TMI Blog2018 (10) TMI 67X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee Deduction u/s 54F denied - non deposit any amount under the capital gain account scheme - Held that:- there was no need to deposit any amount under the capital gain account scheme. In holding so we find support & guidance from the judgment of Hon’ble Karanatka High Court in the case of CIT Vs. K. Ramachandra Rao [2015 (4) TMI 620 - KARNATAKA HIGH COURT] - No disallowance u/s 54F can be made in the instant case on account of non-deposit of money in capital gain account scheme. Therefore, we have no hesitation in reversing the order of authorities below. Hence ground of appeal of the assessee is allowed. - I.T.A. No.2954/Ahd/2015 - - - Dated:- 16-7-2018 - Shri Mahavir Prasad, Judicial Member And Shri Waseem Ahmed, Accountant Member For the Appellant : Shri Shri S. N. Soparkar Parin Shah, A.R. For the Respondent : Shri Mudit Nagpal, Sr. D.R. ORDER PER WASEEM AHMED, ACCOUNTANT MEMBER: The captioned appeal has been filed at the instance of the assessee against the appellate order of the Commissioner of Income Tax(Appeals)-13, Ahmedabad [CIT(A) in short] vide appeal no.CIT(A) 13/Ahd/Intl.Taxn./103/2014-15 dated 10-08-2015 arising in the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uring 4553 sq. Mtrs. The assessee acquired such a plot of land in the year 1984. The assessee during the year has sold such a piece of the plot for ₹ 1,10,00,000/- vide dated 19-03-2012. The assessee on the sale of such a plot of land has worked out a long-term capital gain of ₹ 1,06,96,151/- only. The assessee against such long-term capital gain income has claimed deduction u/s 54EC of the Act for ₹ 1,00,00,000/- by way of investing in NHAI bonds. However, the AO during the proceedings observed that the provision of section 54EC allowing the exemption on account of investment in the specified bonds is limited to the extent of the maximum amount of ₹ 50,00,000/-. The AO in support of his claim relied on the order of Hon ble Tribunal of Jaipur in the case of ACIT vs. Shri Rajkumar Jain Sons (HUF) reported in 50 SOT 2013 vide order dated 31-01-2012. The amendment in Section 54EC has clarified the ambiguity that deduction will be claimed only to the extent of ₹ 50,00,000/-. The AO also observed that the bonds were allotted by the National Highway Authority of India dated 30th May 2012 and 4th July 2012 respectively. Therefore, the investment u/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tment of bond in the subsequent F.Y. i.e., 30th April 2012 and 31st May 2012, therefore, the same cannot be treated as eligible for deduction u/s 54EC of the Act. The ld. AR in his rejoinder submitted that the date of payment is relevant for claiming the deduction u/s 54EC of the Act. Thus, the date of allotment for the bonds cannot be criteria for deciding the year of exemption under section 54EC of the Act on account of investment made in NHAI. The ld. AR in this regard relied on the order of Hon ble ITAT Bangalore Bench in the case of Shri Vivek Jairazbhoy vs. DCIT in ITA No.236/Bang/2012 vide order dated 14-12-2012, wherein it was held as under: 10.2 The assessee has placed reliance on a decision of the ITAT, Bombay Bench in the case of Kumarpal Amrutlal Doshi Vs. DCIT in ITA No.1523/Mum/2010 dt.9.2.2011 wherein the Tribunal relying on the decision of the Hon'ble Apex Court in the case of CIT Vs. Ogale Glass Works Ltd (25 ITR 529) has held that payment by cheque subsequently realized on the cheque being honoured and encashed relates back to the date of receipt of the cheque and in law the ITA No.236/Bang/12 date of payment is the date of delivery of the cheque. In t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee for ₹ 1,00,00,000/- under the provision of Section 54EC of the Act. We find that in the identical facts and circumstance this tribunal in the case of Aspi Ginwala, Shree Ram Engg. Mfg. Industries vs. ACIT reported in 20 taxmann.com 75 has decided the issued in favour of the assessee. The relevant extract of the order is reproduced below: The dispute which is to be decided in this case is whether as per the provisions of section 54EC the assessee is entitled for exemption of ₹ 1 crore as six months period for investment in eligible investment involves two financial years. If the answer to this question is 'yes', whether investment made by the assessee in NHAI Bonds on 26-5-2008 beyond six months period is eligible for exemption in view of the fact that no subscription for eligible investment was available to the assessee from 1-4-2008 to 26-5-2008. [Para 7] It is clear from proviso to section 54EC that where assessee transfers his capital asset after 30th September of the financial year he gets an opportunity to make an investment of ₹ 50 lakhs each in two different financial years and is able to claim exemption up to ₹ 1 crore under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... investment of ₹ 50 lakhs in any financial year, it would have the benefit of section 54EC(1). [Para 7] From the above judgment, there remains no ambiguity that the assessee is eligible for deduction u/s 54EC of the Act for the investment made in NHAI bonds to the extent of ₹ 1,00,00,000/-. Therefore, we are inclined to reverse the order of authorities below, hence ground of appeal filed by the assessee is allowed. 7. The second issue raised by the assessee in ground no.4 and 5 is that ld. CIT(A) erred in confirming the order of AO by denying the exemption claimed u/s 54F of the Act. The assessee besides the exemption claimed u/s 54EC of the Act as discussed in the preceding paragraph has also claimed the deduction of ₹ 15,00,000/- u/s 54F of the Act. The assessee claimed to have purchased a piece of land admeasuring 149.7 sq. Mtrs. from M/s Shreeji Villas. The assessee further claims to have made the payment for the purchase of plot viz-a-viz cost of construction as detailed under: 06/04/2011 Ch No.116781 1500000 Land 25/03/2013 Ch No.756125 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of original assets. Therefore, he is eligible for deduction u/s 54EC of the Act. The assessee in support of his claim has submitted that he has paid service tax to Shreeji Villas for the construction of the house. The assessee also enclosed the copy of service tax receipts. However, the ld. CIT(A) disregarded the claim of the assessee and confirmed the order of the AO by observing as under: 8. Finding I have perused the order by the AO and submissions made in the regard. The AO has brought out facts in Para 4.3 and 4.4 (supra). The AO is factually correct in giving a finding that it was only a plot which was purchased by the assessee. The appellant has also not submitted any cogent evidences I support of its claim that it was a residential property. Further, nor any evidence furnished to state that unutilized portion was invested in capital gain bond to claim exemption. The submission made by the appellant no way rebut the factual finding by the AO. This ground also is dismissed. Being aggrieved by order of the ld.CIT(A) assessee is in the second appeal before us. The ld. AR before us submitted that he had invested in the plot of land and the constructio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 15/03/2013 Withdrawal from Bank 50000 Construction 29/03/2013 Ch No.756126 100000 Construction 25/03/2013 Ch NO.756127 48700 Service Tax on Construction Total Amount Paid for Resident House 3273700 TAXABLE LONG TERM CAPITAL GAIN NiL The assessee claimed deduction u/s 54F for ₹ 15,00,000/- on account of purchase of land. At this juncture, we find relevant and important to reproduce the provision of Section 54F of the Act, which is reproduced below: [Capital gain on transfer of certain capital assets not to be charged in case of investment in residential house. 1 54F. (1) 2 [Subject to the provisions of sub-section (4), where, in the case of an assessee being an individual or a Hindu undivided family], the capital gain arises from the transfer of any long-term capital asset, not being a residential house (hereafter i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gard, we note that the assessee at the most can deposit the entire sale construction of ₹ 1,10,00,000/- to the Income Tax Capital gain account scheme. But the assessee in the instant case has already invested ₹ 1,00,00,000/- in the bonds of NHAI eligible for deduction u/s 54EC of the Act. Similarly, the assessee has also invested in the piece of the plot of land for ₹ 15,00,000/ during the specified time. Thus, it is clear that the assessee has already made the requisite investment exceeding ₹ 1,10,00,000/-. Therefore, the assessee is eligible for deduction u/s 54F of the Act on the eligible amount, which has been worked out by the AO at ₹ 14.45 lakhs as evident from his order. The relevant extract is reproduced below: Clearly, the new asset in this case cost ₹ 15,00,000/-. The net consideration received in relation to the original asset was ₹ 1,10,00,000/- and the capital gains arising to the assessee was ₹ 1,06,96,151/-. Very clearly Section 54F(1)(b) would have applied for computing the allowable benefit to the assessee. The same can be worked out as ₹ 15,00,000/Rs.1,10,00,000 1,06,96,151 = ₹ 14.45 Lacs and not & ..... X X X X Extracts X X X X X X X X Extracts X X X X
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