ANCHALA SHASHIPAL KHANNA, MUMBAI V. ASST CIT RG 20(1), MUMBAI

ITA 8566/MUM/2011

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 71551 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-11-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 31-10-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 19-12-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAVED AKHTAR
• Assessee Lawyers: N H GAJARIA

Judgement Text

, , ,, , INCOME TAX APPELLATE TRIBUNAL,MUMBAI - A BENCH. . .. . . .. . , ,, , / !'# !'# !'# !'# , ' ' ' ' BEFORE S/SH. B.R. MITTAL, JUDICIAL MEMBER & RAJENDR A, ACCOUNTANT MEMBER /. ITA NO.8566/MUM/2011, $ $ $ $ % % % % / ASSESSMENT YEAR-2008-09 ANCHALA SHASHIPAL KHANNA 704, SWASTIK, AZAD CROSS ROAD, OFF VEERA DESAI ROAD, ANDHERI (EAST) MUMBAI-400053 VS ACIT 20(1), MUMBAI. PAN: AUSPK6795N ( &' / APPELLANT) ( ()&' / RESPONDENT) $*+ $*+ $*+ $*+ , , , , ' '' ' / APPELLANT BY : SHRI N.H.GAJARIA ! - , ' / REVENUE BY : SHRI JAVED AKHTAR $ $ $ $ - -- - +. +. +. +. / DATE OF HEARING : 31-10-2013 /0% - +. / DATE OF PRONOUNCEMENT : 06-11-2013 $ $ $ $ , 1961 - -- - 254 )1( ' '' ' +1+ +1+ +1+ +1+ '2 '2 '2 '2 ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA, AM: CHALLENGING THE ORDER DATED 25.10.2011 OF CIT(A)-31 ,MUMBAI,ASSESSEE HAS FILED FOLLOWING GROUNDS OF APPEAL: 1. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF CLAIM OF RS. 50,00,000/- BEING INVESTMENT MADE IN C APITAL GAIN EXEMPTION BONDS U/S 54EC OF THE INCOME TAX ACT, 1961. 2. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) HAS ERRED IN TAKING THE DATE OF SALE TRANSACTION AS 05.05.2007 INSTEAD OF THE DATE OF SALE AS 08.05. 2007 AND DRAWING CONCLUSION THAT THE INVESTMENT MADE IN BONDS IS OUT OF THE PERIOD OF SI X MONTHS. 3. YOUR APPELLANT REQUEST LEAVE TO ADD, ALTER OR MODIF Y THE GROUNDS OF APPEAL, IF SO REQUIRED. EFFECTIVE GROUND OF APPEAL IS ABOUT DISALLOWANCE OF CLAIM OF RS. 50 LACS INVESTED IN BONDS AGAINST THE LONG TERM CAPITAL GAIN (LTCG) AS PROVIDED U/S 5 4EC OF THE ACT FOR DELAY IN MAKING THE SAID INVESTMENT. 2. ASSESSEE, AN INDIVIDUAL, FILED HER RETURN OF INCOME ON 29.01.2009 DECLARING TOTAL INCOME OF RS. 38.54 LACS.ASSESSMENT WAS FINALISED BY THE ASSESSIN G OFFICER (AO) ON 30.11.2010 DETERMINING THE TOTAL INCOME OF RS. 88.54 LACS. DURING THE ASSE SSMENT PROCEEDINGS, AO FOUND THAT ASSESSEE HAD SHOWN LTCG OF RS. 1.12 CRORES OUT OF THE SAME C ONSIDERATION OF RS. 1.13 CRORES, THAT ASSESSEE HAD SOLD A FLAT LOCATED AT ANDHERI,THAT TH E ASSESSEE HAD CLAIMED EXEMPTION U/S 54EC OF RS. 50 LACS FROM THE CAPITAL GAIN ON INVESTMENT IN BONDS ISSUED BY THE NATIONAL HIGHWAY AUTHORITY OF INDIA (NHAI), THAT THE BONDS OF NHAI W ERE ALLOTTED TO THE ASSESSEE ON 30.11.2007. AO HELD THAT AS PER THE PROVISIONS OF SECTION 54EC ASSESSEE HAD TO INVEST AMOUNT OF LTCG AT ANY TIME WITHIN A PERIOD OF 6 MONTHS AFTER THE DATE OF TRANSFER OF PROPERTY,THAT PROPERTY WAS TRANSFERR - ED BY HER ON 05.05.2007, THAT INVESTMENT MADE BY HE R IN NHAI BOND WAS NOT MADE WITHIN THE 2 ITA NO. 8566/MUM/2001 ANCHALA SHASHIPAL KHANNA . STIPULATED TIME PERIOD.FINALLY, HE DENIED THE BENEF ITS OF SECTION 54EC OF THE ACT AO MADE AN ADDITION OF RS. 50 LACS TO THE INCOME OF THE ASSESS EE. 3. ASSESSEE PREFERRED AN APPEAL BEFORE THE FAA. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND THE ASSESSMENT ORDER, FAA HELD THAT ASSESSEE HA D SOLD HER FLAT ON 05.05.2007 FOR A CONSIDERATION OF RS. 1.31 CRORES, SHE HAD MADE INVE STMENT AT RS. 50 LACS IN TAX SAVING BONDS OF NHAI ON 08.11.2007, THAT ASSESSEE HAD CLAIMED, DURI NG THE ASSESSMENT PROCEEDINGS THAT CHEQUE FOR PURPOSE OF PURCHASING OF BONDS WERE ISSUED ON 0 6.11.2007, THAT ASSESSEE DID NOT FURNISH ANY DOCUMENTARY EVIDENCE OF ABOUT ISSUING OF CHEQUE ON 04.11.2007, THAT IT WAS CLEARED BY NHAI ON 10.11.2007, THAT INVESTMENT MADE IN THE PURCHASE OF TAX SAVING BONDS WITHIN THE MEANING OF PROVISIONS OF SECTION 54EC OF THE ACT WAS AFTER THE PERIOD OF 6 MONTHS OF THE TRANSFER OF THE PROPERTY/FLAT, THAT AO WAS FULLY JUSTIFIED IN HOLDI NG THAT ASSESSEE HAD FAILED TO SATISFY THE BASIC CONDITIONS ENVISAGED BY SECTION 54EC OF THE ACT. FI NALLY, HE DISMISSED THE APPEAL OF THE ASSESSEE HOLDING THAT ASSESSEE HAD MADE INVESTMENT IN BONDS AFTER THE STIPULATED PERIOD. 4. BEFORE US, AUTHORISED REPRESENTATIVE(AR) SUBMITTED THAT THERE WAS DELAY OF ONLY ONE DAY,THAT CHEQUE WAS ISSUED ON 04.11.2007,THAT SECTION 54EC O F THE ACT WAS PART OF BENEVOLENT LEGISLATION, THAT INVESTMENT IN NHAI WAS NEVER DOUBTED BY THE AO /FAA, THAT FOR THE PURPOSE OF SECTION 54EC OF THE ACT PERIOD OF 6 MONTHS HAD TO BE RECKONED F ROM THE END OF THE MONTH IN WHICH TRANSFER TOOK PLACE.HE REFERRED TO THE ORDER OF THE G BENC H OF MUMBAI TRIBUNAL DELIVERED ON 25.11. 2001 IN THE CASE OF YAHYA E.DHARIWALA (17 TAXMANN.C OM 159).HE ALSO RELIED UPON THE JUDGMENTS OF HONBLE HIGH COURTS OF PUNJAB & HARIYANA AND RAJ ASTHAN GUJARAT IN THE CASE OF HARNAND RAI RAMANAND 24 TAXMAN 571 AND S.L.M.MANIKLAL INDUSTRIE S LTD.DEPARTMENTAL REPRESENTATIVE (DR) RELIED UPON THE JUDGMENT OF HONBLE HIGH COURT OF A LLAHABAD IN THE CASE OF LAXMI RATTAN COTTON MILLS CO. LTD.(97ITR 285). 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US, THE BASIC ISSUE TO BE DECIDED IN THE CASE UNDER CONSIDERATION IS THE WORD S USED IN SECTION 54EC OF THE ACT I.E. WITHIN A PERIOD OF 6 MONTHS AFTER THE DATE OF TRANSFER OF PR OPERTY.AO AND FAA WERE OF THE OPINION THAT SIX MONTHS WOULD END ON 180 TH DAY OF THE TRANSACTION.AS PER THE ASSESSEE WORDS U SED IN THE ABOVE REFERRED SECTION TALKS OF A PERIOD OF SIX MONTHS. W E FIND THAT WHILE DECIDING THE MATTER OF LAXMI RATTAN COTTON MILLS CO. LTD. (SUPRA) HONBLE ALLAHA BAD HIGH COURT HAD HELD AS UNDER: THE WORD 'MONTH' OCCURRING IN SECTION 271(1)(A) MU ST BE TAKEN TO MEAN A PERIOD OF THIRTY DAYS. SECTION 271(1)(A) WAS ENACTED FOR THE PURPOSE OF IM POSING A PENALTY ON AN ASSESSEE WHO HAS NOT FILED HIS RETURNS WITHIN THE PRESCRIBED TIME AND IT S OBJECT WAS TO SERVE AS A DETERRENT FOR SUCH LAPSES. PENALTY IS IMPOSABLE FOR EVERY MONTH DURING WHICH THE DEFAULT CONTINUES. IF THE MEANING ASCRIBED TO THIS WORD IN THE GENERAL CLAUSES ACT, I .E., IF THE ENGLISH CALENDAR MONTH IS ADOPTED, IT MAY IN SOME CASES LEAD TO A DEFAULTING ASSESSEE ESC APING PENALTY ALTOGETHER. FOR EXAMPLE, IF THE TIME GIVEN TO AN ASSESSEE TO FILE HIS RETURNS IS UP TO THE 31ST OF JANUARY OF A PARTICULAR YEAR AND HE FILES IT ON THE 27TH OF FEBRUARY, HE WOULD NOT BE L IABLE TO PAY ANY PENALTY. SUCH A RESULT IS NOT CONTEMPLATED BY THE SUB-SECTION. THE SUB-SECTION IN CLEAR AND UNAMBIGUOUS TERMS MAKES EVERY ASSESSEE LIABLE FOR PENALTY DURING THE PERIOD OF DE FAULT. IN THE CIRCUMSTANCES, 'MONTH' SHOULD BE TAKEN TO MEAN A PERIOD OF THIRTY DAYS AND NOT AN EN GLISH CALENDAR MONTH. WE FURTHER FIND THAT IN THE CASES OF S.L.M. MANIKLA L INDUSTRIES LTD. (SUPRA) AND HARNAND RAI RAMANAND HONBLE HIGH COURTS OF GUJARAT AND RAJASTH AN HAS TAKEN A CONTRARY VIEW.HONBLE HIGH COURT OF GUJARAT HAS NOT DISCUSSED THE JUDGMEN T OF HONBLE ALLAHABAD HIGH COURT BUT HONBLE HIGH COURT OF RAJASTHAN HAS CLEARLY DISAGRE ED THE JUDGMENT OF HONBLE HIGH COURT OF ALLAHABAD.HONBLE RAJASTHAN HIGH COURT HAD DISCUSSE D THE ISSUE AS UNDER: IT IS ADMITTED POSITION THAT NEITHER IN THE 1957 AC T NOR IN THE INCOME-TAX ACT, 1961 THE WORD MONTH HAS BEEN DEFINED. HENCE, ACCORDING TO SECTI ON 4 OF THE GENERAL CLAUSES ACT, 1897, THE DEFINITION GIVEN TO THE WORD MONTH IN SECTION 3(3 5) OF THE SAID ACT WILL BE APPLICABLE FOR INTERPRETING THE WORD MONTH USED IN VARIOUS SECTI ONS OF THE 1957 ACT, UNLESS THERE IS ANYTHING 3 ITA NO. 8566/MUM/2001 ANCHALA SHASHIPAL KHANNA . REPUGNANT IN THE SUBJECT OR CONTEXT. ACCORDING TO S ECTION 3(35) THE MONTH DOES NOT NECESSARILY MEAN 30 DAYS AND IT IS ACCORDING TO GREGORIAN CALEN DAR YEAR UNLESS THE CONTEXT OTHERWISE REQUIRES. HENCE, THE WORD MONTH USED IN SECTION 1 8(1)(I) SHOULD BE THE ENGLISH CALENDAR MONTH. IN THIS VIEW OF THE MATTER, THE RETURN, WHICH WAS R ECEIVED BY THE WTO ON 15.09.1973, IN THE INSTANT CASE, WAS WITHIN MONTH AND NOT AFTER A COMPLETED MO NTH AND THERE WAS, THEREFORE, NO DELAY OF ONE MONTH IN FILING THE RETURN AND NO PENALTY COULD BE IMPOSED UNDER SECTION 18(1)(A). WE FIND THAT IN THE CASE OF YAHYA E.DHARIWALA (SUPR A), G BENCH OF MUMBAI TRIBUNAL HAS ALSO TAKEN A SIMILAR VIEW.IN THAT CASE SHARES WERE TRANS FERRED ON 28.02.2005 AND ASSESSEE INVESTED THE SALE PROCEEDS IN SPECIFIED BONDS ON 30.08.2005 AND HAD CLAIMED DEDUCTION U/S 54EC OF THE ACT. AS PER THE AO INVESTMENT IN THE BONDS WAS BEYOND TH E PERIOD OF SIX MONTHS FROM THE DATE OF SALE AND HENCE ASSESSEE WAS NOT ENTITLED TO CLAIM DEDUCT ION U/S 54EC OF THE ACT. FAA CONFIRMED THE ORDER OF THE AO.WHILE DECIDING THE APPEAL,TRIBUNAL ALSO DISCUSSED THE WORDS A PERIOD OF SIX MONTHS.FOLLOWING THE DECISIONS OF BRIJLAL LOHIA & MAHABIR PRASAD KHEMKA (124 ITR 485) AND KADRI MILLS COIMBATORE LTD. (106 ITR 846),TRIBUNAL HELD THAT PERIOD OF SIX MONTHS SHOULD BE CONSIDERED FROM THE END OF THE MONTH IN WHICH THE T RANSFER WOULD TAKE PLACE.PROVISIONS OF GENERAL CLAUSES ACT WERE ALSO DISCUSSED BY THE TRIB UNAL. AFTER CONSIDERING THE JUDGMENT OF HONBLE HIGH COUR T OF RAJASTHAN(SUPRA),WE ARE OF THE OPINION THAT SAME SHOULD BE FOLLOWED TO DECIDE THE ISSUE.WE FIND THAT HONBLE HIGH COURT OF RAJASTHAN HAS TAKEN A DISSENTING VIEW AFTER CONSIDERING THE J UDGMENT DELIVERED BY THE HONBLE ALLAHABAD HIGH COURT IN THE CASE OF LAXMI RATTAN COTTON MILLS CO. LTD. (SUPRA) .THEREFORE, FOLLOWING THE JUDGMENTS OF HONBLE HIGH COURT OF RAJASTHAN AND GU JARAT,WE HOLD THAT FOR DECIDING THE PERIOD OF SIX MONTHS,WORD MONTH SHOULD BE TAKEN AS THE ENG LISH CALENDAR MONTH FROM THE DATE OF SALE.IN THIS CASE INVESTMENT WAS MADE BEFORE 31 ST AUGUST,THEREFORE IN OUR OPINION ASSESSEE WAS ENTIT LED TO CLAIM DEDUCTION U/S 54EC OF THE ACT.REVERSING THE O RDER OF THE FAA,EFFECTIVE GROUND OF APPEAL FILED BY THE ASSESSEE IS DECIDED IN HER FAVOUR. AS A RESULT,APPEAL F ILED BY THE ASSESSEE STANDS ALLOWED. * +3 $*+ 4 5 - 1 !6 - !+ 78 . ORDER PRONOUNCED IN THE OPEN COURT ON 06 TH NOVEMBER,2013 . '2 - /0% ' 9 :$ 6 UOECJ UOECJ UOECJ UOECJ , 2013 0 - 1 ; SD/- SD/- ( . < < < < . . B.R.MITTAL) ( !'# !'# !'# !'# / RAJENDRA) / JUDICIAL MEMBER ' ' ' ' /ACCOUNTANT MEMBER / MUMBAI, :$ /DATE: 06 TH NOVEMBER,2013 SK '2 '2 '2 '2 - -- - (+= (+= (+= (+= >'=% >'=% >'=% >'=%+ ++ + / COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE / &' 2. RESPONDENT / ()&' 3. THE CONCERNED CIT (A) / ? @ , 4. THE CONCERNED CIT / ? @ 5. DR A BENCH, ITAT, MUMBAI / =A1 (+$ , ,, , , . . . 4 ITA NO. 8566/MUM/2001 ANCHALA SHASHIPAL KHANNA . 6. GUARD FILE/ 1 B )=+ )=+ )=+ )=+ (+ (+(+ (+ //TRUE COPY// '2$ / BY ORDER, C / 7 ! DY./ASST. REGISTRAR , /ITAT, MUMBAI