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TMI Blog2012 (2) TMI 363X X X X Extracts X X X X X X X X Extracts X X X X ..... he impossible and that it was not possible for the appellant to invest any portion of the sale consideration in 'long term specified asset' before the same had actually been received by the appellant. 3. On the facts and in the circumstances of the case, the lower authorities erred in failing to appreciate that in case of 'Deemed transfer' of property under section 2(47)(v) of the Act involving full payment of the consideration amount in a spread-over manner, the date of transfer', for the purpose of allowing time for investing the consideration amount in specified assets, should be considered to be the actual date of receipt of each installment of the payment. 4. On the facts and in the circumstances of the case, the lower authorities erred in failing to appreciate that the appellant had duly deposited the amounts of installments of sale consideration received by him within a short period from the respective dates of such receipts and in that way, he had done everything possible on his part to comply with the requirements of section 54EC of the Act. 5. On the facts and in the circumstances of the case, the learned CIT(A) erred in not taking into consideration the various judici ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were sold by way of separate agreements all dated 02.07.2004 and sale deed was registered at a value of Rs. 49,09,470/-, Rs. 12,60,950/- and Rs. 13,26,826/- respectively. The total sale consideration of the entire first floor was at Rs. 74,97,246/-. Further, the entire second floor of the building excluding two rooms were sold to Communist Party of India (Marxist) by another agreement for sale dated 01.07.2004 at the value of Rs. 56.80 lacs. This agreement was not registered as sale deed or it was not a registered agreement. The other portions of the property were retained by these two brothers for their residential premises. The ground floor was for common car parking space. The assessee and his brother received part payments from the parties [as per details below] and possession of the respective flats was also handed over to the parties simultaneously. Almost immediately after the receipt of the said payments, they were fully deposited with NABARD in terms of the requirement u/s 54EC of the Act, as the details given below would establish. G. M. Samity Date of receipt Amount (Rs.) Date of deposit With NABARD 02.07.04 15,00,000 27.08.04 27.12.04 10,00,000 07.01.05 17.05 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act, to be 02.07.2004 (as discussed above and also in the impugned re-assessment order). In that view, he not only set aside the assessment for re-doing the same by taking into consideration the Capital Gains aspect, but also gave definite directions for not considering the deposits made beyond the period of six months from 02.07.2004 for the purpose of section 54EC. The matter was taken up by the appellant to Income Tax Appellate Tribunal, Kolkata Bench, which, by its order dated 08.01.2010 in ITA NO.1705/KoI/2009, upheld the setting aside of the original assessment order for making a fresh assessment in accordance with law simply because of the fact that no enquiries had been made about the sale (deemed) of the portion of the property and the Capital Gains issue arising therefrom. At the same time, the ITAT also gave a specific direction to the A.O. to ignore the various comments made by the CIT in his order u/s 263 about the merits of the issue. 5. In consequence to revision order passed u/s. 263 of the Act by CIT, assessment was framed u/s 254/263/143(3) of the Act by the A.O. on 24.12.2010, in which, besides the sales of the first floor of the property to three different ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der. We are of the view that if the period is reckoned from the date of agreement and receipt of part payment at the first instance, then it would lead to an impossible situation by asking assessee to invest money in specified asset before actual receipt of the same. This view of ours is supported by the decision of Hon'ble Andhra Pradesh High Court in the case of S. Gopal Reddy v. CIT [1990] 181 ITR 378 (AP), wherein similar situation of delayed receipt of compensation amount on acquisition of property, Hon'ble High Court observed that if the investment in specified asset was made within a period of six months from the date of receipt of compensation, as against the date of acquisition of the property denoting transfer thereof, the same should be considered to be sufficient compliance for the purpose of claiming exemption u/s. 54E of the Act. Hon'ble High Court observed that a taxing statute or any other statute has to be construed reasonably and every effort should always be made to ascertain the intention of Parliament from the words employed and, as far as possible, an interpretation which leads to absurdity should be avoided. Though equity and taxation are often strangers, att ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case may be, will be charged under section 54B(2) of the Act. In other words, the period of two years in such cases will commence from the date of enhancement of the compensation amount by the court, etc. This is indicative of the legislative intent to the effect that for the purposes of section 54B, the date of receipt of enhancement of the compensation amount is the relevant consideration and not the date of transfer. It follows, therefore, that for a delay on the part of the acquiring body in making payment of the compensation amount, the assessee should not be deprived of the benefit of section 54B of the Act provided he fulfills the other conditions of the section within the stipulated period from the date of receipt of the payment. The emphasis is on the date of actual receipt of the payment and not on the date of transfer of the asset, in the case of agricultural land. The statute should be interpreted as it stands without making any addition or subtraction therein. Section 54B of the Act is a beneficial provision for an assessee who is otherwise liable to pay income-tax under the head "Capital gains". On a conjoint reading of section 45 with section 54B of the Act, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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