ITO WD 21(2)(2), MUMBAI V. SANJIVA SHETTY, MUMBAI

ITA 913/MUM/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 4292 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 10 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-01-2016
• Appeal Filed By: Department
• Bench Allotted: E
• Next Hearing Date: 13-11-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 04-02-2013
• Court: TRIBUNAL
• Department Lawyers: SACHIDANAND DUBEYDR
• Keywords: Capital asset

Judgement Text

, INCOME TAX APPELLATE TRIBUNAL,MUMBAI- E,BENCH , , BEFORE S/SH. RAJENDRA,ACCOUNTANT MEMBER & S ANDEEP GOSAIN,JUDICIAL MEMBER /.ITA NO.913/MUM/2013, /ASSESSMENT YEAR 2007-08 INCOME TAX OFFICER-21(2)(2) C-10/ROOM NO.507, 5 TH FLOOR, BANDRA KURLA COMPLEX BANDRA, MUMBAI-400 051. VS. SHRI SANJIVA SHETTY 5/215, KUNTIPURA CHS SARDAR NAGAR NO.1 SION, KOLIWADA, MUMBAI-400 022. PAN NO.AAVPS 1368 Q ( / ASSESSEE ) ( / RESPONDENT) /ASSESSEE BY : NONE / REVENUE BY :SH. SACHIDANAND DUBEY-DR / DATE OF HEARING :16 - 11 -2015 / DATE OF PRONOUNCEMENT : 01.01.2016 ,1961 254(1) ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA, AM - CHALLENGING THE ORDER DT.5/11/2012 OF CIT(A)-32,THE ASSESSING OFFICER(AO)HAS FILED THE PRESENT APPEAL. 2. THE ONLY GROUND OF APPEAL DEALS WITH DEDUCTION UNDE R SECTION 54EC OF THE ACT AMOUNTING TO RS.30.00 LACS.DURING THE ASSESSMENT PROCEEDINGS, THE AO FOUND THAT THE ASSESSEE HAD TRANSFERRED A CAPITAL ASSET ON 22.6.2006 ON WHICH C APITAL GAIN OF 42.96 LACS WAS WORKED OUT, THAT THE ASSESSEE HAD CLAIMED DEDUCTION OF RS.30.00 LACS AGAINST THE LONG TERM CAPITAL GAINS (LTCG,THAT HE HAD CLAIMED TO HAVE MADE INVESTMENT O F RS.30.00 LACS IN REC BONDS, THAT THE BONDS WERE PURCHASED ON 31.7.2007.THE AO HELD THAT THE ASSET WAS TRANSFERRED ON 22. 12. 2006,THAT THE PERIOD OF SIX MONTHS FOR AVAILING THE DEDUCTION U/S. 54EC EXPIRED ON 22.6.2007, THAT THE ASSESSEE HAD MADE INVESTMENT ON 31.7.2007, THAT THE ASSESSEE HAD CLAIMED THAT THE SCHEME FOR ELIGIBLE BONDS WAS CLOSED W.E.F. 31.3.20 07 AND LATER ON IT WAS AGAIN OPENED W.E.F. 2.7.2007, THAT HE HAD ISSUE CHEQUE DT.15.6.2007, TH AT THE CHEQUE WAS ISSUED BEFORE THE EXPIRY OF SIX MONTHS TO THE AGENT WHO INVESTED IN THE BOND S IN THE MONTH OF JULY.HOWEVER, THE AO DID NOT AGREE WITH THE CONTENTION OF THE ASSESSEE A ND HELD THAT INVESTMENT U/S.54EC WAS BEYOND THE TIME LIMIT, ACCORDINGLY HE DENIED THE DE DUCTION TO THE ASSESSEE. 3. AGGRIEVED BY THE ORDER OF THE AO THE ASSESSEE PREFE RRED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY(FAA).BESIDES THE ARGUMENT ADVAN CED BEFORE THE AO,THE ASSESSEE STATED THAT THE CBDT HAD ISSUED A CIRCULAR,THAT HIS CASE W AS COVERED BY THE CIRCULAR, THAT THE SCHEME WAS NOT OPEN ON 22.6.2007.AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE AND THE ASSESSMENT ORDER,THE FAA HELD THAT THE SCHEME FOR M AKING INVESTMENT IN THE ELIGIBLE BONDS U/S.54EC WAS OPEN FROM 22.1.2007 TO 31.3.2007 ONLY, THAT ON THE LAST DAY OF EXPIRY OF LIMITATION ON 22.06.2007 THERE WAS NO SCHEME OPEN F OR SUBSCRIPTION,THAT AS SOON AS SUBSCRIP - TION OPENED ON 02.07.2007 THE ASSESSEE INVESTED IN THE BONDS, HAT THE BONDS WERE ALLOTTED TO HIM ON 31.07.2007,THAT THE ASSESSEE COULD NOT BE HE LD IN DEFAULT FOR VIOLATION OF CONDITIONS OF SECTION 54EC,THAT SCHEME RE-OPENED ON 2.7.2007,THAT THE ASSESSEE HAD ISSUE THE CHEQUE DT.15.6.2007, THAT THE CBDT HAD EXTENDED THE APPLIC ABILITY OF THE SCHEME TO THOSE EARLIER CASES WHERE LONG TERM ASSETS WERE TRANSFERRED BETWE EN 29.9.2005 TO 30.9.2006.HE REFERRED 913/13-SANJIVA SHETTY 2 TO THE CASE OF RAM AGARWAL(81 ITD 163) AND ASPI GIR WALA (ITAT AHMEDABAD) AND HELD THAT THE ASSESSEE WAS ELIGIBLE TO CLAIM DEDUCTION U/S. 5 4EC OF THE ACT. 4 .DURING THE COURSE OF HEARING BEFORE US THE DEPARTM ENTAL REPRESENTATIVE (DR) SUPPORTED THE ORDER OF THE AO. 5. WE HAVE PERUSED THE MATERIAL ON RECORD.WE FIND THAT THE AO HAD DENIED THE BENEFITS OF PROVISIONS OF SECTION 54EC,AS HE WAS OF THE OPINION THAT INVESTMENT IN BONDS WAS NOT MADE WITHIN THE PERIOD OF SIX MONTHS,THAT THE FAA HAD AL LOWED THE APPEAL, THAT HE HAD HELD THAT ASSESSEE COULD NOT MAKE INVESTMENT AS THE SCHEME WA S NOT OPEN ON THE LAST DAY OF SIX MONTHS.IN OUR OPINION SECTION 54EC IS ONE OF THE BE NEVOLENT PROVISIONS AND WAS INSERTED IN THE ACT WITH A SPECIFIC PURPOSE. THE ASSESSEE MADE THE INVESTMENT AS SOON AS THE SCHEME RE- OPENED IN JULY.IN THESE CIRCUMSTANCES,WE ARE OF THE OPINION THAT THE ORDER OF THE FAA DOES NOT SUFFER FROM ANY LEGAL INFIRMITY.SO,CONFIRMING T HE SAME WE DECIDE THE EFFECTIVE GROUND OF APPEAL AGAINST THE AO. AS A RESULT,APPEAL F ILED BY THE AO STANDS DISMISSED. . ORDER PRONOUNCED IN THE OP EN COURT ON 1 ST JANUARY, 2016. 01 , 2016 SD/- SD/- ( /SANDEEP GOSAIN ) ( / RAJENDRA ) /JUDICIAL MEMBER /ACCOUNTANT MEMBER MUMBAI, DATE: 01.01.2016 . . . JV.SR.PS. / 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 / , . . . 6. GUARD FILE/ //TRUE COPY// / BY ORDER, / DY./ASST. REGISTRAR , /ITAT, MUMBAI.