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TMI Blog2015 (9) TMI 393X X X X Extracts X X X X X X X X Extracts X X X X ..... n property and without their cooperation there could not have been any sale. In this situation, we do not find any error in concurrent findings reached by the CIT as also by the ITAT. - Decided against revenue Deduction claimed under Section 54EC for investment in purchase of REC Bonds allowed by ITAT - Held that:- Section 54EC gives assessee an option to invest either in bonds of National Highway Authority of India or then in bonds of Rural Electrification Corporation Limited. The said provision does not stipulate that the investment has to be in any bond whichever is available. Both bonds carry different benefits and hence deliberately the Parliament has given option to the assessee to invest in any one out of two as per his choice. In a given case, the assessee may choose to invest in both. However, discretion is conferred upon the assessee, who is the best judge of his own needs and interests. He cannot be forced to invest in the bond whichever is available because period of six months is about to expire. This option or discretion given by the Parliament to the assessee needs to be honoured here. If said option was available when period of six months was to expire and could ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de value of undivided share of land on which bungalow was built. As per Clause No. 7 of said Will of Kamlabai Moghe, assessee did not receive property absolutely. Kamlabai Moghe had provided a share for her daughters i.e. sisters of assessee if assessee or his brother does not have a son alive at the relevant time. This clause is not in dispute. In that event she gave life interest to her two daughter-in-laws and it was thereafter to go to her daughters. Assessee had only one daughter while his brother P.M. Moghe had one son and three daughters. The said son of P.M. Moghe expired in the year 1985 i.e. before death of Kamlabai Moghe. The assessee, therefore, received property with clause providing overriding title in favour of his three sisters. In this situation, assessee decided to pay ₹ 15 lakh each to his three sisters so that in future they should not claim any right in the property. He also paid an amount of Rs. Five lakh each to his three niece i.e. daughters of late brother P.M. Moghe. Those three nieces are Mrs. Deo, Ms. Moghe and Mrs. Jathar. Thus, he paid an amount of ₹ 45 lakh + 15 lakh, total amount of ₹ 60 lakh and a family settlement was accordingly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the issue has been correctly appreciated by CIT(A) and ITAT has upheld it. The arrangement worked out by three sisters and brothers as also three daughters of the deceased Shri P.M. Moghe, is bonafide one and revenue, therefore, cannot question it. The order of ITAT does not give rise to any substantial question of law in this connection and hence the appeal to that extent is liable to be dismissed. 6. Insofar as investment under Section 54EC of the Act is concerned, Shri Bhattad, learned counsel, points out that vide Cheque issued on 24.01.2007 REC Bonds were purchased on 27.01.2007. The assessee had received sale consideration on 07.07.2006 and period of six months available for such investment, therefore, expired on 06.01.2007. From that date onwards till 24.01.2007, REC Bonds were not available, as such purchase vide cheque dated 24.01.2007 is in accordance with law. He has invited our attention to the provisions of Section 54EC of the Act to urge that the said provision even contemplates this situation and enables extension of time for purchase of such bonds. He has placed reliance upon a Division Bench judgment of this Court in Income Tax Appeal No. 3731 of 2010 deci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s three daughters were faced in a peculiar position. They resolved the situation and a family settlement was reduced into writing. It was agreed that at the time of sale, each sister shall be given ₹ 15 lakh and each niece shall be given Rs. Five lakh. Accordingly, when the property was sold on 07.07.2006, this family settlement has been given effect to. It is, therefore, obvious that in the absence of such family settlement and payment, the sale of property on 07.07.2006 by the assessee could not have materialized. The CIT(A) in the Appeal filed by the assessee has not accepted payment of Rs. Five lakh each given to three nieces and that finding has been maintained even by the ITAT. The assessee has not questioned it in further appeal. As such, the only question is whether amount of ₹ 45 lakh paid to his sisters has been rightly accepted as expenditure in connection with transfer of property. The sisters had a title in property and without their cooperation there could not have been any sale. In this situation, we do not find any error in concurrent findings reached by the CIT as also by the ITAT. In the light of arguments advanced before us, we find that Question No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed this order. The ITAT on 19.06.2010 allowed the assessee's appeal. This order of ITAT was questioned before the High Court. In paragraph 17, this Court has observed Thus, the availability of the bonds only for a limited period during this period cannot prejudice the assessee's right to exercise the same up to last date. The bonds were admittedly not available during the said period. More reasons are given in paragraph 21 by the Division Bench. 12. Shri Parchure, learned counsel, has however argued that the Bonds issued by the National Highway Authority of India were available and hence the assessee ought to have invested in those bonds within the stipulated period of six months. We find this contention difficult to accept. Section 54EC gives assessee an option to invest either in bonds of National Highway Authority of India or then in bonds of Rural Electrification Corporation Limited. The said provision does not stipulate that the investment has to be in any bond whichever is available. Both bonds carry different benefits and hence deliberately the Parliament has given option to the assessee to invest in any one out of two as per his choice. In a given case, the as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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