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29-11-2019, Educomp Infrastructure & School, Section 132, 32, Tribunal Delhi

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2 weeks 1 day ago #11603 by amit
Section - 132, 32, 43(6), 131, 271(l)(c)
Order Date - 29-11-2019
Favouring - Revenue Partly allowed for statistical purposes
Court - Tribunal Delhi
Appellant - ACIT
Respondent - Educomp Infrastructure & School Management Ltd.
Justice - SUDHANSHU SRIVASTAVA JM & O.P. KANT AM
Citation - 1119Taxpundit295
Appeal No. - ITA No.6894/Del/2015
Asstt. Year - 2012-13

Order

PER : O.P. KANT, AM

This appeal by the assessee is directed against order dated 29.12.2016 passed by the learned Commissioner of Income Tax (Appeals)-10, New Delhi, [in short ‘learned CIT(A)’] for assessment year 2013-14 raising following grounds:

1. That on the facts and circumstances of the case and in law, the learned Commissioner of Income Tax (Appeals) has erred in upholding the order of assessing authority wherein she had made the addition of Rs.50 lakhs by restricting the exemption u/s 54EC up to Rs.50 lakhs out of total claim in respect of Rs.1 Crore on investment in Bonds made within six months of sale of property in two different financial years amounting to Rs.50 lakhs in each financial year.

2. That the petitioner assessee craves the leave to this Hon’ble Court to add, deleted and modify any or all the clauses of Grounds of appeal.

2. Briefly stated facts of the case are that the assessee filed return of income on 21.09.2013, declaring total income of Rs.1,51,77,310/-. The case of the assessee was selected for scrutiny and statutory notices were issued and complied with. The Assessing Officer observed that during the year under consideration, the assessee has sold a property and worked out long term capital gain to the tune of Rs.1,93,16,309/-. Against the long term capital gain computed, the assessee claimed deduction of Rs. 1 crores under section 54EC of the Income-tax Act, 1961 (in short ‘the Act’). In support of the claim, the assessee submitted that he invested in REC Bonds for Rs.50 lakhs each in the month of January, 2013 and in the month of April, 2013. According to the Assessing Officer, in terms of provisions of Section 54EC of the Act, the assessee was entitled for the investment of Rs.50 lakhs made in the financial year 2012-13 only. According to the Assessing Officer, the assessee has abused provisions of the law, which in clear terms limit the investments under Section 54EC up to Rs. 50 lakhs only. The Assessing Officer held that reply of the assessee was not tenable and the intention of the legislation was clear that investment made on or after the 1st Day of April, 2017 in the long term specified assets by an assessee during the financial year does not exceed Rs. 50 lakhs. It was further observed by the Assessing Officer that the contention of the assessee cannot be held to be acceptable, since the provisions does not provide two different treatments to two different assessees and one who sells the property between April to September of the financial year and claims exemption u/s54EC, is put at a disadvantage since the exemption available to him would be only Rs.50,00,000/- and secondly, the assessee who sells the property between October and March and claims exemption u/s 54EC, the investment can be made of Rs.50 lakhs in the current financial year and Rs. 50 lakhs in the subsequent financial year. With the above discussion, the Assessing Officer held that the grant of exemption under Section 54EC to the extent of Rs. 1 crore will vitiate the original intention of the legislature leading to discrimination amongst tax payers on the same issue. The Assessing Officer also relied on the proviso to sub-section (1) of Section 54EC and observed that intention of the legislature in inserting the said proviso to restrict the exemption to Rs.50 lakhs in the financial year so that the benefit can be given to many small investors. The Assessing Officer also relied on the various judicial pronouncements on issue of interpretation of statute. Further, relying on the decision of the Tribunal, Jaipur Bench, in the case of ACIT Vs. Shri Raj Kumar Jain & Sons (HUF), he restricted the deduction to the amount of Rs.50 lakhs only. On further appeal, the learned CIT(A) also upheld the finding of the Assessing Officer observing as under:

“4.1 I have carefully considered the written submissions of Ld. AR and assessment order passed by the Assessing Officer, the only issue involved is allowance of claim of exemption u/s. 54EC, which has been restricted by the Assessing Officer to the extent of Rs.50 lacs as per proviso to above section, which provides that the investment made on or after the first day of April, 2007 in the long term specified assets by an assessee during any financial year does not exceed Rs.50 lacs On the other hand, appellant is claiming

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