2018 (3) TMI 1743

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....Ld. CIT(A) erred in upholding the order of Ld. Assessing officer u/s 147/148 read with section 143 of the Income-tax Act , 1961 in the absence of escapement of income during assessment year 2008-09. 2. That there was no reason to believe with Assessing officer or any other cogent material on record that the income of the assessee had escaped assessment. 3. Based on the facts and circumstances of the case and in law the Ld. CIT(A) has erred in upholding the addition of Rs. 40,28,748/- in the impugned order for assessment year 2008-09 of the Ld. Assessing officer thereby confirming double taxation of income duly offered to tax by the appellant in assessment year 2010-11 4. Based on the facts and circumstances of the....

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.... in assessment year 2008-09, the Assessing officer was of the view that they should have been taxed in that year . Further that for claiming exempt ion us 54EC, the investment had to be made within 6 months of the date of transfer but was made in financial year 2009-10. The Assessing Officer , therefore, show caused the assessee in this respect . 3. The assessee explained that the total purchase consideration for shareholding as set out in Clause 3.1 of the Share Purchase Agreement (SPA) was settled at Rs. 206,678,314/-, out of which a sum of Rs. 18,000,000/- was deposited in an Escrow Account by the transferee. Hence on the date of transfer , shareholders received Rs. 188,678,314/- and remaining amount of Rs. 18,000,000/- was kept in an....

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....EC bonds was not made within 6 months from the date of transfer. 4. Being aggrieved by the above order of the Assessing officer , the assessee preferred appeal before the Ld. CIT(A) not only challenging the legality of the reopening of the assessment but also the additions made by the Assessing officer on merits. The Ld. CIT(A) , however , upheld the order of the Assessing officer . 5. Before us, the Ld. AR of the assessee has reiterated his submissions as were made before the lower authorities and further submitted that the lower authorities have wrongly observed that remaining part of the amount of Rs. 40,28,748/- had accrued to the assessee in AY 2008-09. He has further submitted that, in fact , the amount was lying in the Escrow a....

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....t, i t cannot be expected from the assessee of the investment of the said amount in the Rural Electrificat ion Corporation Ltd. Bonds to claim the benefit u/s 54EC of the Act . The amount was invested in the Rural Electrification Corporation Ltd. Bonds when the same was received and, therefore, the deduction u/s 54EC was rightly claimed by the assessee. The Ld. Counsel for the assessee has also relied on the following decisions:- i) CIT Vs. Hemel Raju Shete [ (2016) 136 DTR 417 (Bom)] ii) E.D. Sassoon & Co Ltd Vs. CIT [ (1954) 26 ITR 27 (SC) ] iii) R. Dalmia Vs. CIT [ (1982) 133 ITR 179 (Delhi) 5. The Ld. DR, on the other hand, has relied on the findings of the lower authorities. 6. We have considered the ri....

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....cannot be said that the said amount has accrued to the tax payer . The Hon'ble Delhi High Court in the case of 'R. Dalmia Vs. CIT' (supra) has held that the capital gains would accrue only to an assessee when they are ascertained. 7. We also find force in the contention of the Ld. Counsel for the assessee that the amount was invested in Rural Electrification Corporation Ltd. Bonds on receipt of the same and in the year of the taxability of the capital gains. We, therefore, hold that the assessee is entitled to the benefit of deduct ion u/s 54EC as the amount was invested by the assessee in the Rural Electrification Corporation Ltd. Bonds in the year of receipt which was also the year of taxability of the capital gains so recived. In ....