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2016 (5) TMI 1090 - ITAT CHENNAI

2016 (5) TMI 1090 - ITAT CHENNAI - TMI - Entitlement to exemption under Section 54E - Held that:- The capital gain computed by the assessee to the extent of ₹ 36,68,051/- on sale of 75% of his right in the immovable property was claimed exemption under Section 54E of the Act. The Assessing Officer found that what was deposited in IDBI bonds is only ₹ 15,00,000/-. Accordingly, he computed the exemption proportionately. It is obvious from the provisions of the Act that the assessee has .....

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gains - Held that:- This Tribunal found that after the consideration received by the assessee, what was deposited in IDBI bonds within the prescribed time is only ₹ 15,00,000/-. Therefore, the Tribunal upholds the order of the Assessing Officer which proportionately allowed exemption under Section 54E of the Act. In this appeal, the CIT(Appeals) has further allowed 60% under Section 48(2) of the Act. The 60% might have been allowed for improvement, etc. made by the assessee to the propert .....

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. GANESAN, JUDICIAL MEMBER: These appeals filed by both the Revenue and the assessee are directed against the order of the Commissioner of Income Tax (Appeals), Coimbatore, dated 9.10.1992, for assessment year 1990-91. Since common issue arises for consideration in all these appeals, we heard these appeals together and disposing of the same by this common order. 2. First, let s take Revenue s appeal in I.T.A. No.3171/Mds/1992. 3. Dr. B. Nischal, the Ld. Departmental Representative, submitted tha .....

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the assessment under Section 147 of the Income-tax Act, 1961 (in short 'the Act') and assessed the same. However, the CIT(Appeals) deleted the addition on the ground that the interest was received in advance on capital bonds attributable to 36 months. Therefore, the right to receive the amount accrued to the assessee arises only in the next assessment year. The advance cannot be construed as income of the assessee during the year under consideration. The CIT(Appeals) has also found that .....

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that what was received by the assessee is nothing but interest on IDBI bonds. However, the assessee received the same in advance. According to the Ld. counsel, the assessee has no right to receive the interest in advance. Merely because the advance was received on a discounted rate, that cannot be a reason to treat the same as income of the assessee. According to the Ld. counsel, the interest on IDBI bonds has to be assessed in the year in which the assessee has right to receive the money, there .....

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the assessee discounted the IDBI bonds and received a sum of ₹ 3,52,500/- in the year under consideration. The interest on the bonds was spread over for 36 months. What was received by the assessee is the entire interest for 36 months in advance. This Tribunal is of the considered opinion that the entire money received by the assessee cannot be construed as income in the hands of the assessee. What was to be construed as income is in respect of the money received for which the assessee ha .....

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Section 147 of the Act. 6. Now coming to the assessee s appeal in I.T.A. No.1831/Mds/1994, Shri S. Sridhar, the Ld.counsel for the assessee, submitted that the assessee has transferred capital asset to M/s Indian Express (Madras) Pvt. Ltd. on 17.04.1989 for a total consideration of ₹ 37,79,978/- and claimed exemption under Section 54E of the Act. The Assessing Officer disallowed the claim of the assessee. The assessee had deposited in IDBI bonds only ₹ 15,00,000/- and claimed exempt .....

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l, the Ld. Departmental Representative, submitted that the assessee filed revision petition under Section 264 before the Administrative Commissioner. The Administrative Commissioner found that any deduction before allowing under Section 54E of the Act, more particularly deduction under Section 48(i)(b) of the Act, has to be restricted only with regard to the amount invested in IDBI bonds. The Ld. D.R. further submitted that deduction under Section 48(i)(b) of the Act has to be made only to the c .....

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- on 17.04.1989, and the assessee claimed exemption of the entire capital gain of ₹ 36,68,051/-. The Assessing Officer, however, found that the assessee has deposited only ₹ 15,00,000/- in IDBI bonds, therefore, he computed the exemption proportionately and allowed exemption to the extent of ₹ 14,55,000/- as against ₹ 36,68,051/- claimed by the assessee. According to the Ld. D.R.,this was rightly confirmed by the CIT(Appeals). 8. We have considered the rival submissions o .....

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in the capital asset or Capital Gains Bond as prescribed under Section 54E of the Act. For claiming exemption, the assessee has invested only ₹ 15,00,000/-. Therefore, the assessee is entitled for exemption proportionately. Accordingly, the CIT(Appeals) has rightly allowed the exemption proportionately. This Tribunal do not find any reason to interfere with the order of the lower authority and accordingly the same is confirmed. 9. The Revenue has filed one more appeal against the order of .....

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