TaxTMI 
TaxTMI 
TaxTMI 
2012 (3) TMI 257
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....deration, the assessee sold the property for Rs. 2.47 Crores on 13.12.2007 and disclosed capital gain of Rs. 1,14,09,880/-. The assessee claimed deduction u/s 54EC in respect of Long Term Capital Gain amounting to Rs. 1.00 Crore i.e., invested in specified capital gain bond (Rs. 50.00 Lacs on 31.03.2008 + Rs. 50.00 Lacs was made on 10.06.2008). The only dispute is with regard to the next investment of Rs. 50 Lacs made on 10.06.2008, which was not considered by the AO by relying upon the Proviso below Sec.54EC which provided that investment in any financial year cannot exceed Rs. 50 Lacs. Hence, the AO was of the view that the assessee having made a claim of Rs. 1.00 Crore, exceeded the investment limit prescribed in the proviso and therefore, restricted the deduction upto Rs. 50 Lacs accordingly. 2.3 In the first appeal, the ld. CIT(A) held as under: "3.3 Facts of the case and argument of the appellant have been carefully considered. The proviso to section 54EC(1) reads as follows: "Provided that the investment made on or after the 1st day of April, 2007 in the long-term specified asset by an assessee during any financial year does not exceed Rs. 50,00,000/-." 3.4 It is clear f....
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....s on account of litigation pending in the Court. There was an injunction of Hon'ble High Court. The Hon'ble Apex Court observed that mere mistake or error committed by the Court cannot be a ground for restitution. The Hon'ble Apex Court also held as under:- ''In the case, Essar case was categorically told by letter dated 28-05-2002, which is much prior to the expiry of the period that time for availing the exemption cannot be extended. Admittedly, Essar failed to meet the deadline. In that factual scenario, the exercise undertaken by the High Court in the impugned judgement by directing various adjustments which virtually re-wrote the State's exemption scheme, is an exercise which is, with great respect, neither warranted in law nor supported by precedents. There is no question of equity here, an exemption is a stand alone process. Either any industry claiming exemption comes within it or it does not.'' 2.5 Before us, the ld. AR has filed the following submissions. ''1. For better appreciation Sec. 54EC(1) is reproduced hereunder: "[Capital gain not to be charged on investment in certain bonds. 54EC. (1) Where the capital gain arises fro....
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.... Ground taken by the Revenue do not arises from the order the ld. CIT(A): A bare reading of the ground suggests that this issue was never raised out by the AO nor therefore, considered by the ld. CIT(A). In fact, this is an altogether new plea or new ground taken by the Revenue at this stage now, which is not permissible. It has been held in Indian Steel & Wire Products Ltd. v. CIT [1994] 208 ITR 740 (Cal.) (DPB 17-20) that an additional plea by the appellant, which altogether changes the complexion of the case as originally brought before the Commissioner (Appeals) and the Tribunal in second appeal, is not permissible to be raised at the stage of hearing. The respondent cannot be met with a surprise at this stage. 4. On merits, also however, the Revenue has got no case in as much as a careful reading of the provision contained u/s 54EC(1) requires the assessee only to invest the whole or any part of capital gains within a period of six months. It is not denied that the entire investment of Rs. 1 Crore was invested within the period of six months i.e. Rs. 50 Lacs on 31.03.2008 and the next Rs. 50 Lacs was made on 10.06.2008. This is clearly evident from the application no.105463 w....
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....ion 54EC were complied with by the assessee." Also refer CIT v. Smt. Beena K. Jain [1995] 217 ITR 363 (Bom.) (DPB 16) held that the relevant date for the purposes of section 54F is when the petitioner paid the full consideration amount on the flat becoming ready for occupation and obtained possession of the flat, and not the date of registration of the agreement of purchase. In CIT v. Ajit Singh Khajanchi [2007] 211 CTR 403 (MP) held that "Capital gains - Exemption under s.54F - Absence of registered deed - Purchase of house not evidenced by registered deed - Exemption under s.54F cannot be denied - In order to claim benefit of provision of s.54F, it is not necessary that the assessee should have become the owner of the house - Sec.54F speaks of purchase of house - Registration is not imperative - Balraj v. CIT [2002] 173 CTR (Del.) 452: (2002) 254 ITR 22 (Del.) relied on." 6. The contention of the Revenue that the deemed date of allotment is 30.06.2008 firstly, is of no use and secondly, even otherwise is contradictory in as much as the period for which interest was paid by National Highways Authority of India was from 12.06.2008 and not from 30.06.2008 (PB 2). Again there is ....
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....ix months after the date of such transfer. From the reading of the main provision and the Proviso thereto together, it is crystal clear that the assessee has to make investment within the period of six months to avail the exemption, whether falling in one or even more financial year/s. 2. Further the words used in the Proviso is 'any' and not 'relevant financial year' which implies that such a limit of Rs. 50 Lacs is for each financial year. The assessee having made investment not exceeding Rs. 50 Lacs in each financial year 2007-08 & 2008-09, was thus eligible for the exemption. The plain, literal and unambiguous interpretation of the Proviso also make it clear that the amount of investment should not exceed Rs. 50 Lacs during any financial year which implies that the assessee is free to make investment within a period of six months within which if more than one financial year fall, the investment may exceed Rs. 50 Lacs. It is settled that the Court cannot read something which is missing in the statute. Therefore, the word any cannot be interpreted differently. 3.1 The law is well settled that the role and scope of Proviso is not to enlarge or to run contrary to ....
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....annot be denied the exemption by misreading the proviso. The law nowhere specifically bar investment more than Rs. 50 Lacs in any case. 5. The Legislature in various exemption provisions contained u/s 54, 54B, 54F, 54G etc., has given the assessee a liberty to invest in the purchase/construction of house property etc. within a period of 2/3 years after the date of transfer. Thus, the activities of investment can extend beyond the relevant financial year. The interpretation of the Revenue that the investment can be made once only and in the financial year relating of the subjected assessment year and not beyond that, is completely ignoring the entire scheme of the capital gain." 2.7 We have heard both the parties. Section 54EC was introduced by the Finance Act 2001 w.e.f. 01-04-201. It was provided in Section 54EC that in case the amount of Long term capital gain is invested in the long term specified asset then the assessee is not required to pay the capital gain tax. The long term specified assets were also defined in Explanation b to Section 54EC. There was no limitation imposed for the purpose of investment. Subsequently, Section 54EC was amended by the Finance Act 2006. As pe....
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....im in the bonds notified as 'long term specified asset'. The Hon'ble Madras High Court in the case of Areva T & D India Ltd. v. Asstt. CIT [2010] 326 ITR 540/[2009] 177 Taxman 192 had an occasion to consider as to whether the conditions imposed in the notification are ultra virus u/s 54EC of the Act. According to the Hon'ble High Court, it was held that conditions mentioned in the Notifications are valid because Section 54EC was amended by the Finance Act 2007 w.r.e.f. 01-04-2006. The proviso has already been introduced in Section 54EC of the Act. The contention of the assessee is that the proviso provides for making investment of Rs. 50.00 lacs in any financial year. The proviso is an exception to the main Section. The investment is to be made within six months from the date of transfer of assets. As per counsel of the assessee, if the period of six months spills over the next financial year in which transfer has taken place then the assessee can make investment of Rs. 50.00 lacs in the financial year in which transfer has taken place and Rs. 50.00 lacs in the subsequent financial year provided the investment is within the period of six months from the date of tra....