TaxTMI 
TaxTMI 
2018 (10) TMI 67
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....ment of Rs. 50 lakh each in two financial years as permissible under provisions of the section. 2. Ld. CIT (A) erred in law and on facts in confirming view of AO that date of allotment & certificate of bonds indicated investment in the same financial year although within six months of sale of land. CIT (A) ought to have held date of payment / encashment of cheque to be reckoned for considering the investment of Rs. 50 lacs each falling in two consecutive financial years. 3. Ld. CIT (A) erred in law and on facts in not considering decisions of the Hon'ble jurisdictional Tribunal directly on issue under appeal submitted during the appellate proceedings. Noncognizance of binding decisions of Hon'ble Tribunal is highly improper and against judicial propriety. 4. Ld. CIT (A) erred in law and on facts in confirming disallowance by AO of Rs. 15 lakhs exemption claimed u/s 54F of the Act. Ld. CIT(A) erred in not appreciating documents evidencing construction of residential property by the assessee. Ld. CIT (A) ought to have allowed deduction as claimed. 5. Ld. CIT (A) erred in law and on facts in not adjudicating Ground # 5 of the appeal alternatively claiming allowance....
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....e assessee relied on the following orders: 1. Smt. Jyotikaben Bhupendrabhai Shah vs. The Asst. Commissioner of Income Tax Circle 10, Ahmedabad (ITA No. 2013/Ahd/2011) (ITAT Ahmedabad on 05/09/2014) 2. Aspi Ginwala vs. The Asst. Commissioner of Income Tax Circle-5, Baroda (ITA No.3226/Ahd/2011) (ITAT Ahmedabad on 30/03/2012) 3. CIT, Chennai vs. C Jaichander (T.C. (A) No.419 and 533 of 2014) (Madras High Court on 15/09/2014) However, the ld. CIT(A) disregarded the contention of the assessee by observing as under: "As it could be seen that legislature has expressed that only one investment is allowed under this section. This is clear by the word 'investment' used by the legislature. The AO has also highlighted few cases in which the view taken by Hon'ble Tribunal is in his support namely 1. ACIT vs. Rajkumar Jain and sons 19 taxmann.com 27(JP) and 2. Areva T&D vs. ACIT 177 taxmann 192 (Madras). Further the AO has held, even if interpretation of the appellant is held correct, both the investment have been made in the one FYr that is 2012-13. Hence the assessee has made an excess claim of Rs. 50 lakhs u/s 54EC. The appellant has not been able to rebut the factual....
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....nd therefore the assessee in the present case is on an even better footing than the case relied upon by the learned counsel for the assessee. 10.3 Further, in the case of Aspi Ginwala & Others (supra) cited earlier in this order, the assessee was unable to invest in Bonds within a period of six months as the issue was not open and did so the moment the same was made open to public and thus the allotment was made after the statutory period of six months. The ITAT, Ahmedabad Bench, relying on an earlier decision of the ITAT, Mumbai in the case of Ram Agarwal Vs. JCIT reported in 81 ITD 163 held that the assessee therein was prevented by sufficient cause from investing within the statutorily permitted period of six months and allowed the assessee exemption under section 54EC of the Act in respect of the said investment. In the present case before us, the assessee has made payment for the investment in NHAI which was encashed on 9.6.2008 well within the statutorily permitted period of six months from the date of sale of the property (i.e. upto 13.6.2008). What is to be reckoned here is the date of payment and not the date of allotment as the same is not in the control of the assessee. ....
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....t is found that the assessee was to make investment in such bonds between 1-4-2008 to 21-4-2008. There is no dispute about the fact that subscription of eligible bonds was closed during this period till 26-52008 and on the 1st day of the reopening of the subscription, the assessee made this investment. Under the circumstances, the assessee was prevented by sufficient cause which was beyond his control in making investment in these bonds within the time prescribed. Further various judicial authorities have taken a view that exemption should be granted in such cases where there is a delay in making investment due to non-availability of the bonds and have held that it is a reasonable cause and the exemption should be granted. [Para 9] Thus, it is held that the investments made by the assessee on 26-5-2008 beyond six months was 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. Similarly, we also find support and guidance from the judgment of Hon'ble Madras High Court in the case of C. Jaichander (Supra) reported in 370 ITR 579, wherein it has been held as under: "On a plain reading ....
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....54F of the Act. However, the AO during the assessment proceedings observed certain facts as detailed under: i. The purchase deed for the plot of land was executed on 28/03/13 for the purchase of a plot of land. The requirement of the Section 54F requires that the assessee needs to invest in the residential house and not in the piece of land. ii. Even it is presumed that the land was purchased for the construction of the residential house then also assessee failed to complete the construction within three years from the date of transfer of the original assets. iii. The assessee was required to deposit the capital gain arising from the transfer of capital assets in a capital gain account scheme before the due date of filing of Income Tax Return as specified u/s 139(1) of the Act but the assessee failed to do so. iv. Without prejudice to the above, it was also observed that the deduction u/s 54F had been wrongly computed for Rs. 15 lacs as such it works out to Rs. 14.45 lacs only (Rs.15,00,000 / Rs. 1,10,00,000 x 1,06,96,151) In view of the above, the AO disallowed the claim of the assessee for Rs. 15,00,000/- and added to the total income of the assessee. 8. Aggr....
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.... 1,10,00,000/-. The assessee on sale of such piece of land has earned long-term capital gain income for Rs. 1,06,96,151/- only. The necessary details of capital gain income and deduction claimed u/s 54EC and 54F of the Act stands as under: Sale value of Land (sale on 20/03/2012) - 13 - 1,10,00,000 Less : Index cost of purchase Land purchase on 22/03/1984 for Rs. 44900 Index Cost is 44900 x 785/116 303849 Long Term Capital Gain 1,06,96,151 Less : Exemption U/s 54EC Bond purchase on 31/03/2012 U/s 54EC Bond purchase on 30/04/2012 50,00,000/- 50,00,000/- 1,00,00,000/- Less : Exemption u/s 54F purchase of resident house 696151 (Maximum upto capital gain) 06/04/2011 Ch No. 116781 1500000 Land 25/03/2013 Ch No. 756125 325000 Land 25/03/2013 Withdrawal from Bankd 100000 Stamp Duty 03/01/2012 Withdrawal 1150000 Construction 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 ....
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....residential house as evident from the order of AO, which is reproduced as under: "The assessee has not filed any completion certificate of the said residential house which he was claimed was constructed within 3 years from the date of transfer. The assessee has submitted photographs of the completed bunglow and the property tax receipts paid to Municipal Authorities, Nadiad." From the above, there remains no ambiguity that construction was completed within the specified period of 3 years. However, the AO alleged that the assessee had not deposited any amount to the capital gain account scheme before the due date of filing of Income Tax Return. In this regard, we note that the assessee at the most can deposit the entire sale construction of Rs. 1,10,00,000/- to the Income Tax Capital gain account scheme. But the assessee in the instant case has already invested Rs. 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 Rs. 15,00,000/ during the specified time. Thus, it is clear that the assessee has already made the requisite investment exceeding Rs. 1,10,00,000/-. Ther....