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TMI Blog2012 (4) TMI 195X X X X Extracts X X X X X X X X Extracts X X X X ..... investment of ₹ 50 lacs is made by assessee on 26.05.2008. It is undisputed that subscription to the eligible investment was closed during the period 01-04-2008 to 26-05-2008 thus assessee was prevented by sufficient cause which was beyond his control in making investment in these Bonds within the time prescribed. Therefore, investments made by the assessee on 26-05-2008 even though beyond six months is eligible for exemption – Decided in favor of assessee. - IT Appeal Nos.3226 & 3227 (Ahd.) of 2011 - - - Dated:- 30-3-2012 - D.K. TYAGI, A. MOHAN ALANKAMONY, JJ. ORDER D.K. Tyagi, Judicial Member These two appeals have been by two different assessees against two separate orders 09-11-2011 and 11-11-2011 passed by the learned CIT(A)-V, Baroda for Assessment Year 2008-09. 2. Since issues involved in these two appeals are common, the appeals were heard together and are being disposed of by this consolidated order. The common grounds which are identical in both the appeals, read as under:- [1] The learned C.I.T. (Appeals) has erred in law and on facts in above case in confirming the order of learned A.O. of assessing the Long Term Capital Gain at Rs. 1,80,32, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1/12/2007 in REC Bonds and Rs. 50 Lacs on 26/5/2008 in NHAI Bonds and claimed exemption of Rs. 100 lacs u/s 54EC of the Act. The investment in REC Bonds was within time limit of 6 months prescribed in Section 54EC of the Act while investment in NHAI has been made only on 26/5/2008 (allotment date 31/5/2008) as the subscription of neither of the scheme opened during 1/4/2008 to 26/5/2008. The appellant had made very same day the subscription of first scheme got opened. 1.4 The return of income included the "Income from Capital Gain (Long Term)" of Rs. 1,30,32,450/- earned on sale of house property (after claiming exemption u/s 54 EC of Rs. 100 Lies for investment made in specified bonds). 1.5 The assessment has been completed u/s. 143 (3) of I.T. Act, 1961 by the Ld. A.O., vide order dated 15/12/2010. In the assessment order the Ld. A.O. has taxed Long Term Gain at Rs. 1,80,32,450/- instead of 1,30,32,450/- and has disallowed the exemption of x 50.00 Lacs for investment made in NHAI Bonds on 26/31-5-2008, on the plea that the exemption for such investment is not available as the investment has been made is beyond 6 months' time limit prescribed in Section 54EC of the Act. 2.1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y submit that this observation is totally out of context as the Ld. A.O. should have inquired whether the subscription to any of the scheme was opened between 1.4.2008 to 26.5.2008 as claimed by the appellant or not? On the contrary the appellant has furnished evidences (refer Annexure -1) that subscription to both scheme stopped on 31/3/2008 and reopened only on 26/28th May 2008 and the same is not contradicted by the Ld. A.O as the same is confirmed by REC in reply of the notice u/s 133(6) of the Act. The copy of the entire correspondence in response to notice u/s 133(6) of the Act is enclosed herewith for your honour's ready reference in Annexgre-2. The appellant further submits that every year the subscription stops on 31st March and it reopens in somewhere in May next year. This is was also case in next year and the subscription reopened only on 11/5/2009 (as observed by the Ld. A.O. in the assessment order). 2.6 The appellant further submits that since neither of the specified bonds were available for subscription from 1st April 2008 to 26th/28th May 2008, the investment made immediately on the reopening of the scheme, should be considered within the time limit prescribed, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s that the limitation of six months for making the investment under section 54EC of capital gains arising from the transfer of a long-term capital assets, is extended-" Since, the facts and circumstances of the appellant's matter are same, the benefit of benevolent circular/notification/press note, needs to be extended to all such cases where the assessee are prevented to make investment in the specified assets within specified period for non-availability of bonds for subscription during such period. 2.08 The appellant also submit that various judicial authorities have taken unanimous view that the 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. The citations' and the gist of the decisions are as under: Cello Plast v. DCIT 2010 TIOL 60 ITAT (Mum) In this case the Tribunal has held that it was an impossible task for the assessee to comply with the time period laid down u/s 54EC. The delay in purchase due to non-availability of the bonds was held to be a reasonable cause, and the assessee was held to be entitled to exe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s are not available in the market and therefore, FD for an initial period of 90 days which may be extended further or may be redeemed prior to expiry date for investing the same in bonds qualified u/s 54E f the act. Copy of the letter dated 30.10.2006 is placed at page 6 of the compilation. Copies of the FDs are placed at pages 7 8 of the compilation. Copies of the letters issued by Rural Electricity Corpn. Ltd along with the copy of bond certificate is placed at pages 9 of the compilation. In this allotment, it is clarified that the assessee applied for the purchase of the bonds on 27.1.2007 and they are allotted on 31.1.2007. 500 bonds for a consideration of Rs. 50 lacs were allotted. The bond certificates is also placed at page 10 of the compilation. 11.1 From these facts, it is clearly established that there was reasonable cause in not purchasing these specified bonds within the specified time allowed as they were not available in the market, as soon as the bonds were available in the market, the assessee immediately purchased the same. Therefore in our considered view, under these circumstances, the assessee is entitled for the exemption u/s 54EC. " Ram -Agarwal v. J ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r office is closed on that day or that day or the last day of the prescribed period, the act or proceeding shall be considered as done or taken in due time if it is done or taken on the next day afterwards on which the Court or office is open. Provided that nothing is this section shall apply to any act or proceeding to which the (Indian Limitation Act, 1877 (15 of 1877), applies. This section applies also to all (Central Acts) and Regulations made on or after the fourteenth day of January, 1887." This provision is applicable in the case of the appellant as he was prevented to make investment in the specified assets within specified period due to non-availability of bonds for subscription during such period. 2.10 In view of the above facts and circumstance and the direct decisions explaining the legal positions, the appellant most humbly submit that the investment made by him is within the specified time and hence the exemption is squarely available and have to request your honour to hold so now and quash the disallowance made. The appellant shall be grateful if the above submissions are considered favourably while disposing of the above appeal. For which act of grace, I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efit. Clearly, it cannot be the intention of the legislature to favour the assessees transferring asset after the 30th September because it will not only be discriminatory, it will be illogical also. The appellant, by depositing Rs. 50 lakh in the specified assets in the next financial year is trying to claim a deduction of Rs. 1 crore, a benefit which is not intended by the legislature. Since, she has not been able to invest in the specified assets within six months as provided in section 54 EC, she is not entitled to any relaxation in the time period of six months because she has already deposited Rs. 50 lakh in the specified assets in the year in which the capital asset has been transferred. The case laws quoted by the appellant are of no help because facts in those cases were entirely different. In those cases the appellants were prevented from taking benefit of express provisions of the Act and there was no case of taking additional and unintended benefit. It has been held by the honourable High Court of Kerala in the case of 252 ITR 513 (Ker) C Dhanapalan that A concession cannot be claimed as a matter of right. Any scheme extending concession has to be understood strictly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tress the language of the section so as to enable the taxpayer to escape the tax". In view of the above position of the law, I'm of the opinion that the appellant is not entitled to any relaxation in the time limit for making an additional investment of Rs. 50 lakh under section 54 EC of the income tax act 1961 because it is not only against the provisions of section 54 EC it is also against the spirit of provision inserted below sub section (1) of section 54 EC reproduced above. Order of the AO denying additional exemption of Rs. 50 lakh to the appellant is therefore confirmed." 5 . Aggrieved by this order of the learned CIT(A), the assessee is in appeal before us. At the time of hearing, the learned counsel of the assessee reiterated the submissions made before the learned CIT(A). 6. The learned DR, on the other hand, supported the orders of the AO and the learned CIT(A). 7. We have heard both the parties and perused the records and find that the assessee and his brother Shri Rustom Ginwala sold a property on 22-10-2007 for Rs. 6.21 Crores. The assessee and his brother had 50% share in this property. The assessee made investment of Rs. 50 lakhs on 31-12-2008 in REC B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... specified asset by an assessee during any financial year does not exceed fifty lakh rupee]" It is clear from this proviso that where assessee transfers his capital asset after 30th September of the financial year he gets an opportunity to make an investment of Rs. 50 lakhs each in two different financial years and is able to claim exemption upto Rs. 1 Crore u/s 54EC of the Act. Since the language of the proviso is clear and unambiguous, we have no hesitation in holding that the assessee is entitled to get exemption upto Rs. 1 Crore in this case. This view of ours gets support from the following finding of the Hon'ble Supreme Court in the case of IPCA LAB 266 ITR 521 (SC), wherein it has been held by the Hon'ble Supreme Court that - "even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of the section. If the wording of the section is clear, then benefits which are not available cannot be conferred by ignoring or misinterpreting words in the section" Here the situation is reverse. Since the wording of the proviso to section 54EC is clear, the benefits which are available to the assessee cannot be denied. In vi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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