ASHOK M CHAWLA MUMBAI vs ACIT CEN CIR5 32 MUMBAI

आयकर अपील य अ धकरण आयकर अपील य अ धकरण “ए” यायपीठ यायपीठ यायपीठ यायपीठ मंबई मंबई मंबई मंबई ु मममम। । । । IN THE INCOME TAX APPELLATE TRIBUNAL “ A ” BENCH, MUMBAI ी दनेश कमार ु अ वाल, या"यक सद$य एवं एवं एवं एवं ी डी. क'णाकर राव, लेखा सद$य के सम) । BEFORE SHRI DINESH KUMAR AGARWAL, JM AND SHRI D.

KARUNAKARA RAO, AM आयकर अपील सं./I.T.A.

No.

9074/Mum/2010 ("नधा+रण वष+ "नधा+रण वष+ / / / / Assessment Year : 2007-08) Mr.

Ashok M.

Chawla, 203 Shanti Sadan, Lokhandwala Complex, Andheri (W), Mumbai – 400 053. बनाम बनाम बनाम बनाम/ Vs.

Asstt.

Commissioner of Income Tax- Central Circle -32, Aayakar Bhavan, Ground floor, M.K.

Road, Mumbai – 400 020. $थायी लेखा सं./PAN : ADCPC5506C (अपीलाथ. /Appellant) .. (/0यथ. / Respondent) अपीलाथ. क1 ओर से / Appellant by : Shri Rahul K.

Hakani /0यथ. क1 ओर से/ Respondent by : Shri Manoj Kumar सनवाई क1 तार ख ु /Date of Hearing : 30-01-2013 घोषणा क1 तार ख /Date of Pronouncement : 06-02-2013 आदेश / O R D E R PER DINESH KUMAR AGARWAL, JM. : This appeal preferred by the assessee is directed against the order dtd.

1-11-2010 passed by the ld.

CIT(A)- 41, Mumbai for the assessment year 2007-08.

2.

Briefly stated facts of the case are that the assessee an individual.

He has shown income from salary, business income, long term capital gain and ITA No.9074/Mum/2010 2 income from other sources.

During the course of assessment proceeding, the A.O. observed that the assessee has shown long term capital gain from sale of property (Ravikiran) situated at Oshiwara, Andheri (West) which was purchased on 5-1-99 from Ravikiran Estate Pvt.

Ltd.

The said property was sold on 21-5-2006 as per sale deed agreement, and was registered on 22-5-2006.

The sale was made for Rs.

21 lacs, the brokerage was paid Rs.

21,000/-, the sale value of the property was shown at Rs.

20,79,000/- on which the A.O. has worked out capital gain Rs.

13,77,010/-.

The A.O. further observed that the assessee has invested Rs. vested Rs.

14 lacs in “Rural Electrification Corporation Ltd.”, a Government of India Enterprise on 28-2-2007 for exemption of capital gain u/s 54EC of the Income tax Act, 1961 (the Act).

According to the A.O. since the capital gain was invested after six months from the date of sale of capital asset, the claim of exemption u/s 54EC of the Act is not as per law and, hence, he rejected and taxed the capital gain Rs.

13,77,010/- as long term capital gain.

Accordingly the A.O. completed the assessment at an income of Rs.

23,40,960/- vide assessment order dtd.

30-11-2009 passed u/s 143(3) of the Act.

On appeal, the ld.

CIT(A) while agreeing with the views of the A.O., confirmed the disallowance made by the A.O.

3.

Being aggrieved by the order of the ld.

CIT(A), the assessee is in appeal before us challenging in all the grounds the sustenance of disallowance of claim u/s 54EC of the Act.

ITA No.9074/Mum/2010 3 4.

At the time of hearing the ld.

Counsel for the assessee while referring to the facts of the case with relevant dates submit that the issue is fully covered by the decision of the Hon’ble Bombay High Court in the case of CIT vs.

Cello Plast (2012) 209 Taxman 617 (Bom).

He, therefore, submits that following the same, the deduction u/s 54EC of the Act be granted to the assessee.

He also placed on record the copy of the said judgment.

5.

On the other hand, the ld.

D.R. while relying on the order of the A.O. and the ld.

CIT(A) also relied on the order of the Tribunal in the case of Smt.

Anuradha Venkatesan vs.

ITO (2013) 29 taxmann.com 68 (Chennai).

He, therefore, submits that the order passed by the ld.

CIT(A) in sustaining the disallowance of deduction be upheld.

6.

We have carefully considered the submissions of the rival parties and perused the material available on record.

We find that for deciding this issue, it is useful to set out the relevant facts chronologically: FACTS: 21-5-2006 Date of Sale of property.

Long Term Capital Gain of Rs.

13,77,010/-. ,77,010/-.

21-5-2006 to 1-7-2006 REC bonds were not available during this period. (As per decision of Bombay High Court (supra) (para 10) 30-6-2006 CBDT Circular extending time to invest in S.

54EC Bonds upto 3 1/12/2006.

1-7-2006 to 3-8-2006 REC bonds became available. (As per decision of Bombay High Court (supra) (para 10) 4-8-2006 to 22-1-2007 REC bonds were not available (As per decision of Bombay High Court (supra) (para 10) 17-10-2007 As REC bonds were not available assessee deposited Rs.

14,00,000/- with Capital Gains Scheme.

ITA No.9074/Mum/2010 4 21-11-2006 Six months period from date of sale of property expired.

31-12-2006 Period Extended by CBDT expires.

22-1-2007 REC Bonds became available. (As per decision of Bombay High Court (supra) (para 10) 2-2-2007 Assessee immediately applied for Bonds by making payment out of Deposit in Capital Gains Scheme.

28-2-2007 Allotment of Bonds to Assessee.

We further find that in the case of Cello Plast (supra) the relevant facts were set out as under (para 10):- 22-3-2006 The respondents sold their factory building.

22-3-2006 to 1-7-2006 During this period, REC bonds were not available.

30-6-2006 CBDT Circular extending the time to invest in the section 54EC bonds upto 31-12-2006.

1-7-2006 to 3- 8-2006 REC bonds became available during this period as stated in a letter dated 10-4-2008 from REC Ltd. filed with the Assessing Officer by the respondents.

04-08-2006 to 22-1-2007 REC Bonds were not available during this period.

21-9-2006 Six months from the date of sale of the property by the respondents.

In normal course, therefore, the last date for the respondents to invest in bonds to avail of the benefit under section 54EC.

30-10-2006 As the REC bonds were still not available, the respondents invested Rs.

50,00,000/- in fixed deposits issue by the State Bank of India.

The respondents by a letter dated 30- 10-2006 instructed the State Bank of India to invest Rs. invest Rs.

50,00,000/- in FDs stating that the same will be withdrawn and invested in bonds when available.

31-12-2006 Last date for investing in bonds to avail of the benefit under section 54EC as per the CBDT circular dated 30-6-2006.

22-1-2007 to 31-1-2007 REC bonds once again available (as stated in a letter dated 10-4-08 from REC Ltd. to the respondent).

31-1-2007 Respondents purchased REC bonds.

On the above facts, their Lordships while allowing the claim of the assessee have held vide para 22 of the judgment as under:- “22.

In the present case, the bonds were not available from 4/8/2006 to 22/1/2007.

The last date for investment in the normal course would have been 21/9/2006 which was extended upto 31/12/2006.

The respondents ought to ITA No.9074/Mum/2010 5 be entitled to an extension of the number of days between 4/8/2006 to 21/9/2006 at the very least and, in any event, to a reasonable extension.

The respondents admittedly invested in the bonds on 31/1/2007 i.e. within nine days of their being available once again from 22/1/2007.

Considering that the bonds were not available for such a long period, an extension of merely nine days is extremely reasonable in the present facts”.

Since the facts of the present case are almost similar to the facts of Celloplast (supra), which is binding on us, therefore, the decision relied on by the ld.

D.R. is not applicable to the present case.

This being so and keeping in view the assessee has made investment in REC bonds within reasonable extension of time, the disallowance made by the A.O. and sustained by the ld.

CIT(A) is deleted.

The grounds taken by the assessee are, therefore, allowed.

7.

In the result, assessee’s appeal stands allowed. प6रणामतः "नधा+6रती क1 अपील $वीकत ृ क1 जाती है । Order pronounced in the open court on 6-02-2013 . आदेश क1 घोषणा खले यायालय म दनांकः ु 6-02-2013 को क1 गई । Sd/- Sd/- (D. - Sd/- (D.

KARUNAKARA RAO) (DINESH KUMAR AGARWAL) लेखा सद$य / ACCOUNTANT MEMBER या"यक सद$य / JUDICIAL MEMBER मंबई ु Mumbai; दनांक Dated 6-02-2013 व."न.स./ r.k. , Sr.

PS ITA No.9074/Mum/2010 6 आदेश क1 /"तCलDप अ ेDषत देश क1 /"तCलDप अ ेDषत/Copy of the Order forwarded to : 1. अपीलाथ. / The Appellant 2. /0यथ. / The Respondent.

3. आयकर आयE ु (अपील) / The CIT(A)-41, Mumbai 4. आयकर आयE ु / CIT – Central -III Mumbai 5.

Dवभागीय /"त"न ध, आयकर अपील य अ धकरण, मंबई ु / DR, ITAT, Mumbai ‘A’ Bench 6. गाड+ फाईल / Guard file. स0याDपत /"त //True Copy// आदेशानसार आदेशानसार ु / BY ORDER, उप उप उप उप/सहायक पं सहायक पं सहायक पं सहायक पंजीकार जीकार जीकार जीकार (Dy./Asstt.

Registrar) आयकर अपील य अ धकरण आयकर अपील य अ धकरण, , , , मंबई ु / ITAT, Mumbai ITA No.9074/Mum/2010 7 Sr.

Details Date Initials Designation 1 Draft dictated on 30-1-13 Sr.PS/PS 2 Draft Placed before author 4-2-13 Sr.PS/PS 3 Draft proposed & placed before the Second Member JM/AM 4 Draft discussed/approved by Second Member JM/AM 5 Approved Draft comes to the Sr.PS/PS Sr.PS/PS 6 Kept for pronouncement on Sr.PS/PS 7 File sent to the Bench Clerk Sr.PS/PS 8 Date on which the file goes to the Head clerk 9 Date on which file goes to the AR 10 Date of Dispatch of order ITA No.9074/Mum/2010 8 In the result, the appeals of the assesses/revenue are allowed/dismissed/partly allowed/allowed for statistical purposes/partly allowed for statistical purposes. प6रणामतः "नधा+6रती / राज$व क1 अपील $वीकत ृ / खा6रज / आंCशक $वीकत ृ / सांKयक1य उLेMय के Cलए आंCशक $वीकत ृ क1 जाती है । Order pronounced in the open court on . आदेश क1 घोषणा खले यायालय म दनांकः को क1 गई । ु ( ) ( ) लेखा सद$य / ACCOUNTANT MEMBER या"यक सद$य / JUDICIAL MEMBER मंबुई Mumbai; दनांक Dated / /2012 व."न.स./ , Sr. .स./ , Sr.

PS आदेश क1 /"तCलDप अ ेDषत/Copy of the Order forwarded to : 1. अपीलाथ. / The Appellant 2. /0यथ. / The Respondent.

3. आयकर आयE ु (अपील) / The CIT(A)- 4. आयकर आयE ु / CIT 5.

Dवभागीय /"त"न ध, आयकर अपील य अ धकरण, मंबुई / DR, ITAT, Mumbai 6. गाड+ फाईल / Guard file. आदेशानसार आदेशानसार ु / BY ORDER, स0याDपत /"त //True Copy// उप उप उप उप/सहायक पंजीकार सहायक पंजीकार (Dy./Asstt.

Registrar) आयकर अपील य अ धकरण आयकर अपील य अ धकरण, , , , मंबुई / ITAT, Mumbai ITA No.9074/Mum/2010 9 ITA No.9074/Mum/2010 10 आयकर अपील य अ धकरण के सद$यN के नाम जी.ई. वीरभOPपा, अQय) /G.E.

Veerbhadrappa, President डी.मनमोहन, उपाQय) / D.

Manmohan, VP बी.आर.CमRल, या"यक सद$य / B.R.Mittal, JM आर.एस. $याल, लेखा सद$य / R.S.Syal, AM आय.पी. बंसल, या"यक सद$य / I.P.

Bansal, JM दनेश कमार ु अ वाल, या"यक सद$य / Dinesh Kumar Agarwal, JM पी.एम. जगताप, लेखा सद$य/ P.M.

Jagtap, AM राजेO Cसंह, लेखा सद$य/ Rajendra Singh, AM बी. रामकोटTय, लेखा सद$य/ B.

Ramakotaiah, AM Dवजय पाल राव, या"यक सद$य / Vijay Pal Rao, JM अCमत शUला ु , या"यक सद$य / Amit Shukla, JM Dववेक वमा+, या"यक सद$य / Vivek Varma, JM एन. के.

VबलैTया, लेखा सद$य / N.

K.

Billaiya, AM राजेO, लेखा सद$य /Rajendra, AM ITA No.9074/Mum/2010 11 SMC / एक-सद$य मामला MA / DवDवध आवेदन SA/ रोक आवेदन WTA/ धनकर अपील Int.

T A/ Wयाज कर अपील Gift Tax/ दान कर Estate duty / संपदा शXक ु Cross objection/ /0या)ेप Sur Tax / अ"त कर Expenditure Tax / Yयय कर IT (SS)/ आयकर अपील (तलाCशयां और अCभ हण) RA / "नदश आवेदन [ HC Direction / उ\च यायालय "नदेश TDS / ^ोत पर काटा गया कर ITA No.9074/Mum/2010 12 A/ए B/बी C/सी D/डी E/ई F/एफ G/जी H/एच I/आई J/जे K/के L/एल M/एम ITA No.9074/Mum/2010 13 आयकर अपील य अ धकरण के सद$यN के नाम जी.ई. वीरभOPपा, अQय) /G.E.

Manmohan, VP बी.आर.CमRल, या"यक सद$य / B.R.Mittal, JM आर.एस. $याल, लेखा सद$य / R.S.Syal, AM आय.पी. बंसल, या"यक सद$य / I.P. द$य / I.P.

Ramakotaiah, AM Dवजयपाल राव, या"यक सद$य / Vijay Pal Rao, JM अCमत शUला ु , या"यक सद$य / Amit Shukla, JM Dववेक वमा+, या"यक सद$य / Vivek Varma, JM एन. के.

Billaiya, AM राजेO, लेखा सद$य /Rajendra, AM जी.डी. अ वाल, उपाQय)/ Vice President यू.बी.एस. बेद , या"यक सद$य/ U.B.S.

Bedi, JM आर.पी. तोलानी, या"यक सद$य/ R.P.

Tolani, JM एस. वी. मेहरो`ा, लेखा सद$य/ S.V.

Mehrotra, AM ITA No.9074/Mum/2010 14 ीमती दवा Cसंह, या"यक सद$य/ Smt.

Diva Singh, JM आई.सी. सधीर ु , या"यक सद$य/ I.C.

Sudhir, ी ए.डी. जैन, या"यक सद$य/ ी सधाकर रे ु aडी, लेखा सद$य/ ी राजपाल यादव, या"यक सद$य ी के.जी. बंसल, लेखा सद$य ी के.डी. रंजन, लेखा सद$य ी शमीम याहया, लेखा सद$य ी ए.एन. पाहजा ु , लेखा सद$य ी बी.सी. मीना, लेखा सद$य ी सी.एम. गग+, या"यक सद$य/ ी ट .एस. कपरू, लेखा सद$य ी भावनेश सैनी, या"यक सद$य ी ए.एल. गहलोत, लेखा सद$य ी जी.सी. गbा ु , उपाQय) ी डी.के.

0यागी, या"यक सद$य ी मकल ावत ुु , या"यक सद$य ी ए.के. गरोcड़या, लेखा सद$य ी ए.एम. अलंकामोनी ITA No.9074/Mum/2010 15 ी कल भारत ु , या"यक सद$य ी अ"नल चत+ुवेद , लेखा सद$य ी तेज राम मीना, लेखा सद$य ी एच.एस.

Cसeू, या"यक सद$य ी बी.पी. जैन, लेखा सद$य ी एन. भारfाज शंकर, उपाQय) ी एन.के. सैनी, लेखा सद$य ी एन.वी. वासदेवन ु , या"यक सद$य ीमती पी. माधवी देवी, या"यक सद$य जाज+ जाज+ के, या"यक सद$य ी एच.एल. कावा+ ी ट .आर. सदू, लेखा सद$य सी सषमा चावला ु ु , या"यक सद$य ी मेहर Cसंह, लेखा सद$य डा. ओ.के. नारायणन ी एन.एस. सैनी, लेखा सद$य ी अgाहम पी. जाज+, लेखा सद$य ी वी. दगा+ राव ु , या"यक सद$य ी सी. नागO /साद, या"यक सद$य ITA No.9074/Mum/2010 16 ी Dवकास अव$थी, या"यक सद$य ी एन. आर.एस. गणेशन, या"यक सद$य ी बी.आर. भा$करन, लेखा सद$य ी के.के. गbा ु , लेखा सद$य ी के.एस.एस. /साद राव, या"यक सद$य ी डी.मनमेहन, उपाQय) (मंबई म "नयE ु ु ) ी चंO पजार ु , लेखा सद$य ीमती आशा Dवजय राघवन, या"यक सद$य ी डी. द$य ी डी. क'णाकर, लेखा सद$य ी शcEजीत दे, या"यक सद$य ी जोगींO Cसंह, या"यक सद$य ी आर.सी. शमा+, लेखा सद$य ी ह6र ओम मराठा, या"यक सद$य ी आर.के. गbा ु , या"यक सद$य ी संजय अरोड़ा ी ी जी.डी. अ वाल, उपाQय) (दXल म "नयE ु ) ी /मोद कमार ु ी एन.Dवजयकमार ु , या"यक सद$य ी महावीर Cसंह, या"यक सद$य ITA No.9074/Mum/2010 17 ी सी.डी.राव ी जाज+ मथान, या"यक सद$य ी डी. मोहमाहन उपाQय) (मंबई मे "नयE ु ु ) ी सनी ु ल कमार ु यादव, या"यक सद$य ी पी.के. बंसल ी डी.ट . गराCसया, या"यक सद$य ी शैलO कमार यादव ु , या"यक सद$य ी आर.एस. पडवेकर, या"यक सद$य ी जी.एस. पनू ी आर.के. पांडा ी ट .के, शमा+, या"यक सद$य ी डी.के- ीवा$तव