TaxTMI 
TaxTMI 
2016 (12) TMI 1081
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....me Tax (Appeals)-29, Mumbai [CIT(A)] erred on facts and in law in sustaining the addition made by the learned Income Tax Officer - 17(3)(3), Mumbai u/s 50C of the Income Tax Act, 1961 to the extent ofRs.19,104/-. 2. The appellant prays that your honours hold that the appellant has not received such excess amount and hence addition u/s.50C of Rs. 19,104/- may be deleted. B) Disallowing the exemption claimed u/s. 54EC - Rs. 17,50,000/- 3. The learned CIT-(A) erred on facts and in law in disallowing the exemption claimed by the appellant u/s. 54EC of Rs. 17,50,000/-. 4.The appellant prays that your honours hold that the appellant had rightly claimed exemption u/s. 54EC of Rs. 17,50,000/- and hence disallowance in this regard may be deleted." 3. The brief facts of the case are that the assessee is an individual and during the year under consideration the assessee had shown income from house property, business, other sources and capital gains. The assessee has earned capital gain on the sale of ancestral property along with her brother and cousins viz. Devji Kanji Building , Princess Street, Mumbai vide Indenture of Assignment made on 13th October, 2008 for a total consid....
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....essing Officer may refer the valuation of the capital asset to a Valuation Officer and where any such reference is made, the provisions of sub-sections (2), (3), (4), (5) and (6) of section16A, clause (i) of sub-section (1) and sub-sections (6) and (7) of section 23A, sub-section (5) of section 24, section 34AA, section 35 and section 37 of the Wealth-tax Act, 1957 (27 of 1957), shall, with necessary modifications, apply in relation to such reference as they apply in relation to a reference made by the Assessing Officer under sub-section (1) of section 16A of that Act. Explanation.-For the purposes of this section, "Valuation Officer" shall have the same meaning as in clause (r) of section 2 of the Wealth-tax Act, 1957 (27 of 1957). (3) Subject to the provisions contained in sub-section (2), where the value ascertained under sub-section (2) exceeds the value adopted or assessed by the stamp valuation authority referred to in sub-section (1), the value so adopted or assessed by such authority shall be taken as the full value of the consideration received or accruing as a result of the transfer.]" The law as contained in Section 50C of the Act is very clear and as in the ins....
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....ot paid on or before 12th April, 2009, the assessee is not entitled to claim deduction u/s. 54EC of the Act which was disallowed by the AO vide assessment order dated 26.12.2011 passed u/s 143(3) of the Act . 6. Aggrieved by the assessment order dated 26.12.2011 passed by the A.O. u/s 143(3) of the Act, the assessee filed first appeal before the ld. CIT(A). 7. Before the ld. CIT(A) , the assessee made elaborate submissions that as per section 54EC of the Act the investment should be made in a specified long term assets at any time within a period of six months after the date of such transfer and the assessee has complied with this condition as the word 'month' has to be reckoned according to British Calendar in terms of section 3(35) of the General Clauses Act, 1897 and hence six months period should be reckoned from end of month in which transfer took place. The assessee relied on the decision of ITAT Mumbai Bench in the case of Yahya E Dhariwala v. DCIT, 17 taxmann.com 159(Mum), CIT v. Brijlal Lohia & Mahabir Prasad Khemka [1980] 124 ITR 485(Cal.) and in the case of CIT v. Kadri Mills (Coimbatore) Ltd. [1977] 106 ITR 846 (Mad.) . It was also submitted that the assessee made....
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....ong term capital gains were computed by the authorities below at Rs. 17,69,104/- . The assessee invested amount of Rs. 17,50,000/- in REC bonds on 24-04-2009 wherein bonds were allotted on 30-04-2009. As per the provisions of 54EC of the Act, the assessee was required to invest the capital gains in long term specified assets within six months from the date of transfer of original asset. Since the assessee invested in REC Bonds on 24-04-2009, it was held by the authorities below that the said investment is beyond six months from the date of transfer of original asset and hence conditions of Section 54EC of the Act were not complied with and the assessee is not entitled for deduction u/s 54EC of the Act. Section 54EC of the Act is reproduced below: "[Capital gain not to be charged on investment in certain bonds. 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 c....
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.... not be allowed under section 80C for any assessment year beginning on or after the 1st day of April, 2006.] Explanation.-For the purposes of this section,- (a) "cost", in relation to any long-term specified asset, means the amount invested in such specified asset out of capital gains received or accruing as a result of the transfer of the original asset; [(b) "long-term specified asset" for making any investment under this section during the period commencing from the 1st day of April, 2006 and ending with the 31st day of March, 2007, means any bond, redeemable after three years and issued on or after the 1st day of April, 2006, but on or before the 31st day of March, 2007,- (i) by the National Highways Authority of India constituted under section 3 of the National Highways Authority of India Act, 1988 (68 of 1988); or (ii) by the Rural Electrification Corporation Limited, a company formed and registered under the Companies Act, 1956 (1 of 1956), and notified by the Central Government in the Official Gazette for the purposes of this section with such conditions (including the condition for providing a limit on the amount of investment by an assessee i....
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....et having being sold on 13-10-2008 . Our above view is supported by decisions of Hon'ble Madras High Court in the case of Kadri Mills (Coimbatore) Limited (supra) wherein the Hon'ble Court held that as definition under the General Clauses Act, 1897 will apply to the term "month" occurring in the Act. The Hon'ble Calcutta High Court in Brijlal Lohia and Mahabor Prasad Khemka(supra) held that as month is not defined under the Act, the expression under the General Clauses Act , 1897 shall apply. The Special Bench of the tribunal has in Alkaben B. Patel v. ITO ( 2014) 43 taxmann.com 333(Ahd. Trib )(SB) has held that in terms of General Clauses Act ,1897 period of six month mentioned in Section 54EC of the Act has to be regarded as six British Calendar months , wherein the Special Bench of the tribunal held as under: "5. We have heard both the sides at length. The legal issue involved is within a narrow compass, as also revolves around few succinct facts. A sale was executed and registered on 10th of June, 2008. As per the Revenue Department, the assessee was required u/s.54EC to invest in NHAI bond on or before 10th of December, 2008,i.e. within six months, however, the said investm....
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....duly analyzed this argument. The term 'month' is not defined in The Income Tax Act, therefore seeking the help of an another statute ; hence, examined the term "month" as per General Clauses Act, 1897 which says- 'Section 3 defines - (35) "month" shall mean a month reckoned according to the British calendar.' It may not be out of place to mention that in Section 54E, 54EA and 54EB, the phrase is identical, i.e., "within a period of six months after the date of such transfer". We have been informed that this phrase otherwise is not used by the legislator in any other provisions of IT Act, 1961 or IT Rule, 1982. Which means a specific period is prescribed for the purpose of investment in certain specified assets in respect of computation of capital gain. Meaning thereby, an incentive is prescribed by the statute to a tax payer, who has earned Long Term Capital Gain, to get relief if invest the gain in any of the specified asset. But the investment has to be made at any time within a period of six months after the date of such transfer. 5.4 Being a beneficial provision through which an incentive is given, an argument has been raised, that such provision ....
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....gher forum and then it was decided that the question whether "month" means a "lunar month" or a "calendar month" would depend on intention for the usage of the term " month". In British Calendar a month is a unit of period used in a Calendar. It may not be out of context to mention that this system was invented by Mesopotamia. An average length of a month is 29.53 days; but in a calendar year there are 7 months with 31 days, 4 months having 30 days and one month has 28/29 days. It can be possible that under common parlance probably it meant a lunar month but in calculating the specified number of months that had elapsed after occurrence of a specified event then a General Rule is that the period of a month ends on the last day. Therefore, a month ends by the last date of that month. One of the ITAT Bench, Mumbai in the case of Yahya E. Dhariwala v. Dy. CIT [2012] 49 SOT 458/17 taxmann.com 159 (Mum) has also opined that quote "six months period should be reckoned from the end of the month in which the transfer takes place "unquote. Thereafter in the case of Aquatech Engineers, 36 CCH 167 (Mum.), again it was decided to grant the exemption of investment u/s.54EC if the same has been ....
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.... the dispute in respect of law of limitation the Hon'ble Court has clearly held that there is nothing in the context of section 256(2) to warrant the conclusion that the word 'month' in it refers to a period of 30 days, therefore, refers to six months in Section 256(2) is to six calendar months and not 180 days. Rather, in this cited decision an interesting observation of the court was that while comparing the precedents the contextual setting is to be examined and if entirely distinct and different then do not warrant to apply universally. Even in the case of Tamal Lahiri v. Kumar P. N. Tagore AIR 1978 (SC) 1811, it was opined while interpreting Section 533 of Bangalore Municipal Act, 1932 that the expression six months in the said section means six calendar months and not 180 days. A copy of the judgment is placed before us. The purpose of mentioning this plank of argument is that after scrutinizing few more Sections of The Act it is evident that on some occasion the Legislature had not used the terms " Month" but used the number of days to prescribe a specific period. For example in Section 254(2A) First Proviso it is prescribed that the Tribunal may pass an order gr....