Income Tax Appellate Tribunal - Jaipur
Mahendra Rajnikant Zaveri, Jaipur vs Ito, Jaipur on 8 September, 2017
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IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR
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BEFORE: SHRI BHAGCHAND, AM & SHRI KUL BHARAT, JM
vk;dj vihy la-@ITA No. 1117/JP/2016
fu/kZkj.k o"kZ@Assessment Year : 2012-13
Mahendra Rajnikant Zaveri cuke ITO
2683, Suratwala Building, MSB Vs. Ward-2-1
Rasta Johari Bazar, Jaipur Jaipur
PAN No.: AAAPZ3682R
vihykFkhZ@Appellant izR;FkhZ@Respondent
fu/kZkfjrh dh vksj ls@ Assessee by : Shri S.R.Sharma
& Shri R.K. Bhatra (CA)
jktLo dh vksj ls@ Revenue by : Shri R.A.Verma (Addl.CIT)
lquokbZ dh rkjh[k@ Date of Hearing : 05/09/2017
mn?kks"k.kk dh rkjh[k@ Date of Pronouncement : 08/09/2017
vkns'k@ ORDER
PER: BHAGCHAND, A.M. This appeal filed by the assessee emanates from the order of the ld. CIT(A)-I, Jaipur dated 28/09/2016 for A.Y. 2012-13 wherein the assessee has raised following grounds of appeal:
"1. That on the facts and in the circumstances of the case the ld. CIT(A) is wrong, unjust and has erred in law in upholding finding recorded by the assessing officer that deposit by the appellant in capital gain account of Rs. 1,25,00,000/- on 28.03.2013 for construction of residential house within extended due date of 31-03-2014 u/s 139(4)
2 ITA 1117/JP/2016_ Mahendra Rajnikant Zaveri, Jaipur Vs. ITO, Jaipur of the I.T. Act, 1961 cannot be considered as investment for the purpose of deduction in accordance with section 54F of the I.T.Act, 1961 from long term capital gain and thereby confirming the action of Ld. AO in allowing deduction u/s 54F to Rs. 1,08,53,775/- as against Rs. 2,32,23,657/- correctly claimed by the assessee.
2. That the appellant craves the permission to add to or amend to any of the above grounds of appeal or to withdraw any of them."
2. Brief facts of the case are that the assessee is an individual deriving income from firm(s) M/s Rajnikant Nem Chand & Co. and Goregaon Gan Agency. The assessee during the year sold a land at 5/B, Laxmi Industrial Estate, Link Road, Goregaon, Mumbai on 21.10.2011 for a consideration of Rs. 3,65,25,000/-. The assessee declared Long term capital gain of Rs.
3,53,66,100/- and claimed exemption u/s 54EC at Rs. 50,00,000/- and 54F at Rs. 2,32,23,657/-. The sale of land was effected by Registered Deed of Conveyance cum lease executed between seller(s) and purchaser vide deed dated 09.09.2011 and presented before Sub-registrar Distt.
Borivali on 09.09.2011 Mumbai. The Assessing Officer accepted the claim of deduction u/s 54EC of the Act for Rs. 50,00,000/-. However, he restricted the deduction to Rs. 1,10,25,000/- u/s 54F of the Act being amount deposited in capital gain deposit scheme on 28.09.2012. He also claimed the deduction of Rs. 1,25,00,000/- deposited on 28.03.2013 3 ITA 1117/JP/2016_ Mahendra Rajnikant Zaveri, Jaipur Vs. ITO, Jaipur which was disallowed. The reason for not allowing the claim the assessee was that it was not deposited before due date of filing return of income u/s 139(1) of I.T. Act, 196. The CIT(A) dismissed the appeal of the assessee.
3. The only issue raised by the assessee in the appeal is for not allowing the deduction u/s 54F of the I.T. Act in full as the assessee claimed deduction of Rs. 2,32,23,657/- and AO restricted it to Rs.
1,08,53,775/-.
4. The ld. AR submitted that this issue is squarely covered by various decisions the Hon'ble ITAT, Jaipur Bench including the case of Smt. Maya Devi Sharma vs. ACIT dated 25/07/2017 and the relevant pages are 24 to 34 of the order. He also submitted that the Hon'ble ITAT, Jaipur has also considered the decision of Hon'ble Mumbai High Court in the case of Humayun Suleman Merchant vs. CCIT [2006] 73 taxmann.com 2(Bombay). The ld. AR also placed reliance on the decisions of Hon'ble Gauhati High Court, in the case of CIT vs. Rajesh Kumar (2006) 286 ITR 274 dated 09.08.2006. He also relied on the decision of ITAT Pune, Bench in the case of Mahesh Nemichandra Ganeshwade vs. ITO reported in [2012] 21 tamann.com 136 (Pune). The Ld. AR also placed reliance on 4 ITA 1117/JP/2016_ Mahendra Rajnikant Zaveri, Jaipur Vs. ITO, Jaipur boards circular No. 791 dated 02.06.2000. The ld. AR also filed the written submissions as under:-
"It is submitted that the assessee presented the deed of conveyance cum lease deed for transfer of property on 09.09.20111 by receiving part consideration before that date and part by receiving post dated chques as evident from registered sale deed as detailed hereunder:-
Date Cheque No. Amount
(Rs.)
12.03.2011 RTCG 12,50,000/-
31.03.2011 931042-HDFC Bank 12,50,000/-
11.10.2011 202328-S.V. Co-op. Bank 52,75,000/-
11.02.2012 202333-S.B.Co-op. Bank 1,43,75,000/-
11.06.2012 202337-S.B.Co.op.Bank 1,43,75,000/-
However at the request of purchaser the assessee required to present the cheque No. 202333 dated 11.02.2012 for Rs. 1,43,75,000/-19.04.2012 and the same was credited in his Bank A/c on 21.04.2012. Similarly at the request of purchaser the assessee required to accept the cheque No. 202378 dated 18.10.2012 in place of Cheque No. 202337 dated 11.06.2012 which was credited in his Bank A/c on 20.10.2012. thus assessee received major part of consideration for sale much after date of conveyance i.e. transfer of property and Rs. 1,43,75,000/- after due date of filing of return.
In view of the above facts of the case and from positions of law the assessee on show cause notice of Ld. A.O. filed his explanation which was rejected by Ld. A.O. In this connection it is submitted that Ld. A.O. has while invoking provisions of Section 54F (4) has not properly appreciated the position of law while disallowing the claim of deduction u/s 54F of I.T. Act rightly claimed by assessee. The
5 ITA 1117/JP/2016_ Mahendra Rajnikant Zaveri, Jaipur Vs. ITO, Jaipur Section 54F mandates that the amount of net consideration which is not appropriated by the assessee towards the purchase or construction of new asset within specified period(s) u/s 54F(2) before the date of furnishing the return of income u/s 139 shall be deposited by him before furnishing such return in capital gain deposit scheme. The provisions of section 54F (4) are akin to Section 54 (2) and the Gauhati High Court in case of CIT vs. Rajesh Kumar Jalan (2006) 286 ITR 274 while interpreting Section 54 (2) which is equally applicable for provisions of section 54 F (4) held as under:-
"From a plain reading of sub-s. (2) of s. 54 of the IT Act, 1961, it is clear that only s. 139 of the IT Act, 1961, is mentioned in s. 54 (2) in the context that the unutilized portion of the capital gain on the sale of property used for residence should be deposited before the date of furnishing the return of income-tax under s. 139 of the IT Act, Sec. 139 of the IT Act, 1961 cannot be meant only as s. 139 (1) but it means all sub-sections of s. 139 of the IT Act, 1961. Under sub-s. (4) of s. 139 of the IT Act any person who has not furnished a return within the time allowed to him under sub- s. (1) of s. 142 may furnish the return for any previous year at any time before the expiry of one year from the end of the relevant assessment year or before the completion of the assessment whichever is earlier. Such being the situation, it is the case of the respondent/assessee that the respondent/assessee could fulfil the requirement under s. 54 of the IT Act for exemption of the capital gain from being charged to income tax on the sale of property used for residence upto 30th March, 1998, in as much as the return of income tax for the asst. Yr. 1997-98 could be furnished before the expiry of one year from the end of the relevant assessment year or before the completion of the assessment whichever is earlier under sub-s. (4) of s. 139 of the IT Act, 1961."
The similar interpretation of Section 54 (2) by Karnataka High Court in case of Fathima Bai vs. I.T.O. (2009) 32 DTR (Kar.) 243. The various ITAT Benches followed the said judgments in case of CIT vs. Rajesh Kumar Jalan and Fathima Bai vs. I.T.O. while deciding various case. In case of 6 ITA 1117/JP/2016_ Mahendra Rajnikant Zaveri, Jaipur Vs. ITO, Jaipur Nipun Mehrotra vs. ACIT ITAT, Bangalore Bench in (2008)110 ITR 520 (Bang.) held the same view. In a recent decision in case of G. Ramesh vs. ITO Chennai (2016) 159 ITD 633 wherein it is held that as per sec. 54F(4), in the event ofthe assessee not investing the capital gains either in purchasing the residential house or in constructing a residential house within the period stipulated in sec. 54F (1), if the assessee wants the benefit of sec. 54F, then he should deposit the said capital gains in an account which is duly notified by the Central Government. In other words, if he wants claim of exemption from payment of income-tax by retaining the cash, then the said amount is to be invested in the said account notified by Central Government on this behalf. If the intention is not to retain cash but to invest in construction or any purchase of the property and if such investment is made within the period stipulated therein i.e. Section 139 (4), then section 54F (4) is not at all attracted and therefore, the contention that the assessee has not deposited the amount in the bank account as stipulated and therefore, he is not entitled to the benefit is also not correct reliance was also placed on judgments of Karnataka High Court in case of CIT vs. K. Ram Chandra Rao (2015) 230 taxman 334 and judgment in case of Dr. Xavier J. Pullikal vs. DCIT (2014) 104 DTR 134 (Ker.) The Ld. A.O. in assessment order relied on judgment of ITAT, Delhi Bench in case of Taranbir Sawhney vs. DCIT (2006) 5 SOT 417. The case was decided beforethe judgment of Gauhati High Court in case of CIT vs. Rajesh Kumar Jalan hence cannot be applied. This has been noticed by ITAT, Bangalore Bench in case of Nipun Mehrotra vs. ACIT (supra) and Hon'ble ITAT held the same view.
The CIT(A) has simply followed the judgment of Bombay High Court in case of Humayun Suleman Merchant (Supra) in deciding the appeal while the assessee cited the judgment of CIT Vs. Rejesh Kumar Jalan (supra) & Fathima Bai Vs. I.T.O. (supra) and various ITAT judgments which he did not appreciated at all. It is submitted that decision in Humayun Suleman Merchant (supra0 was incuriam in as much as it had not appreciated the judgment of Guwahati High Court in CIT Vs. Rajesh Kumar Jalan and of Karnataka 7 ITA 1117/JP/2016_ Mahendra Rajnikant Zaveri, Jaipur Vs. ITO, Jaipur High Court in case of Fatima Bai Vs. I.T.O. It is submitted that when judgments of two High Courts and various ITAT benches are in favour of assessee and thre being no judgment of Supreme Court then CIT (A) ought to have followed the judgments which are in favour of assessee in preference to unfavourable judgment of Bombay High Court in case of Humayun Suleman Merchant. The provisions of section 54 (2)/54F(4) have been judicially interpreted by Hon'ble High Courts in CIT Vs. Rajesh Kumar Jalan & Fatima Bai Vs. I.T.O. and only those judgments were available before assessee at the relevant time and he accordingly acted at that time.
In view of the above the assessee having deposited Rs. 1,25,00,000/- in the Capital Deposit Account before due date of furnishing return u/s 139 (4) i.e. 31.03.2013 and so entitled for deduction u/s 54F for said amount and addition of Rs. 1,22,39,882/- made to declared long term capital gain in the hands of assessee deserves to be deleted.
Without prejudice to above it is submitted that as already stated the assessee received a major part of consideration (Rs. 1,43,75,000/-) on 20.10.2012 i.e. after the due date of furnishing return u/s 139 (1) i.e. 30.09.2012 and so it was impossible for him to deposit the money in Capital Gain Deposit A/c before that date. The similar issue came up for consideration before Pune Tribunal in case of Mahesh Nemi Chandra Geneshwade vs. I.T.O. (2012) 73 DTR/147 TTJ 488. The Hon'ble ITAT took into consideration the CBDT Circular No. 791 dated 02.06.2000 and appreciated the impossibility of the assessee being able to invest the amount in specified assets and held that period of 6 months for the purpose of investment in specified assets must be reckoned from the date of receipt of consideration. The said judgment of Hon'ble ITAT held as under:-
The assessee entered into a development agreement on 12.07.2005 in which the consideration was fixed at Rs. 2.50 crores. A correction deed was entered into on 2.7.2007 in which the sale consideration was increased to Rs. 4.90 crores. The assessee invested Rs. 50 lakhs in section 54EC bonds on 3.8.2007 and 27.10.2007. The Assessing Officer
8 ITA 1117/JP/2016_ Mahendra Rajnikant Zaveri, Jaipur Vs. ITO, Jaipur held that the date of transfer was 12.7.2005 and as the section 54EC investments had been made beyond a period of 6 months from the date of transfer, the exemption was not available. The assessee claimed that as it was impossible for him to invest within 6 months from the date of transfer, the period of six months had to be reckoned from the date of receipt of consideration. Held by the Tribunal:
Though section 54EC requires the investment to be made within 6 months of the date of transfer, a technical interpretation cannot be adopted but it has to be interpreted having regard to the purpose and spirit of the section. In circular No. 791 dated 2.6.2000 the CBDT held in the context of capital gains arising under section 45 (2), that through the transfer arises in the year of conversion of a capital asset into stock in trade, the period of six months for investment under section 54EC has to be reckoned from the date of sale of the stock-in -trade. The CBDT appreciated the impossibility of the assessee being able to invest the amount in specified assets within six months from the date of transfer. This interpretation of the CBDT supports the assessee's claim that where the consideration is received much after the date of transfer and it is not possible to invest the same within 6 months of the date of transfer, the period of six months must be reckoned from the date of receipt of consideration. (A.Y. 2006-07).
The Ld. CIT(A) dismissed the alternative contents by simply stating that the above ITAT decision was rendered u/s 54EC of Act and thus not applicable on the facts of the case in respect to deduction u/s 54F. The order of CIT(A) is thus without appreciating the spirit of law in the said CBDT Circular and ITAT judgment.
In case of CBDT Vs. Aditya v. Birla (1988) 170 ITR 377 (SC) the court observed that an exemption provision must be interpreted as the situation demands and not in a technical sense. In case of CIT Vs. J.H. Gotla (1985) 156 ITR 323 (SC) the court observed that interpretation of taxing statute would submit to equitable construction where strict literal construction leads to unjust result.
9 ITA 1117/JP/2016_ Mahendra Rajnikant Zaveri, Jaipur Vs. ITO, Jaipur Thus as the assessee received said consideration on 20.10.2012 and deposited the same in Capital Gain Deposit A/c on 28.03.2013 the relief u/s 54F (4) should be allowed to assessee as in such case it was impossible for him to deposit the sum in capital gain deposit A/c before due date of filing of return i.e. 30.09.2012. The addition of Rs. 1,23,39,802/- made to declared long term capital gain in the hands of assessee deserves to be allowed on this ground also.
It is, therefore, prayed that the deduction of Rs. 1,23,39,802/- claimed by assessee u/s 54F may kindly be allowed to him."
5. On the other hand, ld. DR relied on the order of authorities below.
6. We have heard both the sides. The conveyance deed for transfer of property was presented on 09.09.2011 and registered on 20.10.2011 by Sub-Registrar, Borivali. Part of the consideration was received by that date by assessee. The details of cheques are as under:
Details of consideration and post dated cheques.
Date Cheque No. Amount (Rs.)
12-03-2011 RTCG 12,50,000/-
31-03-2011 931042-HDFC Bank 12,50,000/-
11-10-2011 202328-S.V. Co-op. Bank 52,75,000/-
11-02-2012 202333-S.B. Co. -op. 1,43,75,000/-
Bank
11-06-2012 202337- S.B. Co. -op. 1,43,75,000/-
Bank
On the request of the purchaser Cheque No. 202333 dated 11.02.2012 for Rs. 1,43,75,000/- presented on 19.04.2012 and the same was credited in the assessee account on 21.04.2012. Similarly at the request of purchaser 10 ITA 1117/JP/2016_ Mahendra Rajnikant Zaveri, Jaipur Vs. ITO, Jaipur the assessee accepted the cheque No. 202378 dated 18.10.2012 in place of Cheque No. 202337 dated 11.06.2012. The same was credited to the Bank A/c of the assessee on 20.10.2012. These facts establishes that assessee received major part of sale consideration much after date of conveyance deed. Assessee received Rs. 1,43,75,000/-even after due date of filing of return of income.
7. Admittedly, the sale consideration received beyond the date of transfer of the asset in such a factual situation the Hon'ble ITAT, Pune A Bench while deciding the ITA Nos. 594 to 597/Pn/2010 in the case of Mahesh Nemichandra Ganeshwade vs. ITO in its order dated 29th March, 2012 reported in (2012) 17 ITR_TRIB 116 has held, the claim of the assessee allowable. The Hon'ble Supreme Court in the case of CIT, Bangalore v. J.H.Gotla reported in [1985] 156 ITR 323 (SC) held that if a strict and literal construction of the statute leads to an absurd result, i.e., a result not intended to be subserved by the object of the legislation ascertained from the scheme of the legislation, then, if another construction is possible apart from the strict literal construction, then, that construction should be preferred to the strict literal construction. The Hon'ble Court has held that though equity and taxation are often strangers, attempts should be made that these do not remain always so and if a construction results in equity rather than in injustice, then such 11 ITA 1117/JP/2016_ Mahendra Rajnikant Zaveri, Jaipur Vs. ITO, Jaipur construction should be preferred to the literal construction. The Hon'ble Supreme Court in the case of CIT. West Bengal 1. v. Vegetable Products Limited., Express Newspapers Pvt. Limited : Intervener & Ors held that if two reasonable construction of taxing provision of serving that construction which favour of the assessee must be adopted. This is a well accepted rule of construction recognized by Hon'ble Supreme Court in several decisions. The Hon'ble Gauhati High Court in the case of CIT v.
Rajesh Kumar Jalan [2006] 286 ITR (Gau) held as under:
"From a plain reading of sub-section (2) of section 54 of the Income-tax Act, 1961, it is clear that only section 139 of the Income-tax Act, 1961, is mentioned in section 54(2) in the context that the unutilized portion of the capital gain on the sale of property used for residence should be deposited before the date of furnishing the return of the Income-tax under section 139 of the Income-tax Act. Section 139 of the Income-tax Act, 1961, cannot be meant only section 139(1) but it means all sub-sections of section 139 of the Income-tax Act, 1961. Under sub-section (4) of section 139 of the Income-tax Act any person who has not furnished a return within the time allowed to him under sub-section (1) of section 142 may furnish the return within the time allowed to him under sub-section (1) of section 142 may furnish the return for any previous year at any time before the expiry of one year from the end of the relevant assessment year or before the completion of the assessment year whichever is earlier. Such being the situation, it is the case of the respondent/assessee that the respondent/assessee could fulfil the requirement under section 54 of the Income-tax Act for exemption of the capital gain from being charged to income-tax on the sale of property used for residence up to March 30, 1998, inasmuch as the return of income-tax for the assessment year 1997-98 could be furnished before the expiry of one year from the end of the relevant assessment year or before the completion of the assessment whichever is earlier under sub-
section (4) of section 139 of the Income-tax Act, 1961."
12 ITA 1117/JP/2016_ Mahendra Rajnikant Zaveri, Jaipur Vs. ITO, Jaipur
8. In a recent decision of ITAT Jaipur, Co-ordinate Bench in the case of Smt. Maya Devi Sharma The similar issue has been decided by the ld.
CIT(A) by holding as under:-
"We have heard the rival submissions and perused the material available on record. After examining the material on record and orders of the lower authorities, we find that it is an undisputed fact that assessee had received on-money from the sale of plot in Taru Chhaya Nagar which was reinvested in the new house. This fact was also admitted by assessee's husband in the statement recorded u/s 132(4) of the Act and also when the assessee filed the return of income in response to the notice u/s 153A, the additional income was disclosed on the basis of the investments made in various years. However the AO assessed the income of the assessee in the year when the on-money was received from the sale of plot which action was not disputed by the assessee. The AO herself in the order at page 17 tabulated the details of date- wise investment made by the assessee in the acquisition of new house for which the reference of the seized documents and statements of her husband were also mentioned. The main reason for not allowing the claim by the AO was that the return u/s 153 A of the Act was not filed in time (page 16 of assessment order) and there was no return filed u/s 139(1). In this regard, it was submitted by the ld. AR that assessee had not filed the return u/s 139(1) of the Act under the bonafide belief that since the entire amount of sales consideration was invested in the acquisition of new house, therefore after deduction u/s 54F there would remain no taxable income. Therefore she was not required to file the return of income. Regarding the allowability of claim 54F for belated return filed u/s 153A, it is submitted that sub-section 4 of section 54F provides return filed u/s 153A, it is submitted that sub-section 4 of section 54F provides that the amount of sale consideration has to be appropriated before the date of furnishing return u/s 139 of the Act and there is no mentioned of any sub section of section 139 of the Act. According to ld. AR of the assessee, the investment was made before of 31.03.2009 i.e. the time limit provided u/s 13 ITA 1117/JP/2016_ Mahendra Rajnikant Zaveri, Jaipur Vs. ITO, Jaipur 139(4), the claim of the assessee u/s 54F was rightly allowed by the ld. CIT(A). For this proposition reliance is placed on the following decisions:
[2006] 286 ITR (Gau) CIT v. RAJESH KUMAR JALAN [2011] 339 ITR 610 (P & H) CIT v. MS. JAGRITI AGGARWAL ACIT v. SMT. SAPNA DIMRI ITA NO. 151/DEL/2012 [ITAT DEL0 NIPUN MEHROTRA VS. ACIT (2008) 110 ITD 520 Regarding the observation of the AO that no evidence was found for payment of on-money at the time of acquisition of new property, it is submitted by the AR that in the seized documents, evidences were found for the receipt of on- money and subsequent investment in the acquisition of new properties. The husband of the assessee Shri R.K. Sharma in his preliminary statement recorded during the course of search u/s 132(4) had also admitted the unexplained investment in the acquisition of new properties which is a further proof from the return of income filed by the assessee where such investment was declared as additional undisclosed income, thus the AO cannot play blow hot and blow cold on the same issue as she herself has accepted the receipt of on-money and on the other hand doubted the payment of on-money at the time of reinvestment of the same. The Hon'ble Gujrat High Court in the case of Glass Lines Equipments Co. Ltd V/s CIT reported in 253 ITR 454 has held as under:
"Interpretation of documents - Documents must be read as a whole- it is a well settled canon of interpretation that a document has to be read as a whole" it is not permissible to accept a part and ignore the rest of the document."
Since the assessee has made the payments towards the acquisition of new property within the time limit permissible u/s 139(4) of the Act and the payments have duly been acknowledgement by the AO herself in the assessment order itself, we find no reason to hold that there were no evidence found for such investments. The decision of Hon'ble Jurisdiction High Court in the case of Jai Steel (Supra) is also 14 ITA 1117/JP/2016_ Mahendra Rajnikant Zaveri, Jaipur Vs. ITO, Jaipur not applicable the present case as there is no claim made in the return filed u/s 153A which was not claimed in the original return. In that case, in the original assessment no claim was made towards the deduction u/s 801 which was made afresh in the return filed u/s 153A and under these facts the Hon'ble Court has observed that no fresh claim could be made in the return u/s 153A of the Act. In the present case, the assessee has not filed the return u/s 139(1) of the Act on the bonafide belief that she was entitled for deduction u/s 54F and after such deduction her return was below the maximum amount not chargeable to tax and therefore she did not filed the return of income and when notice u/s 153A was received, she had made the claim of deduction u/s 54F for the full amount of Rs. 78 lacs which was though restricted upto the amount of capital gain declared in the return of Rs. 19,12,542/-. In view of these facts, we are of the considered view that the assessee is entitled for deduction u/s 54F at Rs. 78 lacs as claimed by her and the ld. CIT(A) has rightly allowed the same, therefore, the order of the ld. CIT(A) is upheld on this issue. As a result the grounds taken by the department in this respect are dismissed.
5.6 In the result ITA No. 71/JP/15 of the revenue is dismissed."
9. It is also relevant to note that the sale consideration was received much after due date of filing of return of income which makes impossible for assessee to make the investments on/before due date of filing of return. On the issue of impossibility of performance to invest the amount in specified assets within 6 months from date of transfer, the CBDT appreciated such situation and has clarified that the period of 6 months for making investments in specified assets has to be reckoned from the date of the sale of such stock-in-trade when the right to collect sale consideration in such cases arose, which was much after the date of transfer as contemplated for the purpose of taxation. The Hon'ble ITAT, 15 ITA 1117/JP/2016_ Mahendra Rajnikant Zaveri, Jaipur Vs. ITO, Jaipur Pune Bench (supra) has taken such view and the relevant para is as under:
"The interpretation placed by the CBDT in consultation with the Ministry of Law to the condition of making investment within six months from the date of transfer in section 54EC would support the claim of the assessee in this case also for exemption from capital gain with respect to the impugned sum of Rs. 50 lakhs invested in specified assets on 03-08- 2007 and 27-10-2007. In the present case, admittedly the impugned amount of sale proceeds have been received by the assessee much after the date of transfer i.e., 12-7-2005, so however, it is also emerging from the record that the investments of Rs. 12,50,000 and Rs. 37,50,000 made on 3-8-2007 and 27-10-2007 respectively have been made within six months of receipt of such consideration. Therefore, having regard to the interpretation placed by the CBDT to understand the requirement of making investment within six months from the date of transfer in section 54EC the Tribunal is inclined to uphold the plea of the assessee for exemption from tax on capital gains qua impugned amount of Rs. 50 lakhs. Therefore, on this aspect, assessee has to succeed."
10. Therefore, considering all the relevant facts of the case and also cases relied upon, we allow the appeal of the assessee.
In the net result, appeal of the assessee is allowed.
Order pronounced in the open court on 08/09/2017.
16 ITA 1117/JP/2016_ Mahendra Rajnikant Zaveri, Jaipur Vs. ITO, Jaipur Sd/- Sd/-
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(Kul Bharat) (BHAGCHAND)
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fnukad@Dated:- 08/09/2017
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vkns'k dh izfrfyfi vxzfs 'kr@Copy of the order forwarded to:
1. vihykFkhZ@The Appellant- Mahendra Rajnikant Zaveri, Jaipur
2. izR;FkhZ@ The Respondent- ITO, Jaipur
3. vk;dj vk;qDr@CIT
4. vk;dj vk;qDr¼vihy½@The CIT(A)
5. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur
6. xkMZ QkbZy@ Guard File (ITA No. 1117/JP/2016) vkns'kkuqlkj@ By order, lgk;d iathdkj@Asst. Registrar