TMI Blog2010 (1) TMI 821X X X X Extracts X X X X X X X X Extracts X X X X ..... he bonds on 31.1.2007. Therefore, the assessee is not entitled for deduction as bonds were not purchased within the time allowed. - held that:- 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. - As soon as the bonds were available in the market, the assessee immediately purchased the same. Therefore, in our considered view, under these circumstances, the assessee is entitled for exemption u/s 54EC. - Decided in favor of assessee. - ITA No. 2200/Mum/09, - - - Dated:- 19-1-201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ground of the assessee by allowing expenses on account of bank charges, ESIC, Insurance, rebate and discount. The expenses claimed on account of legal and professional charges at Rs. 1,37,500/- and depreciation of Rs. 2,28,757/- was not allowed against which the assessee is in appeal here before the Tribunal. 4. After considering the submissions of both sides, we find that the assessee deserves to succeed in this ground. The CIT(A) has confirmed the disallowance for the reason that details of legal and professional charges were not filed. The ld counsel of the assessee has invited our attention on the details filed before the CIT(A). In these details, it has been clearly mentioned that these expenses were incurred on account of legal and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as accrued to the assessee during the year which was claimed exempt as per provisions of section 54 of the I T Act. The assessee, in the computation of income, appended a note in which it has been stated that a sum of Rs. 50 lacs has been deposited in FD since the amount to be invested in bonds u/s 54E could not be invested as the bonds were not available in the market for purchase; as soon as the bonds are available, the said FD will be utilized for the purchase of bonds. No other details such as date of sale, total sale consideration, name and address of the person to whom the asset has been sold was attached with the return of income. The AO further observed that the correct section of the I T Act for claiming exemption on the basis of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee has purchased the bonds on 31.1.2007. Therefore, the assessee is not entitled for deduction as bonds were not purchased within the time allowed. The AO also held that the factory building is an asset on which depreciation was claimed by the assessee. As per provisions of section 50 of the Act, capital gain on transfer of the depreciable asset shall be deemed to be capital gain arising from the transfer of short term capital asset. On the basis of this provision also the claim of the assessee was held as not allowable. 8. The contention raised before the AO were reiterated before the CIT(A). It was further submitted that exemption u/s 54EC is available to the assessee even if the asset transferred was depreciable asset. Reliance was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore the lower authorities here before us. It was further submitted that no bonds were available at the time of filing of return. Even upto 31.12.2006, the bonds were not available. The bonds were available only on 22.1.2007. Immediately after five days i.e. 27.1.2007 the assessee applied for purchase of bonds and on 31.1.207 the bonds were allotted to the assessee. Therefore, this was an impossible task to the assessee to buy the bonds within the specified time as the bonds were not available. Reliance was placed on the decision of the Tribunal reported in 81 ITD163. Attention of the Bench was drawn on paras 15 to 20 of the order of the Tribunal where in similar circumstances, the claim of deduction u/s 54F was allowed. On the other hand, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es of the FDs are placed at pages 7 and 8 of the compilation. Copy of the letter issued by Rural Electrification Corpn Ltd along with copy of bond certificate is placed at pages 9 of the compilation. In this allotment, it is clarified that the assessee applied for purchase of bonds on 27.1.2007 and they are allotted on 31.1.2007. 500 bonds for a consideration of Rs. 50 lacs were allotted. The bond certificate is also placed at page 10 of the compilation. 11.1 From these facts, it is clearly established that there was reasonable cause in not purchasing these specified bonds within the specified time allowed as they were not available in the market. As soon as the bonds were available in the market, the assessee immediately purchased the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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