TMI Blog2019 (7) TMI 420X X X X Extracts X X X X X X X X Extracts X X X X ..... ecified bonds, therefore, the assessee is not eligible for the claim of exemption under section 54EC - Decided against assessee. - ITA No.4904/Del/2016 - - - Dated:- 26-3-2019 - Shri R.K. Panda, Accountant Member For the Assessee : Shri K. Sampath, Advocate And Shri V. Raj Kumar, Advocate For the Revenue : Shri S.L. Anuragi, Sr.DR ORDER This appeal by the assessee is directed against the order dated 29th July, 2016 of the CIT(A)-12, New Delhi, relating to Assessment Year 2011-12. 2. The only effective ground raised by the assessee reads as under:- On the facts and in the circumstances of the case and in law the ld.CIT(A) erred in confirming the action of the Assessing Officer in not allowing deduction u/s 54EC of the Income-tax Act, 1961 being the amount of investment made in the purchase of REC Bonds. The above action being arbitrary, erroneous, misconceived and unjust must be quashed with directions for relief. 3. Facts of the case, in brief, are that the assessee is an individual and derives income from other sources and long ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rejected the claim of deduction u/s 54EC of the Act. He accordingly made addition of ₹ 49,63,932/- to the total income of the assessee. 5. Before CIT(A), it was submitted that the assessee had entered into an agreement with Mrs. Puja Sethi and Mrs. Sachin Sethi for purchase of a plot No.24, Block-UP, Pitampura, Delhi measuring 150 sq. yards vide receipt cum Agreement dated 24.05.2011 for a total consideration of ₹ 60 lakhs out of which she had paid ₹ 20 lakhs as exempt money vide cheque No.833521 dated 24.05.2011 drawn from her account maintained with Syndicate Bank. Vide cheque No.833523 an amount of ₹ 15 lakhs and vide cheque No.833522 dated 23rd May, 2011 another ₹ 20 lakhs were paid. However, since the deal did not work out, she issued two legal notices against the sellers, namely, Mrs. Puja Sethi and Mr. Sachin Sethi. She received back the amount of ₹ 55 lakhs on 21st February, 2012 and, thereafter, she invested the amount in REC bonds on 21.03.2012. It was accordingly argued that the assessee initially paid the money for purchase of house and since the deal did not materialize, the money was obtained after issue of legal no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in specified assets before the date of transfer of asset the amount so invested will qualify for exemption u/s 54E of the IT Act, 1961. In the said Circular the technical interpretation of section 54E was considered liberally and it was felt that the strict interpretation of the said provision would go against the purpose and spirit of the section. Referring to the Notification dated 30th June, 2006 issued by CBDT vide F.No.142/09/2006-TPL, he submitted that the CBDT with a view to removing the hardship caused to taxpayers, in exercise of powers conferred by clause (c) of subsection (2) of section 119 of the Income-tax Act, 1961, ordered that the limitation of six months for making the investment under section 54EC of capital gains arising from the transfer of a long-term capital asset, is extended - upto 30th September, 2006 in case of persons where the long-term capital asset was transferred between 29.09.2005 and 31.12.2005 (both dates inclusive); and upto 31st December, 2006 in case of persons where the long-term capital asset was transferred between 01.01.2006 and 30.06.2006 (both dates inclusive). He accordingly submitted that CBDT is also taking liberal approach for givin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd Tribunals are taking a liberal view for granting exemption u/s 54EC where the respective assessees have invested in the specific bonds beyond the period of six months. He accordingly submitted that since the assessee in the instant case had initially invested the amount in purchase of a property and since the deal could not materialize had invested the money so refunded after legal notices, towards purchase of REC Bonds, therefore, the exemption u/s 54EC could not be denied to the assessee on account of mere technicalities. A liberal approach should be adopted and the assessee be given the benefit of exemption. 9. The ld. DR, on the other hand, heavily relied on the order of the Assessing Officer and CIT(A). He submitted that since the assessee in the instant case has not fulfilled the conditions prescribed u/s 54EC and made the deposit after a period of more than one year as against the period of six months provided in the statute, therefore, the order of the CIT(A) being in accordance with the law is fully justified and has to be upheld and the grounds raised by the assessee should be dismissed. 10. I have considered the rival arguments made b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case. In some of the decisions the time period for investment in 54EC bonds were extended since the bonds were not available in the market during the time when the assessee was supposed to invest in the specified bonds. Similarly, in certain cases the assessee has invested the money prior to the transfer of the property out of the advances received and therefore it was held that assessee is entitled to claim the exemption. In the instant case the assessee has not invested the amount in the specified bonds within the specified period prescribed as per the provisions of section 54EC. It is not the case of the assessee that the bonds were not available in the market at the stipulated time. Although the assessee had filed certain legal notices as available in the paper book the copy of the agreement to sell of the said property is not filed in the paper book. The argument of the ld. counsel for the assessee that beneficial provisions should be interpreted liberally is also not applicable in the instant case since in my opinion such interpretations cannot be stretched to an extent so as to make the provisions of the Act redundant. In any case, since the assessee has not fulfilled the co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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