TMI Blog2012 (2) TMI 363X X X X Extracts X X X X X X X X Extracts X X X X ..... g out of separate orders of CIT(A)-XIX, Kolkata in Appeal No.172 171/CIT(A)-XIX/ITO,Wd-32(1),Kol/10-11 vide dated 21.06.2011. Assessments were framed by ITO, Wd-32(1), Kolkata u/ss. 254/263/143(3) of the Income Tax Act, 1961 (hereinafter referred to as "the Act") for Assessment Years 2005-07 vide his separate orders, both dated 24.12.2010. 2. The only common issue in these appeals of assessee is against the order of CIT(A) confirming the action of Assessing Officer in disallowing exemption u/s. 54EC of the Act. We will take up the issue from ITA No.1147/K/2011 in the case of Chapal Kr. Sircar and decide the issue. For this, assessee has raised following effective ground nos. 2 to 7: "2. On the facts and in the circumstances of the case, the lower authorities erred in failing to appreciate that law cannot compel anybody to do the 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce to revision order passed by CIT u/s. 263 of the Act for the present assessment. In the present assessment, facts are that assessee Shri Chapal Kr. Sircar and his brother Shri Chanchal Kr. Sircar were the joint owners of the house property at 114 Eliots Road, Kolkata-16. This property was demolished and in its place both brothers constructed house with ground plus three storied building jointly during the period 1993-94 relevant to assessment year 1994-95 at a total cost of Rs. 61.26 lacs. This is an admitted position as assessment was framed in both the cases u/s. 147 r.w.s. 143 of the Act for Assessment Year 1994-95 and 1995-96. Out of the above three floors, the entire first floor was sold in three parts to the following: ( i ) Ganatrantik Mahila Samity, ( ii ) Kolkata Ganatrantik Mahila Samity and ( iii ) Eksathe These 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 I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt period from the respective dates of each installment of money received from the purchasers in accordance with the requirements of section 54EC of the Act. The assessee claimed exemption u/s. 54EC of the Act on Capital Gains. However, during the course of the assessment proceeding for the said year, the matters relating to sale of the property and deposit of the consideration amounts with NABARD, were discussed with the A.O., who did not consider any Capital Gains tax to be imposable in this case and he completed the assessment u/s 143(3) of the Act, on 24.12.2007, at the figure of total income of Rs. 3,51,600/-. He, however, did not make any mention in the assessment order about the 'deemed' or otherwise sale of the portion of the property and deposit of the consideration amount with NABARD. The CIT, in exercise of his powers u/s 263 of the Act, held that the deposits of sale consideration amounts were mostly not within six months' time limit from the date of the sale (deemed) of the portion of the property but held that the date of deemed sale should be taken for the purpose of section 54EC of the Act, to be 02.07.2004 (as discussed above and also in the impugned re-assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... brothers sold part of his immovable property and received first payment from CPI(M) on 01.07.2004 and from remaining three purchasers on 02.07.2004 as part payment although the possession was also handed over to these purchasers. It is also a fact that the sale deed was registered, in the case of CPI(M) on 27.06.2005 and in the case of other three purchasers on 28.09.2005. The assessee has deposited the sale consideration within one month of receipt with NABARD for availing exemption u/s. 54EC of the Act. In such circumstances whether the assessee is eligible for claim of exemption or not ? In our view, in this type of case, the period of six months for making deposit u/s. 54EC of the Act should be reckoned from the dates of actual receipt of the consideration, because in the present case the assessee has received part payment as on the date of execution of agreement and handing over of possession of the property and received part payment after six months at the time of registration of sale deed or even after that in few of instances, as is evidently clear from the above chart at para 3 page 3 of this order. We are of the view that if the period is reckoned from the date of agreeme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e enactment of section 54E of the Act. 7. Similar situation was analysed by Hon'ble Allahabad High Court in the case of CIT v. Janardhan Dass (late through legal heir Shyam Sunder) [2008] 299 ITR 210 (All) wherein Hon'ble High Court observed that section 54B(2) of the Act, provides that where the transfer of the asset is by way of compulsory acquisition under any law and the compensation amount awarded for such acquisition is enhanced by any court, Tribunal or other authority, the capital gains attributable to the enhanced value of the compensation shall be dealt with as provided for in section 54B(2), according to which if the enhanced compensation as received has been invested in agricultural land within two years of its receipt, to that extent no capital gains tax will be charged. This provision gives an insight that section 54B of the Act has taken into consideration the possibility of enhancement of compensation amount by the court, Tribunal, etc., at the subsequent stages. If the agricultural land is purchased within a period of two years from such enhancement, the capital gain or no capital gain, as the case may be, will be charged under section 54B(2) of the Act. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TI Capital Gains Scheme of 1983, on October 1, 1991, i.e., within six months from the date of receipt of the additional compensation and sought exemption under section 54E of the Act. The Assessing Officer denied this exemption on the ground that the capital gain arose in respect of transfer of the original asset prior to March 31, 1983, when the UTI Capital Gains Scheme, 1983, was not in force. On appeal, the Commissioner (Appeals) upheld the disallowance made by the Assessing Officer. On further appeal, the Tribunal held that the assessee was entitled for the exemption under section 54E. On a reference, the Hon'ble Court held that the assessee received the amounts in 1991-92. Admittedly, the amounts were deposited by the assessee within six months from the date of its receipt, in the UTI Capital Gains Scheme, which is one of the units as specified asset mentioned in Explanation 1(c)(ii) to section 54E of the Act. The assessee was entitled to exemption under section 54E of the Act. 9. In view of the above consistent principle adopted by Hon'ble High Courts in respect to interpretation of a beneficial provision i.e. exemption provision under capital gains tax, we have to take s ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
