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Nashik Jillha Krishi Audyogik Sahakari Sangh Ltd. Versus The Commissioner of Income Tax-I, Nashik

2016 (9) TMI 206 - ITAT PUNE

Revision u/s 263 - exemption under section 54EC - Held that:- Commissioner in the present case has purported to act in exercise of power under section 263 on the ground that the order of the Assessing Officer in granting exemption under section 54EC to the extent of ₹ 1 crore is without any enquiry and therefore erroneous in so far as prejudicial to the interests of the Revenue. We notice that there are several judicial precedents on the issue of allowability of exemption to the extent of .....

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be viewed as arbitrary or unreasonable. The issue involved is pre-dominantly legal in nature and does not require any factual enquiry. On objective consideration of the facts on record, it is difficult to hold that action of the Assessing Officer was erroneous per se and hostile to the interest of the Revenue. Thus, source of power to set-aside the assessment order is not traceable to section 263 of the Act. In view of upholding the exemption to the extent of ₹ 50 lakhs each invested in l .....

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945/PN/2014 - Dated:- 29-7-2016 - SHRI VIKAS AWASTHY, JM AND SHRI PRADIP KUMAR KEDIA, AM For The Appellant : Smt. Deepa Khare For The Respondent : Shri J. P. Chandrakar ORDER PER PRADIP KUMAR KEDIA, AM : The captioned appeal by the assessee is directed against an order of the Commissioner of Income Tax-I, Nashik (in short the Commissioner ) dated 10.10.2014 whereby the assessment order passed by the Assessing Officer under section 143(3) of the Income Tax Act, 1961 (in short the Act ) dated 30.0 .....

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ion 143(3) for the assessment year 2010-11 was completed by the Assessing Officer determining the total income of ₹ 15,81,92,480/- on 30.03.2013. Thereafter, the Commissioner in exercise of its revisionary power, issued notice under section 263 of the Act dated 20.09.2014 requiring the assessee to show-cause as to why the assessment so framed under section 143(3) should not be set-aside or modified. It was alleged by the Commissioner that examination of records revealed that assessment ord .....

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(long term asset) bearing Survey No.881/1A on 31.12.2009 for a consideration of ₹ 15,67,91,800/-. Thus resulted in long term capital gains of ₹ 15,11,02,283/- in the hands of the assessee. The assessee made investments in long term specified Bonds (Rural Electrification Bonds) within the period of six months i.e. before 30.06.2010 of ₹ 1 crore. ₹ 50 lakhs were invested in the same financial year 2009-10 i.e. on 28.02.2010. Other amount of ₹ 50 lakhs were invested in .....

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were made in different financial years within the period of six months after the date of transfer of capital asset. The investment in one financial year does not exceed ₹ 50 lakhs. Therefore, there was no error on the part of the assessee to claim exemption under section 54EC of ₹ 1 crore. Likewise, the action of the Assessing Officer in allowing the exemption is not erroneous and against the interests of the Revenue. For the proposition that investment of ₹ 50 lakhs each made .....

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ubmitted before the Commissioner that section 54EC has been amended by Finance (No.2) Act, 2014 whereby the investment made by an assessee in the long term specified asset is restricted to ₹ 50 lakhs irrespective of one or more financial years involved. It was the case of the assessee before the Commissioner that this amendment applies in relation to assessment year 2015-16 and subsequent years and has prospective effect and therefore it is implied that investments of ₹ 1 crore in tw .....

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udicial to the interests of the Revenue. Consequently, the Commissioner set-aside the assessment made under section 143(3) with directions to re-frame the assessment after proper enquiries on the aforesaid issue. Aggrieved by the aforesaid revisionary order of the Commissioner under section 263, the assessee has preferred an appeal before the Tribunal. 4. The Ld. Authorized Representative for the assessee, Smt. Deepa Khare reiterated the aforementioned facts and submitted at the outset that in v .....

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she relied upon the decision of Co-ordinate Bench of the Tribunal in the case of Dr. Arvind S. Phadke vs. Addl.CIT in MA No.74/PN/2014, order dated 20.02.2015 and another decision in the case of ITO vs. Smt. Bala R. Venkitachalam (2016) 71 taxmann.com 219 (Pune - Trib.) to support her plea. She further relied upon the subsequent amendment carried out in section 54EC applicable to assessment year 2015-16 and subsequent assessment years to buttress her proposition that it was permissible for the a .....

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nd, relied upon the order of the Commissioner and submitted that in the absence of requisite enquiry on the issue, the action of the Commissioner under section 263 was in accordance with law and justified. 6. We have carefully considered the rival submissions. The Commissioner in the present case has purported to act in exercise of power under section 263 on the ground that the order of the Assessing Officer in granting exemption under section 54EC to the extent of ₹ 1 crore is without any .....

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