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Shri. P.R. Viswanath Versus The Assistant Commissioner of Income Tax, Vellore

2016 (6) TMI 479 - ITAT CHENNAI

Denial of exemption u/s.54EC of the Act investment in REC capital gains bonds falling in two financial years - Held that:- On combined reading of both the provisions, the legislative intent in the subsequent amendment is to restrict the investment of ₹ 50,00,000/- to one financial year only. There was ambiguity and confusion on interpreting the provisions as the Commissioner of Income Tax (Appeals) examined the issue on the interpreting the word "any" referring to dictionary meaning becaus .....

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hus we direct the Assessing Officer to delete the addition and allow the grounds in favour of the assessee. - I.T.A. No.2274/Mds/2015 - Dated:- 27-4-2016 - SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI G. PAVAN KUMAR, JUDICIAL MEMBER For The Appellant : Shri. A. Mahesh, C.A. For The Respondent : Shri. A.V. Sreekanth, IRS, JCIT. ORDER PER G. PAVAN KUMAR, JUDICIAL MEMBER: The appeal filed by the assessee is directed against order of Commissioner of Income-tax (Appeals)-13, Chennai in ITA No.202 .....

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from salary, rental income, capital gains and interest income and filed e-return on 28.09.2011 declaring total income ₹ 95,07,370/- and same was processed u/s.143(1) of the Act subsequently the case was selected for scrutiny through CASS and notices u/s.143(2) and 142(1) of the Act was issued with questionnaire. In compliance, the ld. Authorised Representative of assessee appeared from time to time and filed details and produced books of accounts and filed written submissions. On verifica .....

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stries (P) Ltd vs. ACIT, Company Circle I(3), Chennai 36 taxmann.6 (Chennai) and Smt. Sriram Indubal vs. ITO 32 taxmann.com 118 (Chennai) as under:- "The ITAT has held that the first condition mentioned in section 54EC(1) is that the investment has to be made within a period of six months from the date of transfer of capital asset. Said proviso mentions that investment on which an assessee could claim exemption under section 54EC(1) shall not exceed Rs. .50 lakhs during a financial year. So .....

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of transfer of capital assets, assessee was definitely eligible to claim exemption upto ₹ 1 crore . and but Assessing Officer deferred with the decisions of Tribunal as the Department has filed appeal against the order of Tribunal in the High Court and made elaborative finding in his order and came to a arbitrary conclusion that the investment of ₹ 50,00,000/- in bonds should be restricted as per exemption u/s.54EC of the act and dealt on the provisions of Sec.45 as under:- Capital .....

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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 spec .....

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ained the facts and argued the grounds and supported his arguments with judicial decisions and produced supporting documents in respect of sale of shares and allotment letter of REC bonds u/sed. 54EC of the Act as on 31.03.2011 and second allotment letter dated 30.04.2011. The ld. Commissioner of Income Tax (Appeals) considered the submissions on the provisions of Sec. 54EC of the Act and Department circular no.3/2008 and but made distinction on the decision relied by the assessee and deferred t .....

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tal gains and investments by the assessee except understanding the provisions of Sec.54EC (1) of the Act were assessee has made investments in REC bonds of ₹ 50,00,000/- each on 28.02.2011 and 27.04.2011 in two financial years. The ld. Assessing Officer and Commissioner of Income Tax (Appeals) has expressed their own opinion in interpreting the definition and the dictionary meaning of any in the provisions further Assessing Officer suo-motu took the decision by distinguishing judicial deci .....

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ers of the lower authorities, CBDT circular and spirit of amendment of Sec. 54EC of the Act vehemently opposed to the grounds of the assessee. 7. We heard the rival submissions and perused the material on record and judicial decisions. The assessee has invested long term capital gains within six months from the date of transfer of Asset in Rural Electrification Corporation bonds (REC) under Sec.54EC of the Act and complied with the provisions of law by purchasing the bondsd in February, 2011  .....

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