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TMI Blog2015 (4) TMI 758X X X X Extracts X X X X X X X X Extracts X X X X ..... the explanatory memorandum to Finance (No.2) Bill, 2014 that the legislature has accepted the ambiguity in the language of the proviso, but has amended the law with prospective effect i.e., from A.Y. 2015-16. It is therefore clear that for AY prior to AY 2015-16, on interpretation of the provisions it is possible for an Assessee claim deduction of ₹ 1 Crore by investing ₹ 50 lacs in each of the financial years, but within 6 months from the date of transfer. In the given circumstances, it cannot be said that the view entertained by the AO was not a possible view. In the circumstances, the jurisdiction u/s.263 of the Act could not have been exercised by the CIT. - Decided in favour of assessee. - ITA No.578/Bang/2014 - - - Dated:- 5-3-2015 - Shri N.V. Vasudevan And shri jason p. Boaz JJ. For the Appellant : Shri K. Kotresh, C.A. For the Respondent : Shri Farahat Hussain Qureshi, CIT-II(DR) ORDER Per N.V. Vasudevan, Judicial Member This appeal by the assessee is against the order dated 18.3.2014 of the Commissioner of Income Tax-IV, Bangalore passed u/s. 263 of the Act relating to assessment year 2009-10. 2. The facts and circumstances un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the first day of April 2007 . According to the CIT the phrase during any financial year means during any financial year after the first day of April 2007. Therefore according to CIT the intention of law was to identify any one of the financial years following 1.4.2007, and did not intend to include therein more than one financial year simultaneously. The CIT referred to the decision of the ITAT Jaipur Bench in ACIT v. Sri Rajkumar Jain Sons HUF [2012] 19 taxmann.com 27 (Jaipur Trib). The Tribunal in the aforesaid decision took the view that the maximum allowable deduction u/s. 54EC of the Act is only a sum of ₹ 50 lakhs. The CIT accordingly directed the AO to disallow the claim for deduction u/s. 54EC to the extent of ₹ 50 lakhs. 5. Aggrieved by the order of CIT(A), the assessee has preferred the present appeal before the Tribunal. 6. We have heard the submissions of the ld. counsel for the assessee, who brought to our notice the decision of the Bangalore Bench of the Tribunal in the case of Shri Vivek Jairazbhoy v. DCIT, ITA No.236/Bang/2012 dated 14.12.2012 wherein on identical facts, this Tribunal held that the benefit of section 54EC in a case such as the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the second investment of ₹ 50 lakhs is said to have been made outside the period of six months and no exemption is to be allowed under section 54EC of the Act in respect of the same. 9.5 The learned counsel for the assessee has placed reliance on the decision of the ITAT, Ahmedabad Bench in the case of Aspi Ginwala Others Vs. ACIT in ITA Nos.3226 3227/Ahd/2011 dt.30.3.2012 wherein on similar facts i.e investment of ₹ 50 lakhs each was made in two different financial years but within the period of six months from the date of sale, it was held in para 8 of the said order that the assessee is entitled to exemption of ₹ 1 Crore as the six months period for investment in eligible investments involved in two financial years. 9.6 The learned Departmental Representative however placed before us an earlier judgment, contrary to the decision of the Ahmedabad Bench of the ITAT, rendered by the ITAT, Jaipur Bench in the case of ACIT Vs. Raj Kumar Jain Sons in ITA No.648/JP/2011 dt.30.1.2012 wherein the Tribunal on similar facts, was of the view that a liberal interpretation will lead to discrimination adversely affecting those who sell a property at any time fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt Tyres Ltd Vs. First ITO reported in 247 ITR 821 have already laid down the law on interpreting of statutes by holding thereof that :- It is settled principle in law that the courts while construing Revenue Acts have to give a fair and reasonable construction to the language of a statute without leaning to one side or the other, meaning thereby that no tax or levy can be imposed on a subject by an Act of Parliament without the words of the statute clearly showing an intention to lay the burden on the subject. In this process, the courts must adhere to the words of the statute and the so called equitable construction of those words of the statute is not permissible. The task of the court is to construe the provisions of the taxing enactments according to the ordinary and natural meaning of the language used and then to apply that meaning to the facts of the case and in that process if the tax payer is brought within the net he is caught, otherwise he has to go free. In the case of CWT Vs. Hashmatunnisa Begum reported in 176 ITR 98 (SC), the Hon'ble Apex Court held that while interpreting statutes, literal construction has to be applied regardless of results and that o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pecified asset, the proportionate capital gains so invested in the long term specified asset, out of the whole of the capital gain, shall not be charged to tax. The proviso to the said sub-section provides that the investment made in the long-term specified asset during any financial year shall not exceed fifty lakh rupees. However, the wordings of the proviso have created an ambiguity. As a result the capital gains arising during the year after the month of September were invested in the specified asset in such a manner so as to split the investment in two years i.e., one within the year and second in the next year but before the expiry of six months. This resulted in the claim for relief of one crore rupees as against the intended limit for relief of fifty lakh rupees. Accordingly, it is proposed to insert a proviso in sub-section (1) so as to provide that the investment made by an assessee in the long-term specified asset, out of capital gains arising from transfer of one or more original asset, during the financial year in which the original asset or assets are transferred and in the subsequent financial year does not exceed fifty lakh rupees. This amendment will take ..... X X X X Extracts X X X X X X X X Extracts X X X X
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