THE PROVISIONS W.E.F 1.4.2015 HAS CONFIRMED THE DECISIO N OF TRIBUNAL IN ALLOWING THE DEDUCTION TO THE EXTENT OF RS. 50 LAC FOR EACH FINANCIAL YEAR IF THE INVESTMENT IS MADE WITHIN A PERIOD OF SIX MONTHS. H E HAS ALSO RELIED UPON THE DECISION OF THIS TRIBUNAL IN THE CASE OF MRS. LILAVATI M. SAYANI VS. ITO [2014] 49 TAXMANN.COM 579 (MUMBAI - TRIB.) AND SUBMITTED THAT AN IDENTICAL ISSUE HAS BEEN DECIDED BY THE TRIBUNAL IN FAVOUR OF THE ASSESSEE. 5. ON THE OTHER HAND, THE LD. DR HAS RELIED UPON TH E ORDERS OF AUTHORITIES BELOW AND SUBMITTED THAT THE CBDT CIRCULAR NO. 3 OF 2008 HAS CLARIFIED THE PROVISIONS OF SECTION 54EC AND THE LIMIT OF RS. 50 LAC IN THE SPECIFIED BONDS FOR THE PURPOSE OF ALLOWING THE DEDUCTION. HE HAS RELI ED UPON THE DECISION OF HONBLE MADRAS HIGH COURT IN THE CASE OF AREVA T&D (INDIA) LTD. VS. ACIT [2009] 177 TAXMAN 192 (MAD.) AS WELL AS THE DECISION OF JAIPUR BENCHES OF THIS TRIBUNAL IN THE CASE OF ASSISTANT COMMISSIONER OF INCOME-TAX VS. SHRI RAJ KUMAR JAIN & SONS (HUF)* 20 ITR (TRIB.) 21 2. 6. IN REBUTTAL, THE LD. AUTHORIZED REPRESENTATIVE O F THE ASSESSEE HAS SUBMITTED THAT THE DECISION IN THE CASE OF AREVA T& D (INDIA) LTD. VS. ACIT (SUPRA) IS NOT ON THE ISSUE OF TOTAL DEDUCTION ALLO WABLE TO THE ASSESSEE U/S 54EC BUT HE SAID DECISION WAS ON A WRIT PETITION CH ALLENGING THE VALIDITY OF AMENDMENT OF FINANCE ACT. 2007. THEREFORE, THE SAID DECISION IS NOT ITA NO.817/MUM/2013 ASSESSMENT YEAR: - 2008-09 4 | P A G E APPLICABLE AS FAR AS THE QUANTUM OF ALLOWABILITY OF DEDUCTION FOR INVESTMENT IN SPECIFIED BONDS U/S 54EC IS CONCERNED. HE HAS FU RTHER SUBMITTED THAT IN THE CASE OF ASSISTANT COMMISSIONER OF INCOME-TAX VS . SHRI RAJ KUMAR JAIN & SONS (HUF) (SUPRA), THE JAIPUR BENCHES OF THE TRI BUNAL HAS FOLLOWED THE JUDGMENT OF HONBLE MADRAS HIGH COURT IN THE CASE O F AREVA T&D (INDIA) LTD. VS ACIT (SUPRA), WHICH IS NOT ON THE POINT OF ISSUE INVOLVED IN THE PRESENT APPEAL. THUS THE LD. AUTHORIZED REPRESENTAT IVE HAS SUBMITTED THAT IN VIEW OF THE LATEST DECISION OF HONBLE MADRAS HI GH COURT IN THE CASE OF CIT VS. C. JAICHANDER & ANOTHER (SUPRA), THE CLAIMO F THE ASSESSEE IS ALLOWABLE. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND RELE VANT MATERIAL ON RECORD. THE CONTROVERSY BEFORE US IS LIMITED TO THE EXTENT OF QUANTUM OF DEDUCTION U/S 54EC WHETHER IT IS RESTRICTED TO RS. 50 LAC OR NOT . THERE IS NO DISPUTE THAT THE ASSESSEE HAS MADE THE INVESTMENT O F RS. 1 CRORE WITHIN A PERIOD OF SIX MONTHS AS PROVIDED U/S 54EC(1). THE S AID INVESTMENT HAS BEEN MADE BY THE ASSESSEE OF RS. 50 LAC EACH IN TWO FINA NCIAL YEARS. WE FIND THAT AN IDENTICAL ISSUE HAS BEEN CONSIDERED BY THE HONB LE MADRAS HIGH COURT IN THE CASE OF CIT VS. C. JAICHANDER & ANOTHER IN THE JUDGMENT DATED 15.09.2014 (SUPRA). IN THE SAID CASE, THE QUESTION FELL FOR CONSIDERATION OF HONBLE HIGH COURT WAS AS UNDER:- 2. THESE APPEALS WERE ADMITTED ON THE FOLLOWING SU BSTANTIAL QUESTIONS OF LAW: (I) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE TRIBUNAL WAS RIGHT IN HOLDING THAT THE ASSESSEE IS ELIGIBLE FOR DEDUCTION OF RS. 1 CRORE UNDER SECTION 54EC, IN RES PECT OF INVESTMENT OF RS. 50 LAKHS MADE IN TWO DIFFERENCE F INANCIAL YEARS.? (II) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE TRIBUNAL WAS RIGHT IN NOT REFERRING THE MATTER TO T HE SPECIAL BENCH UNDER SECTION 255(4), WHEN THERE ARE CONFLICT ING VIEWS BY DIFFERENT BENCHES ? ITA NO.817/MUM/2013 ASSESSMENT YEAR: - 2008-09 5 | P A G E 8. THE HONBLE HIGH COURT WHILE UPHOLDING THE DECIS ION OF CHENNAI BENCHES OF THIS TRIBUNAL HELD IN PARA 7 AS UNDER:- 7. ON A PLAIN READING OF THE ABOVE SAID PROVISION, WE ARE OF THE VIEW THAT SECTION 54EC(1) OF THE ACT RESTRICTS THE TIME LIMIT FOR THE PERIOD OF I INVESTMENT AFTER THE PROPERTY HAS BEEN SOLD TO SIX MONTHS. THERE IS NO CAP ON THE INVESTMENT TO BE MAD E IN BONDS. THE FIRST PROVISO TO SECTION 54EC(1) OF THE ACT SPECIFI ES THE QUANTUM OF INVESTMENT AND IT STATES THAT THE INVESTMENT SO MAD E ON OR AFTER 1.4.2007 IN THE LONG-TERM SPECIFIED ASSET BY AN ASS ESSEE DURING ANY FINANCIAL YEAR DOES NOT EXCEED FIFTY LAKH RUPEES. I N OTHER WORDS, AS PER THE MANDATE OF SECTION 54EC(1) OF THE ACT, THE TIME LIMIT FOR INVESTMENT IS SIX MONTHS AND THE BENEFIT THAT FLOWS FROM THE FIRST PROVISO IS THAT IF THE ASSESSEE MAKES THE INVESTMEN T OF RS.50,00,000/- IN ANY FINANCIAL YEAR, IT WOULD HAVE THE BENEFIT OF SECTION 54EC(1) OF THE ACT. 9. THUS IT IS CLEAR THAT AS PER THE EXISTING PROVIS IONS OF SECTION 54EC THE CEILING ON THE INVESTMENT TO BE MADE IN SPECIFIED B ONDS IS FOR A PARTICULAR FINANCIAL YEAR. THE FIRST PROVISO TO SECTION 54EC(1 ) STIPULATES THE QUANTUM OF INVESTMENT IN SPECIFIED BONDS AFTER 1.4.2007 IN A PARTICULAR FINANCIAL YEAR SHALL NOT EXCEED RS. 50 LAC. THE MEANING OF THE PRO VISO TO SECTION 54EC(1) AS UNDERSTOOD BY THE HON'BLE HIGH COURT IS THAT THE LI MIT FOR INVESTMENT IS SIX MONTHS AND THE BENEFIT THAT FLOWS FROM THE FIRST PR OVISO IS AVAILABLE TO THE ASSESSEE IF THE INVESTMENT IS MADE OF RS. 50 LAC IN ANY FINANCIAL YEAR. THE HON'BLE HIGH COURT AFTER TAKING INTO CONSIDERATION THE NOTE ON CLAUSE OF FINANCE BILL 2014 AND MEMORANDUM EXPLAINING THE PRO VISIONS OF FINANCE BILL 2014, WHEREBY, A SECOND PROVISO HAS BEEN INSER TED IN THE STATUTE HAS OBSERVED IN PARA 10 AND 11 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 PR OVISO WITH EFFECT FROM 1.4.2015. THE MEMORANDUM EXPLAINING THE PROVISIONS IN THE FINANCE (NO.2) OF 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 APPEARS T O BE THAT 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 ITA NO.817/MUM/2013 ASSESSMENT YEAR: - 2008-09 6 | P A G E 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 SIX 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) OF THE ACT ITSEL F. HOWEVER, THE AMBIGUITY HAS BEEN REMOVED BY THE LEGISLATURE WITH EFFECT FROM 1.4.2015 IN RELATION TO THE ASSESSMENT YEAR 2015-16 AND THE SUBSEQUENT YEARS. 10. WE NOTE THAT THE DECISION RELIED UPON BY THE LD . DR IN THE CASE OF AREVA T&D (INDIA) LTD. VS. ACIT (SUPRA), IS ON THE POINT OF CONSTITUTIONAL VALIDITY OF THE NOTIFICATION NO. 380 OF 2006 DATED 22.12.2006 VIDE WHICH THE CENTRAL GOVERNMENT HAS RESTRICTED THE AMOUNT OF INVESTMENT IN NOTIFIED BONDS TO AVAIL THE BENEFIT OF EXEMPTION U/S 54EC. T HEREFORE, THE DECISION WAS NOT ON THE QUESTION OF TOTAL EXEMPTION AVAILABL E TO THE ASSESSEE. EVEN OTHERWISE THE SAID NOTIFICATION BECOME INFRUCTUOUS WHEN THE PROVISIONS OF SECTION 54EC WERE AMENDED SUBSEQUENTLY BY FINANCE A CT., 2007 AND ACCORDINGLY THE HON'BLE HIGH COURT DISMISSED THE WR IT PETITION CHALLENGING THE NOTIFICATION. THEREFORE, THE SAID DECISION IS W ILL NOT HELP THE CASE OF REVENUE. IN THE CASE OF MRS. LILAVATI M. SAYANI VS. ITO (SUPRA), THE COORDINATE BENCH OF THIS TRIBUNLA HAS DECIDED AN ID ENTICAL ISSUE IN PARA 5 AS UNDER:- 5. WE HAVE HEARD THE ARGUMENTS OF BOTH SIDES AND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. AS SUBMITTED BY LEARNED COUNSEL FOR THE ASSESSEE, THE ISSUE INVOLVED IN THE APPEAL OF T HE ASSESSEE IS SQUARELY COVERED BY VARIOUS DECISIONS OF THE TRIBUNAL. IN ON E OF SUCH DECISIONS RENDERED IN THE CASE OF ASPI GINWALA, SHREE RAM ENG G. & MFG INDUSTRIES V. ASSTT. CIT [2012] 52 SOT 16/20TAXMANN.COM 75 (AHD) , THE AHMEDABAD BENCH OF THE INCOME-TAX APPELLATE TRIBUNA L HELD THAT THE PROVISION OF SECTION 54EC MAKES IT CLEAR THAT WHERE THE ASSESSEE TRANSFERS IT CAPITAL ASSET AFTER THE 30TH SEPTEMBER OF THE FI NANCIAL YEAR, HE GETS AN OPPORTUNITY TO MAKE AN INVESTMENT OF RS. 50 LAKHS E ACH IN TWO DIFFERENT FINANCIAL YEARS AND IS ABLE TO CLAIM EXEMPTION UP T O RS. 1 CRORE UNDER SECTION 54EC OF THE ACT. THE TRIBUNAL OBSERVED THAT THE LANGUAGE OF THE PROVISO IS CLEAR AND UNAMBIGUOUS AND RELIED ON THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF IPCA LABORATORY LTD. V . DY. CIT [2004] 266 ITA NO.817/MUM/2013 ASSESSMENT YEAR: - 2008-09 7 | P A G E ITR 521/135 TAXMAN 594 TO HOLD THAT SINCE THE WORDING OF THE PROVISO TO SECTION 54EC IS CLEAR, THE BENEFITS WHICH ARE AVAIL ABLE TO THE ASSESSEE CANNOT BE DENIED. IN HIS IMPUGNED ORDER, THE LEARNE D COMMISSIONER OF INCOME-TAX (APPEALS) HAS RELIED ON THE DECISION OF THE HON'BLE MADRAS HIGH COURT IN THE CASE OF AREVA T & D INDIA LTD. V. ASSTT. CIT [2010] 326 ITR 540/[2009] 177 TAXMAN 192 . IN THE CASE OF COROMANDEL INDUSTRIES (P.) LTD. V. ASSTT. CIT [2013] 145 ITD 171/36 TAXMANN.COM 6 , THE CHENNAI BENCH OF THE TRIBUNAL, HOWEVER, HELD THAT THE DECIS ION OF THE HON'BLE MADRAS HIGH COURT IN THE CASE OF AREVA T & D INDIA LTD. (SUPRA) WAS RENDERED IN THE CONTEXT OF WRIT PETITION FILED BY T HE ASSESSEE CHALLENGING THE AMENDMENT TO SECTION 54EC OF THE ACT BY THE FIN ANCE ACT, 2007, WITH RETROSPECTIVE EFFECT FROM APRIL 1, 2006 AND THE SAM E THEREFORE WAS NOT APPLICABLE IN THE CONTEXT OF INTERPRETATION OF PROV ISO TO SECTION 54EC OF THE ACT WHICH ALLOWED THE DEDUCTION TO THE ASSESSEE IN RESPECT OF INVESTMENT OF RS. 50 LAKHS MADE IN THE ELIGIBLE BONDS IN TWO DIFF ERENT FINANCIAL YEARS. AT THE TIME OF HEARING, THE LEARNED DEPARTMENTAL REPRE SENTATIVE HAS SUBMITTED THAT THE DECISION OF THE JAIPUR BENCH OF THE INCOME-TAX APPELLATE TRIBUNAL IN THE CASE OF ASSTT. CIT V. RAJ KUMAR JAIN & SONS (HUF) [2012] 50 SOT 213/19 TAXMANN.COM 27 IS IN FAVOUR OF THE REVENUE ON THIS ISSUE. HOWEVER, AS RIGHTLY SUBMITTED BY LEA RNED COUNSEL FOR THE ASSESSEE, THE SAID DECISION OF THE JAIPUR BENCH OF THE INCOME-TAX APPELLATE TRIBUNAL HAS ALREADY BEEN CONSIDERED BY THE BANGALO RE BENCH OF THE INCOME-TAX APPELLATE TRIBUNAL IN ITS DECISION RENDE RED IN THE CASE OF VIVEK JAIRAZBHOY V. DY. CIT (I.T. APPEAL NO. 236 (BANG.) OF 2012, DATED 14-12- 2012) WHEREIN THE TRIBUNAL FOLLOWED THE DECISION OF THE AHMEDABAD BENCH OF THE INCOME-TAX APPELLATE TRIBUNAL IN THE CASE OF ASPI GINWALA, SHREE RAM ENGG. & MFG INDUSTRIES (SUPRA) KEEPING IN VIEW THE CENTRAL BOARD OF DIRECT TAXES CIRCULAR NO. 3/2008, DATED MARCH 12, 2 008 ([2008] 299 ITR (ST.) 8) AND THE PRINCIPLES LAID DOWN BY THE HON'BL E SUPREME COURT. IN OUR OPINION, THIS ISSUE THUS IS SQUARELY COVERED IN FAV OUR OF THE ASSESSEE BY VARIOUS DECISIONS OF THE TRIBUNAL AS DISCUSSED ABOV E AND RESPECTFULLY FOLLOWING THE SAME, WE DIRECT THE ASSESSING OFFICER TO ALLOW THE CLAIM OF THE ASSESSEE FOR EXEMPTION UNDER SECTION 54EC OF TH E ACT. GROUND NO. 2 IS ACCORDINGLY ALLOWED. 11. IN VIEW OF THE JUDGMENT OF HONBLE MADRAS HIGH COURT IN THE CASE OF CIT VS. C. JAICHANDER & ANOTHER (SUPRA), WE HOLD TH AT AS PER THE UN AMENDED PROVISIONS OF SECTION 54EC, THE ASSESSEE IS ENTITLED FOR DEDUCTION OF RS. 1 CRORE, WHEN THE ASSESSEE HAS SATISFIED BOT H THE CONDITIONS OF THE INVESTMENT IN SPECIFIED BONDS OF RS. 50 LAC IN EACH FINANCIAL YEAR AND THE SAID INVESTMENT IS WITHIN THE PERIOD OF SIX MONTHS. ITA NO.817/MUM/2013 ASSESSMENT YEAR: - 2008-09 8 | P A G E 12. GROUND NO. 2 IS REGARDING ADDITION OF RS. 5,00, 000/- ON ACCOUNT OF SUNDRAY CREDITORS OUTSTANDING. 13. THE ASSESSING OFFICER NOTED THAT THE ASSESSEE H AS FOLLOWED CASH SYSTEM OF ACCOUNTING. THE ASSESSEE HAS AN OUTSTANDI NG OF RS. 17,61,000/-. THE ASSESSEE WAS ASKED TO EXPLAIN AS TO HOW THESE A RE SUNDRY CREDIT BALANCES OUTSTANDING IN THE CASH SYSTEM OF ACCOUNTI NG. THE ASSESSEE EXPLAINED THAT OUT OF THE TOTAL BALANCES OF RS. 17.6 1 LACS AS UM OF RS. 12.61 LACS IS IN THE NATURE OF A TEMPORARY LOAN GIVEN BY HER HUSBAND AND PRODUCED DETAILS OF THE SAME. THE ASSESSING OFFICER ACCEPTED THE SAID EXPLANATION AND MADE THE ADDITION OF BALANCE AMOUNT OF RS. 5,00,000/- FOR WANT OF EXPLANATION. 14. THE ASSESSEE CHALLENGED THE ACTION OF ASSESSING OFFICER AND SUBMITTED BEFORE CIT(A) THAT THE AMOUNT OF RS. 5,00,000/- REP RESENTED AN ADVANCE RECEIPT TOWARDS SALE OF SHOP AT PUNE FOR WHICH THE ASSESSEE FILED SOME ADDITIONAL EVIDENCE WHICH WERE SENT TO THE ASSESSIN G OFFICER FOR EXAMINATION AND REMAND REPORT. IN THE REMAND REPORT THE ASSESSING OFFICER STATED THAT THE ASSESSEE HAS FAILED TO PRODUCE ANY EVIDENCE IN SUPPORT OF THE CLAIM THAT THE SAID AMOUNT WAS RECEIVED AS AN ADVAN CE FOR SALE OF SHOP. THE ASSESSEE CLAIMED BEFORE ASSESSING OFFICER IN THE RE MAND PROCEEDINGS THAT THE SALE WAS NOT MATERIALIZED AND THE SAID AMOUNT O F RS. 5,00,000/- HAS BEEN OFFERED AS INCOME IN THE A.Y. 2010-11. THE CIT (A) AFTER CONSIDERING THE REMAND REPORT HAS CONFIRMED THE ADDITION MADE BY A SSESSING OFFICER. 15. WE HAVE HEARD THE LD. AR AS WELL AS LD. DR AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. THE ASSESSEE HAS REITE RATED ITS EXPLANATION AND CONTENTION THAT RS. 5,00,000/- WAS RECEIVED AS AN A DVANCE FOR SALE OF SHOP AT PUNE. SINCE THE SALE TRANSACTION DID NOT MATERIA LIZE, THEREFORE, THE SAID AMOUNT WAS OFFERED TO TAX FOR A.Y. 2010-11. EXCEPT THE SUBMISSIONS, NO ITA NO.817/MUM/2013 ASSESSMENT YEAR: - 2008-09 9 | P A G E EVIDENCE HAS BEEN PRODUCED BY THE ASSESSEE THAT TH E AMOUNT WAS RECEIVED AS AN ADVANCE FOR SALE OF SHOP. FURTHER WHEN THE AM OUNT WAS NOT REPAID AND FINALLY OFFERED BY THE ASSESSEE FOR THE A.Y. 2010-1 1, THE ASSESSEE HAS FAILED TO EXPLAIN THE CASH CREDIT TO THE EXTENT OF RS. 5,00,0 00/-. ACCORDINGLY, WE DO NOT FIND ANY ERROR OR ILLEGALITY IN THE ORDERS OF A UTHORITIES BELOW QUA THIS ISSUE. 16. IN THE RESULT APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 10 TH DAY OF DECEMBER 2014. SD/- SD/- (N.K. BILLAIYA) (VIJAY PAL RAO) (ACCOUNTANT MEMBER/ YS[KK LNL; YS[KK LNL; YS[KK LNL; YS[KK LNL; ) (JUDICIAL MEMBER/ U;KF;D LNL; U;KF;D LNL; U;KF;D LNL; U;KF;D LNL; ) MUMBAI DATED 10-12-2014 SKS SR. P.S, COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. THE DR, D BENCH, ITAT, MUMBAI BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCHES, MUMBAI