TaxTMI 
TaxTMI 
2013 (1) TMI 233
X X X X Extracts X X X X
X X X X Extracts X X X X
....under CASS, she explained her claim of exemption under section 54EC of the "Act" qua the amount of Rs. 35.00 lakhs invested in REC bonds and explained the details therein as under: "Further to my earlier submissions and hearing proceedings I wish to furnish the following facts and details for your kind consideration. In respect of transfer of long term capital assets between 1.1.2006 and 30.6.2006 the time limit for investment in REC bonds for exemption u/s 54EC was extended upto 31.12.2006 (vide notification F.No. 142/09/2000 TPL dt. 30.6.2006 enclosed). In terms of the notification REC opened the bonds for issue upto a sum of Rs. 4,500/- crores on 20.7.2006. The bonds issued earlier and available for investment were closed on 29.3.2006. There was no other bonds notified and available for investment thereafter u/s 54EC till 20.7.2006 when the above notified bonds were issued by REC. The above bonds opened for issue by REC upto a limit of Rs. 4,500/- crores was fully subscribed within 10 days from the date of issue 20.7.2006 and the bonds were not available and closed for public investment from 2.8.2006 (vide copy of REC letter dt. 1.8.2006 issued to all collecting banks). Aft....
X X X X Extracts X X X X
X X X X Extracts X X X X
....section 54EC and make fresh assessment by observing as under: "Submissions of the assessee are considered. Exemption from capital gains tax by making investments in various prescribed assets is a benevolence extended to the assessee by the Government. The assessee should have taken care that she complies with the investments within the time. If REC Bonds are not available the assessee in order to comply could have taken other available avenues that were not in short supply for the purpose of claiming exemption u/s 54EC. Having not done that, investment beyond the permitted time cannot be said to be within the parameters of the said Circular when it is specifically stated the last date for making investment. The AO has not applied the provisions of the Income Tax Act properly which has resulted in under-assessment. The AO is hereby directed to withdraw the exemption granted for u/s 54EC as discussed hereinbefore and make fresh assessment after giving opportunity to the assessee. The assessment should be modified to the extent stated above." Therefore, the assessee is aggrieved. 6. Reiterating he submissions made in the ground of appeal, the AR representing the assessee has veheme....
X X X X Extracts X X X X
X X X X Extracts X X X X
....parties at length and also perused relevant materials referred as well as case law cited. Undisputed facts of the case are that on 10.01.2006, the assessee had sold her agricultural land for Rs. 36,24,863/- and chose to invest an amount of Rs. 35.00 lakhs in the REC bonds in January, 2007 for claiming exemption under section 54EC of the "Act". At this stage, we deem it appropriate to reproduce the statutory provision as under: 54EC. (1) Where the capital gain arises from the transfer of a long-term capital asset (the capital asset so transferred being hereafter in this section referred to as the original asset) and the assessee has, at any time within a period of six months after the date of such transfer, invested the whole or any part of capital gains in the long-term specified asset, the capital gain shall be dealt with in accordance with the following provisions of 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 t....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the express provision prescribing six months time limit which stood extended upto 31.12.2006. We reiterate here that relief of exemption under section 54EC can be granted within time limit as prescribed by the legislative provision and not beyond that. Hence, we are unable to concur with assessee's contention that the time limit for investment which was admittedly extended by notification upto 31.12.2006 can be stretched upto 27.01.2007 (supra) by exercising jurisdiction under the "Act". 9. Coming to the case law cited by the assessee, we observe that in case of Cello Plast (supra), the assessee led ample evidence corresponding her intention to invest in the bonds even during the time limit prescribed i.e. six months which further stood extended upto 31.12.2006. In the said case, the sale deed was executed on 22.03.2006. While dealing with her submission, the Coordinate Bench of Mumbai ITAT has held as under: "11. We have heard the rival submissions and considered them carefully. After taking into consideration all the facts and material on record, we find that the assessee deserves to succeed in this ground also. There is no dispute that the assessee has sold its capital asset ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....from other sources and long term capital gains on sale of property. The requisite deposit to avail exemption u/s 54F was made by the assessee on 1.9.1995. The AO disallowed the claim of the assessee for exemption u/s 54F on two grounds viz first the assessee did not have regular business income and so the prescribed date for filing the return was 30.6.1995 treating it as income from other sources instead of 31.8.1995; secondly, even if the assessee was having business income the deposit was still not made within the prescribed time i.e. 31.8.1995, and the deposit was made on 1.9.1995. The CIT(A) found that there was a strike in the bank and that it was also certified by the concerned bank official of PNB in which the deposit was made. 50 according to the CIT(A), the aspect of deposit being made on 1.9.1995 had no particular relevance; accordingly, he held that commission earned by the assessee was not business income and since commission income was not business income, the due date for filing the return as 30.6.1995. On appeal, the Tribunal allowed the claim of the assessee by holding that due to exceptional circumstances the assessee could not deposit the amount within the prescri....