R.Ramakrishnan, Bangalore v. DCIT, Bangalore

CO 52/BANG/2010 | 2007-2008
Pronouncement Date: 28-02-2011 | Result: Dismissed

Appeal Details

RSA Number 5221123 RSA 2010
Bench Bangalore
Appeal Number CO 52/BANG/2010
Duration Of Justice 4 month(s) 23 day(s)
Appellant R.Ramakrishnan, Bangalore
Respondent DCIT, Bangalore
Appeal Type Cross Objection
Pronouncement Date 28-02-2011
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 28-02-2011
Assessment Year 2007-2008
Appeal Filed On 05-10-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH B BEFORE DR. O.K. NARAYANAN VICE PRESIDENT AND SMT. P. MADHAVI DEVI JUDICIAL MEMBER ITA NO.992(BANG)/2010 (ASSESSMENT YEAR: 2007-08) DEPUTY COMMISSIONER OF INCOME-TAX CIRCLE 5(1) BANGALORE. APPELLANT VS. SHRI R.RAMAKRISHNAN AYODHYA NO.63 RAVISHANKAR RESIDENCY SANJEEVANAGAR KODIGEHALLI BANGALORE. RESPONDENT C.O.NO.52(BANG)/2010 (IN ITA NO.992(BANG)/2010) (ASSESSMENT YEAR: 2007-08) (BY THE ASSESSEE) ***** REVENUE BY: SMT. AMRITA RANJAN. ASSESSEE BY : SHRI R.RAMAKRISHNAN. O R D E R PER SMT. P. MADHAVI DEVI JM : THE APPEAL BY THE REVENUE AND THE CROSS OBJECTION S BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF THE CIT(A)-II BANGALORE DATED 2-3-2010 FOR THE ASSESSMENT YEAR 2 007-08. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: ITA NO.992 & CO 52(BANG)/2010 PAGE 2 OF 5 1. THE ORDER OF THE CIT(A) IS OPPOSED TO THE LAW AND FACTS OF THE CASE. 2. THE CIT(A) HAS ERRED IN DIRECTING THE AO TO ALLOW EXEMPTION UNDER CAPITAL GAINS FOR HAVING INVESTED A SUM OF RS.50 LAKHS IN REC BONDS ON 24-1-2007 EVEN THOUGH THE LAST DATE FOR DEPOSIT OF THE SAID BOND EXPIRED ON31-12-2006. THE CIT(A) HAS ERRED IN TAKING INTO ACCOUNT THE PRESS NOTE ISSUED BY THE BOMBAY CHARTERED ACCOUNTANT ASSOCIATION MENTIONING THAT THE INVESTMENTS IN THE REC BONDS COULD BE DONE TILL 31-3-2007 WHICH IS NOT AUTHENTICATED GOVT.DOCUMENT. 3. THE CIT(A) HAS GONE BY THE ASSESSEES VERSION OF PRESS NOTE OF CAS ASSOCIATION WITHOUT VERIFYING THE SAME FROM THE AO OR FROM ANY OTHER GOVERNMENT SOURCES. 4. FOR THESE AND SUCH OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING OF THE APPEAL THE ORDER OF THE LEARNED CIT(A) MAY BE SET ASIDE AND THAT THE ORDER OF THE AO MAY BE RESTORED. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S AN INDIVIDUAL AND IS A CHARTERED ACCOUNTANT. THE ASSE SSEE FILED RETURN OF INCOME FOR THE ASSESSMENT YEAR 2007-08 DE CLARING INCOME UNDER THE HEAD CAPITAL GAINS OF RS.64 15 0 16/-. THEREAFTER THE ASSESSEE CLAIMED EXEMPTION U/S 54EC OF THE INCOME-TAX ACT 1961 [HEREINAFTER REFERRED TO AS 'T HE ACT'] IN RESPECT OF INVESTMENT MADE TO THE EXTENT OF RS.50 L AKHS IN RURAL ELECTRIFICATION CORPORATION LTD. (REC) BONDS ON 24-1-2007. THE AO REJECTED THE CLAIM OF THE ASSESS EE FOR EXEMPTION ON THE GROUND THAT THE ASSESSEE HAS NOT M ADE THE INVESTMENT IN THE BONDS WITHIN THE STIPULATED PERIO D OF SIX MONTHS FROM THE DATE OF TRANSFER. AGGRIEVED BY THE SAME THE ITA NO.992 & CO 52(BANG)/2010 PAGE 3 OF 5 ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) WHO ALLOWED THE SAME AND THE REVENUE IS IN APPEAL BEFORE US. 4. SMT.AMRITA RANJAN THE LEARNED DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDER OF THE AO AND SU BMITTED THAT THE ASSESSEE BEING A CHARTERED ACCOUNTANT WAS WELL AWARE OF THE LEGAL POSITION AND SHOULD HAVE INVESTED INTO THE BONDS WITHIN THE PERIOD OF 6 MONTHS FROM THE DATE OF TRAN SFER AND ON FAILURE TO DO SO HE IS NOT ENTITLED TO THE SAID EX EMPTION U/S 54EC OF THE ACT. SHE SUBMITTED THAT THE CIT(A) HAS ERRONEOUSLY RELIED UPON THE PRESS NOTE ISSUED BY TH E BOMBAY CHARTERED ACCOUNTANTS ASSOCIATION MENTIONING THAT T HE INVESTMENT IN REC BONDS COULD BE DONE TILL 31-3-200 7 WHICH IS NOT AUTHENTICATED BY ANY GOVERNMENT DOCUMENT. SHE HAS ALSO FILED A COPY OF THE NOTIFICATION DATED 22-12-2006 W HEREIN THE CENTRAL GOVERNMENT HAS NOTIFIED THE BONDS FOR AN AM OUNT OF RS.3 500 CRORES TO BE ISSUED BY THE REC DURING THE PERIOD FROM 26-12-2006 TO 31-3-2007 AND SUBMITTED THAT THE ASSE SSEE HAS INVESTED ON 24-1-2007 WHICH IS AFTER THE EXPIRY OF THE SPECIFIED PERIOD EVEN THOUGH THEY WERE AVAILABLE FROM 26-12-2 006 AND THEREFORE AS PER THIS NOTIFICATION ALSO THE ASSESS EE IS NOT ENTITLED TO THE EXEMPTION. THE ASSESSEE ON THE OTHER HAND SUBMITTED THAT THE BONDS OF REC WERE NOT AVAILABLE TILL 26-12-2006 WHI CH WAS NOTIFIED BY THE NOTIFICATION OF THE CENTRAL GOVERNM ENT DATED 22-12-2006 AND THEREFORE IMMEDIATELY AFTER THE ISSU E OF THE NOTIFICATION OF THE SAID BONDS THE ASSESSEE HAS IN VESTED INTO ITA NO.992 & CO 52(BANG)/2010 PAGE 4 OF 5 THE BONDS AND THE DELAY IN THE SAID INVESTMENT IS D UE TO REASONS BEYOND HIS CONTROL. HE SUBMITTED THAT THE CIT(A) HAS RIGHTLY CONSIDERED THE SAME BEFORE ALLOWING THE APP EAL AND THEREFORE NEEDS NO INTERFERENCE. 5. HAVING HEARD BOTH THE PARTIES AND HAVING CONSID ERED THE RIVAL CONTENTIONS WE FIND THAT THE CIT(A) HAS RIGHTLY CONSIDERED THAT THE BONDS WERE NOT AVAILABLE AT THE TIME OF TRANSFER OF THE ASSET AND THE ASSESSEE HAS MADE INV ESTMENT AGGREGATING MORE THAN RS.50 LAKHS IN THE BONDS OF R EC AFTER THEY HAVE BEEN NOTIFIED ON 22-12-2006 AND THAT BY V IRTUE OF PROVISO TO CLAUSE (B) OF SUB-SECTION (3) OF SECTION 54EC INSERTED BY THE FINANCE ACT 2007 WITH RETROSPECTIVE EFFECT FROM 1-4-2006 THE ASSESSEE SATISFIES THE CONDITIONS LAID DOWN U/S 54EC OF THE ACT. IN VIEW OF THE SAME WE ARE OF TH E OPINION THAT THE ORDER OF THE CIT(A) IS TO BE CONFIRMED AND THE REVENUES APPEAL IS ACCORDINGLY DISMISSED. 6. THE CROSS OBJECTION FILED BY THE ASSESSEE IS O NLY IN SUPPORT OF THE ORDER OF THE CIT(A) AND THEREFORE NE EDS NO ADJUDICATION. IT IS ACCORDINGLY DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH FEBRUARY 2011. SD/- SD/- (DR. O.K. NARAYANAN) VICE PRESIDENT (SMT. P.MADHAVI DEVI) JUDICIAL MEMBER EKS ITA NO.992 & CO 52(BANG)/2010 PAGE 5 OF 5 COPY TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A) CONCERNED 4. CIT 5. DR ITAT BANGALORE 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR ITAT BANGALORE