2015 (2) TMI 69 - HC - Income Tax

Benefit of Section 54E - date of investment - whether the deduction under Section 54E is available when the investment in the specified asset is made within a period of 6 months from the date of transferor from the date of receipts of sale consideration ? - Held that - , the contention of learned advocate for the appellant-assessee is misconceived inasmuch as the six months period will have to be counted when sale-deed was executed i.e. from 07.08.1982. Therefore, we are of the opinion that the contention of learned advocate for the appellantassesee is not acceptable. The Tribunal has not committed any error in dismissing the appeal of the assessee. Hence, the present appeal is dismissed. The questions of law raised in this appeal is answered in favour of the revenue and against the assessee. Accordingly, we hold that the Tribunal was right in law in holding that benefit of Section 54E is available where the assessee has invested or deposited the whole or any part of net consideration in any specified asset within six months from the date of consideration received and not from the date of such transfer. - Decided against revenue.

Summary

Issues:
Challenge to ITAT order regarding deduction under Section 54E.

Analysis:
The appellant-assessee challenged the ITAT order dated 03.07.2003, which dismissed the appeal regarding deduction under Section 54E of the Income Tax Act. The case involved the sale of two plots of land on 07.08.1982 for a total amount. The original assessment was set aside, and a fresh assessment was completed by the Assessing Officer. The assessee claimed deduction under Section 54E based on an investment made within six months of receiving the final installment. However, the claim was rejected by the Assessing Officer, CIT(A), and the Tribunal.

Substantial Questions of Law:
The Court formulated two substantial questions of law. Firstly, whether the benefit of Section 54E is available when the investment is made within six months of receiving the consideration, not from the date of transfer. Secondly, whether the deduction under Section 54E is applicable when the investment is made within six months from the date of transfer or receipt of the sale consideration.

Appellant's Contention:
The appellant's advocate argued that the six-month period should be counted from the date of receipt of consideration, which was 21st September 1985. The advocate contended that all authorities had erred in their decisions.

Respondent's Argument:
The revenue's advocate supported the Tribunal's decision and highlighted the concurrent findings of the authorities. The advocate urged the Court to dismiss the appeal based on the reasoning adopted by the Tribunal.

Court's Decision:
The Court found the appellant's contention misconceived, stating that the six-month period should be counted from the date of the sale deed execution on 07.08.1982. Referring to the Tribunal's observations, the Court agreed that the investment made by the assessee was after the stipulated six-month period from the date of transfer. The Court upheld the Tribunal's decision, stating that the benefit of Section 54E is available when the investment is made within six months from the date of consideration received. Consequently, the appeal was dismissed, and the questions of law were answered in favor of the revenue and against the assessee.