Income Tax Appellate Tribunal - Mumbai
Anchala Shashipal Khanna, Mumbai vs Assessee on 31 October, 2013
आयकर अपीलीय अिधकरण,
अिधकरण "," खंडपीठ मुंबई
INCOME TAX APPELLATE TRIBUNAL,MUMBAI - 'A' BENCH.
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ि लेखा सदःय
Before S/Sh. B.R. Mittal, Judicial Member & Rajendra, Accountant Member
आयकर अपील सं/.ITA No.8566/Mum/2011,िनधा[
िनधा[रण वष[/Assessment Year-2008-09
Anchala Shashipal Khanna ACIT 20(1),
704, Swastik, Azad Cross Road, Off Mumbai.
Veera Desai Road, Andheri (East) Vs
Mumbai-400053
PAN: AUSPK6795N
(अपीलाथȸ/ Appellant) (ू×यथȸ / Respondent)
िनधा[ǐरती ओर से / Appellant by : Shri N.H.Gajaria
राजःव कȧ ओर से/Revenue by : Shri Javed Akhtar
सुनवाई कȧ तारȣख/ Date of Hearing : 31-10-2013
घोषणा कȧ तारȣख / Date of Pronouncement : 06-11-2013
आयकर अिधिनयम,
अिधिनयम 1961 कȧ धारा ( 1 ) 254 के अ Ûतग[ त आ दे श
Order u/s.254(1)of the Income-tax Act,1961(Act)
PER RAJENDRA, AM:
Challenging the order dated 25.10.2011 of CIT(A)-31,Mumbai,Assessee has filed following grounds of appeal:
1. The learned Commissioner of Income Tax(Appeals) has erred in confirming the disallowance of claim of Rs. 50,00,000/- being investment made in Capital Gain Exemption Bonds u/s 54EC of the Income Tax Act, 1961.
2. The learned Commissioner of Income Tax(Appeals) has erred in taking the date of sale transaction as 05.05.2007 instead of the date of sale as 08.05.2007 and drawing conclusion that the investment made in Bonds is out of the period of six months.
3. Your appellant request leave to add, alter or modify the grounds of appeal, if so required.
Effective ground of appeal is about disallowance of claim of Rs. 50 lacs invested in bonds against the Long Term Capital Gain (LTCG) as provided u/s 54EC of the Act for delay in making the said investment.
2.Assessee, an individual, filed her return of income on 29.01.2009 declaring total income of Rs. 38.54 lacs.Assessment was finalised by the Assessing Officer (AO) on 30.11.2010 determining the total income of Rs. 88.54 lacs. During the assessment proceedings, AO found that assessee had shown LTCG of Rs. 1.12 Crores out of the same consideration of Rs. 1.13 Crores, that assessee had sold a flat located at Andheri,that the assessee had claimed exemption u/s 54EC of Rs. 50 lacs from the capital gain on investment in bonds issued by the National Highway Authority of India (NHAI), that the bonds of NHAI were allotted to the assessee on 30.11.2007. AO held that as per the provisions of section 54EC assessee had to invest amount of LTCG at any time within a period of 6 months after the date of transfer of property,that property was transferr - ed by her on 05.05.2007, that investment made by her in NHAI bond was not made within the 2 ITA No. 8566/Mum/2001 Anchala Shashipal Khanna .
stipulated time period.Finally, he denied the benefits of section 54EC of the Act AO made an addition of Rs. 50 lacs to the income of the assessee.
3.Assessee preferred an appeal before the FAA. After considering the submissions of the assessee and the assessment order, FAA held that assessee had sold her flat on 05.05.2007 for a consideration of Rs. 1.31 Crores, she had made investment at Rs. 50 lacs in tax saving bonds of NHAI on 08.11.2007, that assessee had claimed, during the assessment proceedings that cheque for purpose of purchasing of bonds were issued on 06.11.2007, that assessee did not furnish any documentary evidence of about issuing of cheque on 04.11.2007, that it was cleared by NHAI on 10.11.2007, that investment made in the purchase of tax saving bonds within the meaning of provisions of section 54EC of the Act was after the period of 6 months of the transfer of the property/flat, that AO was fully justified in holding that assessee had failed to satisfy the basic conditions envisaged by section 54EC of the Act. Finally, he dismissed the appeal of the assessee holding that assessee had made investment in bonds after the stipulated period.
4.Before us, Authorised Representative(AR) submitted that there was delay of only one day,that cheque was issued on 04.11.2007,that section 54EC of the Act was part of benevolent legislation, that investment in NHAI was never doubted by the AO/FAA, that for the purpose of section 54EC of the Act period of 6 months had to be reckoned from the end of the month in which transfer took place.He referred to the order of the 'G' Bench of Mumbai Tribunal delivered on 25.11. 2001 in the case of Yahya E.Dhariwala (17 taxmann.com 159).He also relied upon the judgments of Hon'ble High Courts of Punjab & Hariyana and Rajasthan Gujarat in the case of Harnand Rai Ramanand 24 Taxman 571 and S.L.M.Maniklal Industries Ltd.Departmental Representative (DR) relied upon the judgment of Hon'ble High Court of Allahabad in the case of Laxmi Rattan Cotton Mills Co. Ltd.(97ITR 285).
6.We have heard the rival submissions and perused the material before us, the basic issue to be decided in the case under consideration is the words used in section 54EC of the Act i.e. 'within a period of 6 months after the date of transfer of property'.AO and FAA were of the opinion that six months would end on 180th day of the transaction.As per the assessee words used in the above referred section talks of a period of six months. We find that while deciding the matter of Laxmi Rattan Cotton Mills Co. Ltd. (supra) Hon'ble Allahabad High Court had held as under:
"The word "month" occurring in section 271(1)(a) must be taken to mean a period of thirty days. Section 271(1)(a) was enacted for the purpose of imposing a penalty on an assessee who has not filed his returns within the prescribed time and its object was to serve as a deterrent for such lapses. Penalty is imposable for every month during which the default continues. If the meaning ascribed to this word in the General Clauses Act, i.e., if the English calendar month is adopted, it may in some cases lead to a defaulting assessee escaping penalty altogether. For example, if the time given to an assessee to file his returns is up to the 31st of January of a particular year and he files it on the 27th of February, he would not be liable to pay any penalty. Such a result is not contemplated by the sub-section. The sub-section in clear and unambiguous terms makes every assessee liable for penalty during the period of default. In the circumstances, "month" should be taken to mean a period of thirty days and not an English calendar month."
We further find that in the cases of S.L.M. Maniklal Industries Ltd. (supra) and Harnand Rai Ramanand Hon'ble High Courts of Gujarat and Rajasthan has taken a contrary view.Hon'ble High Court of Gujarat has not discussed the judgment of Hon'ble Allahabad High Court but Hon'ble High Court of Rajasthan has clearly disagreed the judgment of Hon'ble High Court of Allahabad.Hon'ble Rajasthan High Court had discussed the issue as under:
"It is admitted position that neither in the 1957 Act nor in the Income-tax Act, 1961 the word 'month' has been defined. Hence, according to section 4 of the General Clauses Act, 1897, the definition given to the word 'month' in section 3(35) of the said Act will be applicable for interpreting the word 'month' used in various sections of the 1957 Act, unless there is anything 3 ITA No. 8566/Mum/2001 Anchala Shashipal Khanna .
repugnant in the subject or context. According to section 3(35) the 'month' does not necessarily mean 30 days and it is according to Gregorian calendar year unless the context otherwise requires. Hence, the word 'month' used in section 18(1)(i) should be the English calendar month. In this view of the matter, the return, which was received by the WTO on 15.09.1973, in the instant case, was within month and not after a completed month and there was, therefore, no delay of one month in filing the return and no penalty could be imposed under section 18(1)(a)."
We find that in the case of Yahya E.Dhariwala (supra), "G" bench of Mumbai Tribunal has also taken a similar view.In that case shares were transferred on 28.02.2005 and assessee invested the sale proceeds in specified bonds on 30.08.2005 and had claimed deduction u/s 54EC of the Act. As per the AO investment in the bonds was beyond the period of six months from the date of sale and hence assessee was not entitled to claim deduction u/s 54Ec of the Act. FAA confirmed the order of the AO.While deciding the appeal,Tribunal also discussed the words 'a period of six months'.Following the decisions of Brijlal Lohia & Mahabir Prasad Khemka (124 ITR 485) and Kadri Mills Coimbatore Ltd. (106 ITR 846),Tribunal held that period of six months should be considered from the end of the month in which the transfer would take place.Provisions of General clauses Act were also discussed by the Tribunal.
After considering the judgment of Hon'ble High Court of Rajasthan(supra),we are of the opinion that same should be followed to decide the issue.We find that Hon'ble High Court of Rajasthan has taken a dissenting view after considering the judgment delivered by the Hon'ble Allahabad High Court in the case of Laxmi Rattan Cotton Mills Co. Ltd. (supra) .Therefore, following the judgments of Hon'ble High Court of Rajasthan and Gujarat,we hold that for deciding the period of six months,word month should be taken as the English calendar month from the date of sale.In this case investment was made before 31st August,therefore in our opinion assessee was entitled to claim deduction u/s 54EC of the Act.Reversing the order of the FAA,effective ground of appeal filed by the assessee is decided in her favour.
As a result,appeal filed by the assessee stands allowed.
पǐरणामतः िनधा[ǐरती Ʈारा दाǔखल कȧ गई अपील मंजरू कȧ जाती हɇ .
Order pronounced in the open court on 06th November,2013.
आदे श कȧ घोषणा खुले Ûयायालय मɅ Ǒदनांक 6 uoEcj, 2013 को कȧ गई ।
Sd/- Sd/-
बी.आर
बी आर.् िमƣल.B.R.Mittal)
(बी िमƣल राजेÛि/Rajendra)
(राजे ि
Ûयाियक सदःय /JUDICIAL MEMBER लेखा सदःय /ACCOUNTANT MEMBER
मुंबई/Mumbai,Ǒदनांक/Date: 06th November,2013
SK
आदे श कȧ ूितिलǒप अमेǒषत
षत/Copy of the Order forwarded to :
1. Assessee /अपीलाथȸ 2. Respondent /ू×यथȸ
3. The concerned CIT (A) /संबƨ अपीलीय आयकर आयुƠ, 4. The concerned CIT /संबƨ आयकर आयुƠ
5. DR "A" Bench, ITAT, Mumbai /ǒवभागीय ूितिनिध , खंडपीठ,आ.अ.Ûयाया.मुब ं ई 4 ITA No. 8566/Mum/2001 Anchala Shashipal Khanna .
6. Guard File/गाड[ फाईल स×याǒपत ूित //True Copy// आदे शानुसार/ BY ORDER, उप/सहायक पंजीकार Dy./Asst. Registrar आयकर अपीलीय अिधकरण, मुंबई /ITAT, Mumbai