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TMI Blog2010 (1) TMI 821X X X X Extracts X X X X X X X X Extracts X X X X ..... beginning of the year amounting to Rs. 7,63,662/-. The AO further noted that no other business activity was actually carried out by the assessee during the year. By further observing that the assessee has closed down the business activities of the concern and therefore, various expenditure clamed in PandL account are not allowable. The explanation of the assessee that the expenses incurred by the assessee during the year are allowable expenses because the assessee is in business was not accepted by the AO. It was further observed by the AO that the assessee has sold its factory building and has also surrendered its electricity meter. Therefore, there is no reason to incur various expenses which are claimed in the PandL account for business ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sales have taken place; therefore, this is not the case that the assessee has sold the entire plant and machinery and no asset remained with the assessee. 6. In similar circumstances, in the case of G R Shipping Ltd, D Bench of the Tribunal has decided the issue in favour of the assessee while deciding the appeal in ITA No. 822/Mum/05 for AY 2001-02 vide order dated 17.7.2008. Copy of the order of the Tribunal is placed on record. Therefore, we hold that depreciation claimed by the assessee is allowable. Accordingly, we direct the AO to allow the deduction on account of legal and professional charges and also depreciation. Accordingly, we allow these grounds of the assessee. 7. The remaining issue is against in not allowing deduction u/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view to remove the hardship caused to taxpayers, the CBDT in exercise of powers conferred by clause (C) of sub. Section (2) of sec. 119, ordered by way of Circular no.F.no.142/9/2006 TPL dated 30.6.2006 that the limitation of six months for making investments u/s 54EC of capital gains arising from the transfer of a long term capital assets is extended upto 31.12.2006, but no such bonds are available in the market upto 31.10.2006, which is the due date for filing of the return. The amount of capital gain has been invested in REC bonds on 31.1.2007 as and when scheme was available to avail the exemption u/s 54EC of the Act. The FDR with SBI was with clear instructions to clarify the intention to invest the amount in bonds u/s 54EC of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fiction created u/s 50. Benefit of section 54E is available to the assessee irrespective of the fact that the computation of capital gains is done either u/s 48 and 49 or u/s 50. 9. After considering the submissions and perusing the material on record, the CIT(A) allowed the ground of the assessee in part. The CIT(A) held that the decision of the Hon'ble Bombay High Court in the case of Ace Builders is squarely applicable on the facts of the present case; therefore, the assessee is entitled for deduction subject to fulfilment of other conditions u/s 54EC of the Act. The CIT(A) further held that conditions for claiming of deduction u/s 54EC are not satisfied as the bonds were not purchased even within the extended time allowed by CBDT. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Taking into consideration the hardship faced by various entities, the CBDT vide circular no. 142/9/2006 TPL dt 30.6.2006 extended the time for purchasing the specified bonds upto 31.12.2006. The assessee approached the appropriate authorities to buy the bonds; however, they were not available. Therefore, it was an impossible task for the assessee to comply with the conditions of sec. 54EC. The assessee ultimately purchased FDs of Rs. 50 lacs with a view to buy specified bonds whenever they are available. Letter was issued to the SBI while purchasing FDs of Rs. 50 lacs that the bonds are not available in the market and therefore, FD for an initial period of 90 days which may be extended further or may be redeemed prior to expiry date for inv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee on 1.9.1995. The AO disallowed the claim of the assessee for exemption u/s 54F on two grounds viz first the assessee did not have regular business income and so the prescribed date for filing the return was 30.6.1995 treating it as income from other sources instead of 31.8.1995; secondly, even if the assessee was having business income the deposit was still not made within the prescribed time i.e. 31.8.1995, and the deposit was made on 1.9.1995. The CIT(A) found that there was a strike in the bank and that it was also certified by the concerned bank official of PNB in which the deposit was made. So according to the CIT(A), the aspect of deposit being made on 1.9.1995 had no particular relevance; accordingly, he held that commissio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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