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TMI Blog2012 (4) TMI 195X X X X Extracts X X X X X X X X Extracts X X X X ..... elete the same. [3] The learned CIT (Appeals) has erred in law and on the facts of the appellant's case in confirming the order of the Ld. AO of allowing deduction u/s 54EC of the Act at Rs. 50,00,000/-, instead of Rs. 1,00,00,000/- claimed by the appellant on the erroneous plea that the investment of Rs. 50,00,000/- made by the appellant is beyond the time limit prescribed u/s 54EC of the Act. [4] The appellant most humbly submits that on the facts and the circumstances of his case & in law, the disallowances made by learned A.O. is erroneous and prays that Hon'ble be pleased to hold so now and grant the deduction as claimed. [5] The appellant craves leave to add, to alter and/or amend the grounds of appeal herein above taken. 3. Ground nos.1 and 2 are inter-connected and therefore both are decided together as under. Since the facts involved in both the grounds are similar, we are considering the facts in the case of Shri Aspi Ginwala in ITA No.3226Ahd/2011. The facts of the case which are clear from the submissions of the assessee before the learned CIT(A) which read as under:- "The appellant has preferred an appeal before your honour against order u/s 143 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 The appellant most humbly submits that that the investment has been made by him in the prescribed securities in due compliance of Section 54EC of the Act and the exemption is rightly claimed and is available. 2.3 As far as delay in making investment is concern, the appellant most humbly submit that there is no delay in making investment on his part. Since no eligible scheme notified in the said section was available for subscription between 1/4/2008 to 28/5/2008 he was prevented by sufficient cause in not complying with the time limit prescribed in section 54EC. The appellant further submit that the appellant took all the step to comply with the time limit incl. kept the money ready, instructed the his broker to subscribe the first available scheme as soon as the scheme starts subscription for new financial year, requested the issuer etc. 2.4 As stated above as the appellant had sold property on 22/10/2007, he was required to make investment within 6 months i.e. on or before 21/04/2008, in order to avail exemption u/s 54EC of Act. However both the eligible investments were closed for subscription from 31st March 2008 and were reopened only on 26th May 2008 for NHAI Bonds and 28 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and as soon as the subscription of one of the scheme opened, he has subscribed to it. The subscription for NHAI Bonds opened on 26/5/2008 and the application was made on same day i.e. on 26/05/2008 itself and cheque got cleared on 28/05/08 (the allotment is made on 31/5/2008). The copy of bank statement along with counterfoil of the investment made in enclosed in Annexure- 3 for your honour's ready reference. The appellant further submits that he has made investment on same day the subscription of one of the scheme got opened and didn't wait till the subscription of other scheme to get open. 2.7 The appellant further submits that this is a case of real hardship to the tax payer. One side the act provides for exemption if investment is made in the specified assets within a specified period, however on the other side the specified assets were not available for subscription within that specified period. In a situation any person is helpless. In such situation, the appellant most humbly submit that he is eligible for exemption for the investment made beyond time limit, as he was prevented by sufficient cause which was beyond his control. The appellant most humbly submit that the Hon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v. DCIT 2010 TIOL 60 IT AT (Mum) "10. The Id. Counsel of the assessee reiterated its contentions raised before the lower authorities here before us. It was further submitted that no bonds were available at the time of filing of the 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 31.1.2007 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 ITD 163. 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, the Id. DR placed reliance on the order of the CIT(A). 11. We have heard the rival submissions and consider them carefully. After taking into consideration all the facts and material on record, we find that the assessee deserves to succeed in this ground also. There is no dispute that assessee has sold its capital asset i.e. plant an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nk officials with the cheque for the amount of deposit on 30-8-1995. The assessee remained unable to obtain receipt on 31-8-1995 due to bank strike and the cheque was cleared on 1-9-1995. In this view of the situation, it can well be said that the deposit of the assessee was in accordance with the provisions of statute as on the last date i.e. the 31-8-1995, the deposit could not be made due to the reason which was beyond the control of the assessee particularly in view that the efforts were made by the assessee a day prior to last date to deposit the requisite amount in the bank to make him entitle for exemption under sec 54F. As mentioned earlier, this position has also been accepted by the learned CIT(A). Therefore, we direct the Assessing officer to allow the necessary exemption to the assessee. Before parting we may observe that section 54F is a beneficial provision to encourage assessee to invest in house properties. Keeping in mind the above object behind the insertion of section 54F and considering the fact that the assessee was not at fault in not depositing the amount before 31-8-1995, we hold that the deposit made on 1-9-1995 satisfies the condition laid down in section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovisions of section 54 EC are reproduced hereunder: - "54EC (1) Where the capital gain arises from the transfer of a long-term capital asset (the capital asset so transferred being hereafter in this section referred to as the original asset) so and the assessee has, at any time within a period of six months after the date of such transfer, invested the whole or any part of capital gains in the long-term specified asset, the capital gain shall be dealt with in accordance with the following provisions of this section, that is to say-, (a) if the cost of the long-term specified asset is not less than the capital gain arising from the transfer of the original asset, the whole of such capital gain shall not be charged under section 45, (b) if the cost of the long-term specified asset is less than the capital gain arising from the transfer of the original asset, so much of the capital gain as bears to the whole of the capital gain the same proportion as the cost of acquisition of the long-term specified asset bears to the whole of the capital gain, shall not be charged under section 45: [Provided that the investment made on or after the 1st day of April 2007 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould be tantamount to legislation by the court, while no court has such legislative power. SC has consistently held that incentive provisions which confer concession, should be interpreted in a liberal manner, so as to subserve the purpose for which they are intended e.g. (i) 196 ITR 188(SC) - Bajaj Tempo Lt (ii) 177 ITR 418(50), 177 ITR 431 (SC) General rule is that the provisions relating to deductions, allowances and exemptions are expected to be interpreted rigidly, incentive provisions are to be interpreted differently as they form an exception to the rule. It has been held by the honourable Supreme Court in the case of 204 ITR 412 (SC) Budharaja (N.C.) and Co that "the principle of adopting a liberal interpretation which advances the purpose and object of beneficent provisions cannot be carried to the extent of doing violence to the plain and simple language used in the enactment. It would not be reasonable or permissible for the court to rewrite the section or substitute words of its own for the actual words employed by the Legislature in the name of giving effect to the supposed underlying object. After all, the underlying object of any provisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the lower authorities the assessee is only entitled for exemption u/s 54EC upto Rs. 50 lakhs only. The assessee's case, however, is that as per the proviso to section 54EC, investment made on or after 1st April, 2007 in the Long Term Specified Asset by an assessee during any financial year should not exceed Rs. 50 lakhs. The assessee's case is that since the property was sold on 22-10-2007 he could have invested in eligible investment within six months i.e. on or before 21-04-2008 in order to avail exemption u/s 54EC of the Act. There is no dispute about Rs. 50 lakhs invested on 31-12-2007 in REC Bonds. The dispute is only about further investment of Rs. 50 lakhs in NHAI Bonds made on 26-05-2008. Since six months in this case involves two financial years, the assessee's case is that if he had deposited another Rs. 50 lakhs from 1st April, 2008 to 21-04-2008, he was entitled for exemption u/s 54EC of the Act. As during this period from 01-04-2008 to 26-05-2008 subscription in eligible investment was closed, the investment made by the assessee on 26-05-2008 i.e. 1st day of the reopening of the subscription of eligible investment in NHAI Bonds should be treated in time. There is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ths period as per the proviso to sec. 54EC, we find that the assessee was to make investment in such Bonds between 01-04-2008 to 21-04-2008. There is no dispute about the fact that subscription of eligible Bonds was closed during this period till 26-05-2008 and on the 1st day of the reopening of the subscription, the assessee made this investment. Under the circumstances, we are of the considered opinion that the assessee was prevented by sufficient cause which was beyond his control in making investment in these Bonds within the time prescribed. We further find that various judicial authorities have taken a view that exemption should be granted in such cases where there is a delay in making investment due to non-availability of the bonds and have held that it is a reasonable cause and the exemption should be granted. In the case of Ram - Agarwal v. Joint CIT 81 ITD 163 (Mum), it has been held as under: "In regard to claim of exemption under section 54F we may mention that it is found by the learned CIT(A) that the bank was closed on 31-8-1995 on account of strike as certified by the officials of the concerned bank. From the certification given by the bank officials, the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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