Mrs. Dawn Olivia Taylor, Bangalore v. ITO, Bangalore

ITA 1121/BANG/2009 | 2005-2006
Pronouncement Date: 13-04-2010 | Result: Allowed

Appeal Details

RSA Number 112121114 RSA 2009
Bench Bangalore
Appeal Number ITA 1121/BANG/2009
Duration Of Justice 4 month(s) 16 day(s)
Appellant Mrs. Dawn Olivia Taylor, Bangalore
Respondent ITO, Bangalore
Appeal Type Income Tax Appeal
Pronouncement Date 13-04-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 13-04-2010
Assessment Year 2005-2006
Appeal Filed On 27-11-2009
Judgment Text
PAGE 1 OF 11 ITA N OS.1113 & 1121/BANG/2009 1 IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH B' BEFORE DR. O K NARAYANAN VICE PRESIDENT AND SHRI GEORGE GEORGE K J.M. ITA NOS.1113 & 1121/BANG/09 (ASST. YEAR 2005-06) MRS. DAWN OLIVIA TAYLOR NO.404 4TH FLOOR PRESTIGE MERIDIAN-2 BANGALORE-1. - APPELLANT VS THE INCOME TAX OFFICER WARD-1(1) BANGALORE. - RESPONDENT APPELLANT BY : SHRI S RAMASUBRAMANIAN C.A. RESPONDENT BY : SMT. JACINTA ZIMIK VASHAI ADDL.CI T O R D E R PER GEORGE GEORGE : THESE APPEALS FILED BY THE ASSESSEE RELATE TO ASS T. YEAR 2005-06. 2. ITA NO.1113/09 ARISE OUT OF CIT(A)'S ORDER DAT ED 22.9.2009. THE ORDER OF CIT(A) DATED 22.9.2009 IS PURSUANT TO A MISCELLANEOUS PETITION FILED BY THE ASSESSEE. WHER EAS ITA NO.1121/09 ARISE OUT OF CIT(A)'S ORDER DATED 30.4.2008. THERE IS A DELAY OF 506 DAYS IN FILING ITA NO.1121/09 AND A PETITION HAS BE EN FILED FOR CONDONING THE DELAY. THE REASONS STATED FOR CONDO NATION OF DELAY ARE AS FOLLOWS:- PAGE 2 OF 11 ITA N OS.1113 & 1121/BANG/2009 2 'THE LEARNED CIT(A) PASSED AN ORDER DATED 30.4.2008 U/S 250 OF THE I T ACT 1961. THE SAID ORDER WAS RECEIVED BY THE ASSESSEE ON 9.5.2008. A MISTAKE APPARENT FROM RECORD CREPT IN THE SAID APPELLATE ORDER. TO CORRECT THE MISTAKE THE ASSESSEE WAS ADVISED TO FILE A MISCELLANEOUS PETITION AGAINST THE ORDER DATED 30.4.2008 BECAUSE OF FOLLOWING REASONS:- A) IF THE CONTENTION THAT THE COST INFLATION INDEX FOR THE YEAR 1981-82 IS TO BE ADOPTED IS NOT ACCEPTED AND IF THE EXEMPTION U/S 54EC OF THE ACT IS GRANTED TO THE EXTENT OF RS.75 LAKHS THEN THE TAX AND INTEREST PAYABLE WOULD BE ONLY RS.33 000/- APPROXIMATELY. B) IT IS A MISTAKE APPARENT FROM RECORD AND RECTIFIABLE U/S 251 R.W.S. 154 OF THE ACT. THE ASSESSEE WAS UNDER THE IMPRESSION THAT THE APPEAL IS TO BE FILED BEFORE THE ITAT WITHIN 60 DAYS FROM THE DATE OF COMMUNICATION OF THE ORDER. THE ASSESSEE FILED A MISCELLANEOUS PETITION ON 2.6.2008. THE MISCELLANEOUS PETITION SHOULD HAVE BEEN DISPOSED OFF BY 1/12/2008. THE LEARNED CIT(A) DISMISSED THE MISCELLANEOUS PETITION VIDE ORDER DATED 22.9.2009 IN A CRYPTIC MANNER WITHOUT STATING ANY REASONS. THE ASSESSEE WAS CONFIDENT THAT THE MISCELLANEOUS PETITION WOULD BE ALLOWED AS THE MATTER DOES NOT INVOLVE ANY DEBATABLE ISSUE IN LAW. BUT THE MISCELLANEOUS PETITION GOT DISMISSED. IF THE MISCELLANEOUS PETITION HAD BEEN ALLOWED THE APPROXIMATE TAX AND INTEREST PAYABLE WOULD HAVE BEEN RS.33 000/- AND IT IS NOT WORTHWHILE TO FILE AN APPEAL CONTESTING A LIABILITY OF ONLY RS.33 000/-. SINCE THE MISCELLANEOUS PETITION HAS BEEN DISMISSED THE TAX LIABILITY INCLUDING INTEREST IS INCREASED TO RS.4 25 617/-. HENCE THE ASSESSEE HAS DEEMED IT FIT TO FILE AN PAGE 3 OF 11 ITA N OS.1113 & 1121/BANG/2009 3 APPEAL AGAINST THE CIT(A)'S ORDER DATED 30.4.2008. THE APPEAL HAD TO BE FILED BY 8.7.2008. THE APPEAL IS FILED ON 26.11.2009. THERE IS A DELAY OF 506 DAYS IN FILING THE APPEAL. IT IS PRAYED THAT T HE HON'BLE ITAT BE PLEASED TO CONDONE THE DELAY OF 506 DAYS IN FILING THE APPEAL AND ADMIT THE APPEAL ON MERITS IN THE INTEREST OF EQUITY JUSTICE AND GO OD CONSCIENCE'. 3. WE ARE SATISFIED WITH THE REASONS STATED IN THE ABOVE CONDONATION PETITION. THE M.P. HAS BEEN FILED WITH IN THE TIME LIMIT SPECIFIED FOR FILING THE APPEAL BEFORE THE CIT(A). (THE APPEAL BEFORE THE CIT(A) IS TO BE FILED ON OR BEFORE 8.7.2008 WHE REAS THE M.P. HAS BEEN FILED ON 2/6/2008). IN THE INTEREST OF JUSTIC E AND EQUITY WE CONDONE THE DELAY AND PROCEED TO DISPOSE OF THE APP EAL ON MERIT. 4. SINCE COMMON ISSUES ARE INVOLVED IN THESE APPEA LS THEY ARE HEARD TOGETHER AND DISPOSE OF BY THIS CONSOLIDA TED ORDER FOR THE SAKE OF CONVENIENCE AND BREVITY. 5. WE SHALL FIRST PROCEED TO DISPOSE OF ITA NO.112 1/09 AS IT IS DIRECTED AGAINST THE MAIN ORDER OF THE CIT(A) DA TED 30.4.2008 AND DISPOSAL OF THE SAME WOULD RENDER THE OTHER APPEAL INFRUCTUOUS. RELEVANT FACTS OF THE CASE ARE AS FOLLOWS:- ASSESSEE IS AN INDIVIDUAL ASSESSED TO INCOME TAX BY INCOME TAX OFFICER WARD-1(1) BANGALORE. DURING T HE PREVIOUS YEAR ENDED 31ST MARCH 2005 RELEVANT TO ASST. YEAR 2005 -06 THE ASSESSEE SOLD A PROPERTY FOR RS.84 00 550/-. THE SAID PROPE RTY WAS INHERITED BY THE ASSESSEE ON 2ND APRIL 1999 ON THE DEATH OF HER MOTHER. THE ASSESSEE'S MOTHER HAD ACQUIRED THE PROPERTY ON 10TH SEPTEMBER 1962. PAGE 4 OF 11 ITA N OS.1113 & 1121/BANG/2009 4 THE ASSESSEE CLAIMED THAT SHE IS ENTITLED TO OPT FO R FAIR MARKET VALUATION AS ON 1ST APRIL 1981 U/S 55(2)(B)(II) OF INCOME-TA X ACT AND ALSO INDEX THE COST OF ACQUISITION FROM 1ST APRIL 1981. THE LEARNED ASSESSING OFFICER HELD THAT THE ASSESSEE IS ENTITLED TO OPT F OR FAIR MARKET VALUE AS ON 1ST APRIL 1981 BUT HAVING INHERITED THE PROPERT Y ON 2ND APRIL 1999 SHE IS ENTITLED TO INDEX IT ONLY FROM 1999-20 00. IT MAY ALSO BE MENTIONED HERE THAT THE ASSESSEE HAS INVESTED A SUM OF RS.75 00 000/- IN THE BONDS ISSUED BY RURAL ELECTRIFICATION CORPOR ATION LIMITED NATIONAL HOUSING BANK AND SMALL INDUSTRIES DEVELOPM ENT BANK OF INDIA. 5.1 SINCE THE CAPITAL GAINS DETERMINED BY THE ASSE SSEE WERE ONLY RS.58 65 180/- THE ASSESSEE IN THE RETURN R ESTRICTED THE CLAIM U/S 54EC OF THE ACT TO RS.58 65 180/- EVEN THOUGH THE A MOUNT INVESTED WAS RS.75 00 000/-. THE ASSESSEE HAD FURNISHED PRO OF FOR HAVING INVESTED RS.75 00 000/- TO THE ASSESSING OFFICER DU RING THE HEARING. THE LEARNED ASSESSING OFFICER DETERMINED THE CAPITA L GAINS AT RS.76 37 673/-. BUT HE ALLOWED A DEDUCTION OF ONLY RS.58 65 180/- U/S 54EC OF THE ACT IGNORING THE FACT THAT THE TOTAL IN VESTMENT WAS RS.75 00 000/-. 6. AGGRIEVED BY THE AFORESAID ORDER THE ASSESSEE MOVED AN APPEAL BEFORE THE LEARNED COMMISSIONER OF INCOME TA X (APPEAL) BANGALORE. THE ASSESSEE SUBMITTED BEFORE THE LEARN ED COMMISSIONER OF INCOME TAX (APPEAL) THAT : PAGE 5 OF 11 ITA N OS.1113 & 1121/BANG/2009 5 (I) VALUE AS ON 1.4.1981 SHOULD BE INDEXED AS THE ASSET WAS ACQUIRED UNDER WILL. (II) THE LEARNED ASSESSING OFFICER OUGHT TO HAVE ALLOWED THE DEDUCTION U/S 54EC OF THE ACT TO THE EXTENT OF RS.75 LAKHS AS HE HAS COMPUTED THE CAPITA L GAIN AT RS.76 18 593/- AND HE SHOULD NOT HAVE RESTRICTED IT TO RS.58 65 180/-. 7. THE LEARNED CIT(A) DISMISSED THE APPEAL VIDE OR DER DATED 30.4.2008. HE HELD THAT THE COST INFLATION INDEX O F THE FINANCIAL YEAR 1998-99 (BEING THE YEAR IN WHICH THE ASSESSEE INHER ITED THE PROPERTY) SHOULD BE ADOPTED. SO FAR AS SECOND ISSUE IS CONCE RNED THE LEARNED CIT(A) HELD AS UNDER:- 'ON THE SECOND ISSUE REGARDING THE ASSESSEE'S CONTENTION THAT SHE IS ENTITLED TO ELIGIBLE DEDUCTI ON U/S 54EC TO THE EXTENT OF RS.75 LAKHS AS THE TOTAL INVESTMENT IN BONDS WAS RS.75 LACS SECTION 54EC IS VERY CLEAR AND STIPULATES THAT THE AMOUNT OF EXEMPTION U/S 54EC IS THE AMOUNT OF CAPITAL GAINS GENERATED ON TRANSFER OF CAPITAL ASSET OR THE AMOUNT INVESTED IN SPECIFIED ASSET WHICHEVER IS LOWER. IN THIS CASE THE TOTAL LONG TERM CAPITAL GAIN AMOUNTS TO RS.58 65 180/-. ACCORDINGLY THE ACTION OF THE ASSESSING OFFICER ON THIS POINT IS IN ORDER AND IS CONFIRMED'. 8. LATER A MISCELLANEOUS APPLICATION WAS FILED. SINCE ACCORDING TO THE ASSESSEE THE CIT(A) HAD PROCEEDED ON THE ASSUMPTION THAT CAPITAL GAINS CHARGED IS ONLY RS.58 65 180/- B UT IT IS EVIDENT FROM THE ASSESSMENT ORDER THAT THE CAPITAL GAINS DETERMI NED BY THE ASSESSING OFFICER IS RS.76 18 593/-. HOWEVER THE MISCELLANE OUS APPLICATION WAS DISMISSED AND SUBSEQUENT TO THE DISMISSAL OF TH E MISCELLANEOUS PAGE 6 OF 11 ITA N OS.1113 & 1121/BANG/2009 6 APPLICATION THE ASSESSEE HAS FILED APPEAL AGAINST THE MAIN ORDER OF THE CIT(A) DATED 30.4.2008 RAISING THE FOLLOWING EFFECT IVE GROUNDS:- I) THAT THE LEARNED CIT(A) ERRED IN LAW AND ON FACTS I N HOLDING THAT THE YEAR 1999-00 (BEING IN THE YEAR WHICH THE ASSESSEE ACQUIRED THE PROPERTY UNDER WILL ) IS TO BE ADOPTED AS THE YEAR OF ACQUISITION FOR THE PURPOSE OF INDEXATION INSTEAD OF ACCEPTING THE CLAI M OF ASSESSEE TO INDEX THE FAIR MARKET VALUE W.E.F. 1.4.1981. II) THAT THE LEARNED CIT(A) OUGHT TO HAVE HELD THAT THE LEARNED ASSESSING OFFICER ERRED IN LAW AND ON FACTS IN RESTRICTING THE EXEMPTION U/S 54EC OF THE ACT TO RS.58 65 180/- EVEN THOUGH THE ASSESSEE HAD INVESTED RS.75 LAKHS IN THE ELIGIBLE BONDS. III) THAT THE FINDING OF THE LEARNED CIT(A) THAT THE CAPITAL GAIN IS RS.58 65 180/- AND HENCE THE EXEMPTION U/S 54EC SHOULD BE RESTRICTED TO RS.58 65 180/- IS BASED ON TOTAL MISCONSTRUCTION OF FACTS AND HENCE IS LIABLE TO BE QUASHED. 9. THE LEARNED AR SUBMITTED THAT THE ISSUE IN QUES TION RAISED IN GROUND NO.1 IS SQUARELY COVERED BY THE DECISION OF THE SPECIAL BENCH IN THE CASE OF DCIT V MANJULA J SHAH 380 (AT) ITR 4 17 (MUM.). ON THE 2ND AND 3RD GROUNDS MENTIONED ABOVE IT WAS SUB MITTED THAT THE ASSESSING OFFICER HAS ERRED IN RESTRICTING THE CLAI M OF EXEMPTION U/S 54EC OF THE ACT TO RS.58 65 180/-. IT WAS SUBMITTE D THE ASSESSEE HAD INVESTED RS.75 LAKHS IN THE ELIGIBLE BONDS AND SINC E THE CAPITAL GAINS WAS ENHANCED TO RS.76 18 18 593/- BY THE ASSESSING OFFICER THE ASSESSEE OUGHT TO HAVE BEEN GIVEN THE BENEFIT OF EX EMPTION UP TO THE INVESTMENT MADE NAMELY RS.75 LAKHS. PAGE 7 OF 11 ITA N OS.1113 & 1121/BANG/2009 7 10. ON THE OTHER HAND THE LEARNED DR RELIED ON TH E FINDINGS/CONCLUSION OF THE CIT(A). 11. WE HAVE HEARD THE RIVAL SUBMISSION AND PERUSED THE MATERIAL ON RECORD. WE ARE OF THE FIRM VIEW THE ISSUE IN QUESTION IS SQUARELY COVERED BY THE DECISION OF THE SPECIAL BEN CH (SUPRA) RELIED ON BY THE LEARNED AR. THE FACTS CONSIDERED BY THE SP ECIAL BENCH ARE AS FOLLOWS:- FOR THE ASST. YEAR 2004-05 THE ASSESSEE DECLARED LONG TERM CAPITAL GAINS ARISING FROM SALE OF A RESIDENTIAL FL AT WHICH HAD BEEN RECEIVED BY THE ASSESSEE AS A GIFT UNDER A GIFT DEE D DATED FEBRUARY 1 2003 FROM HER DAUGHTER WHO HAD PURCHASED IT ON JANU ARY 29 1993. ADOPTING THE COST INFLATION INDEX OF 223 APPLICABLE TO THE FINANCIAL 1992-93 SHE WORKED OUT THE INDEXED COST OF ACQUISI TION BY TAKING THE COST INFLATION INDEX OF 463 APPLICABLE TO THE YEAR IN QUESTION. ACCORDING TO THE ASSESSING OFFICER THE FLAT HAVING BEEN RECEIVED BY THE ASSESSEE AS GIFT ONLY ON FEBRUARY 1 2003 THE FIRST YEAR IN WHICH IT WAS HELD BY HER WAS FINANCIAL YEAR 2002-03 AND THER EFORE THE COST INFLATION INDEX OF 447 APPLICABLE TO THAT YEAR SHOU LD HAVE BEEN ADOPTED FOR THE PURPOSE OF ARRIVING AT THE INDEXED COST OF ACQUISITION. THE COMMISSIONER (APPEALS) HELD THAT THE PROVISIONS OF CLAUSE (B) OF EXPLANATION 1 TO SECTION 2(42A) WERE APPLICABLE IN THE CASE OF THE ASSESSEE AND THE CAPITAL ASSET HAVING BECOME THE PR OPERTY OF THE ASSESSEE UNDER CIRCUMSTANCES MENTIONED IN SECTION 4 9(1) THE PERIOD FOR WHICH THE ASSET WAS HELD BY THE PREVIOUS OWNER WAS LIABLE TO BE INCLUDED IN DETERMINING THE PERIOD OF HOLDING OF TH E ASSET BY THE PAGE 8 OF 11 ITA N OS.1113 & 1121/BANG/2009 8 ASSESSEE AND THERE WAS NOTHING TO INDICATE THAT FOR DETERMINING THE INDEXED COST OF ACQUISITION THE PROVISIONS OF SECT ION 2(42A) AND SECTION 49(1) SHOULD NOT BE FOLLOWED. HE THEREFOR E HELD THAT THE ASSESSEE WAS ENTITLED TO THE BENEFIT OF INDEXATION WITH EFFECT FROM JANUARY 29 1993. 12. ON APPEAL BY THE REVENUE THE TRIBUNAL HELD TH E ORDER OF THE COMMISSIONER OF INCOME TAX (APPEAL) IS CORRECT AND IN ACCORDANCE WITH LAW AND THE RELEVANT PORTION OF THE TRIBUNAL'S FINDINGS READS AS FOLLOWS:- 'ACCORDING TO THE DEFINITION IN EXPLANATION (III) T O SECTION 48 THE 'INDEXED COST OF ACQUISITION' MEANS AN AMOUNT WHICH BEARS TO THE COST OF ACQUISITION THE SAME PROPORTION AS THE COST INFLATION INDEX FOR THE YEAR IN WHICH THE ASSET IS TRANSFERRED BEARS TO THE COST INFLATION INDEX FOR THE FIRST YEAR IN WHIC H THE ASSET WAS HELD BY THE ASSESSEE OR FOR THE YEAR BEGINNING ON APRIL 1 1981 WHICHEVER IS LATER. A COMBINED READING OF THE EXPRESSION 'INDEXED COST OF ACQUISITION' USED IN SECTION 48 AS DEFINED IN EXPLANATION (III) AND THE DEFINITION OF 'SHORT TERM CAPITAL ASSET' IN EXPLANATION 1(B) TO SECTION 2(42A) SHOWS THAT IMPORTANCE IS ASSIGNED TO THE PERIOD OF HOLDING OF THE CAPITAL ASSET IN AS MUCH A S EXPLANATION (III) TO SECTION 48 REFERS TO THE FIRST YEAR IN WHICH THE ASSET WAS HELD BY THE ASSESSEE WHEREAS EXPLANATION 1(B) TO SECTION 2(42A) PROVIDES FOR INCLUSION OF THE PERIOD FOR WHICH THE ASSET WAS HELD BY THE PREVIOUS OWNER IN DETERMINING THE PERIOD FOR WHICH ANY CAPITAL ASSET IS HELD BY THE ASSESSEE. HAVING REGARD TO THIS ASPECT AS WELL AS KEEPING IN VIEW THAT THE DEFINITIONS GIVEN IN SECTION 2 ARE APPLICABLE FOR T HE ENTIRE ACT THE LEGISLATIVE INTENTION BEHIND ENACTI NG PAGE 9 OF 11 ITA N OS.1113 & 1121/BANG/2009 9 THESE PROVISIONS TO TREAT THE DATE AS WELL AS COST OF ACQUISITION OF THE CAPITAL ASSET BY THE PREVIOUS OWNER TO BE THE DATE AND COST OF ACQUISITION OF THE ASSESSEE FOR THE PURPOSE OF COMPUTING CAPITAL GAINS IN TERMS OF SECTION 48 IS VERY CLEAR. THIS I S THE SCHEME OF THE ACT AS LAID OUT IN THE RELEVANT PROVISIONS AND THIS IS THE CONTEXT IN WHICH THE SAME HAS TO BE UNDERSTOOD AND APPRECIATED. GOING BY THE DESIGN OR PURPOSE WHICH LIES BEHIND THESE PROVISIONS SO AS TO PRODUCE THE DESIRED EFFEC T WHICH WAS SOUGHT TO BE ACHIEVED THE ONLY VIEW POSSIBLE FROM THE INTERPRETATION OF THE RELEVANT PROVISIONS IS THAT THE PERIOD FOR WHICH THE ASSET WAS HELD BY THE PREVIOUS OWNER IS TO BE INCLUDE IN DETERMINING THE PERIOD FOR WHICH THE ASSET WAS HELD BY THE ASSESSEE AS PROVIDED IN EXPLANATION 1(B) TO SECTION 2(42A) AND THIS POSITION IS APPLICABLE EVEN FOR WORKING OUT THE INDEXED COST OF ACQUISITION WITHIN THE MEANING OF EXPLANATION (III) TO SECTION 48. WHEN THE COST OF ACQUISITION TO THE PREVIOUS OWNER AS ON THE DATE OF ACQUISITION OF THE CAPITAL ASSET BY HIM IS TO BE ADOPTED AS THE COST OF ACQUISITION TO THE ASSESSEE EVEN FOR THE PURPOSE OF WORKING OUT THE INDEXED COST OF ACQUISITION AS PER THE MEANING GIVEN IN EXPLANATION (III) TO SECTION 48 IT IS NOT LOGICAL TO ADOPT THE COST INFLATION INDEX FOR THE YEAR IN WHICH THE CAPITAL ASSET BECAME THE PROPERTY OF THE ASSESSEE AND NOT THAT FOR THE YEAR IN WHICH THE ASSET WAS ACQUIRED BY THE PREVIOUS OWNER. FOR THE PURPOSE OF COMPUTING THE LONG TERM CAPITAL GAINS ARISING FROM THE TRANSFER OF A CAPITAL ASSET WHICH HAD BECOME PROPERTY OF THE ASSESSEE UNDER THE GIFT THE FIRST YEAR IN WHICH TH E CAPITAL ASSET WAS HELD BY THE ASSESSEE HAS TO BE DETERMINED TO WORK OUT THE INDEXED COST OF ACQUISITION AS ENVISAGED IN EXPLANATION (III) TO SECTION 48 AFTER TAKING INTO ACCOUNT THE PERIOD FOR WHICH THE SAID CAPITAL ASSET WAS HELD BY THE PAGE 10 OF 11 ITA NOS.1113 & 1121/BANG/2009 10 PREVIOUS OWNER. IN THAT VIEW OF THE MATTER THE INDEXED COST OF ACQUISITION OF SUCH CAPITAL ASSET HAS TO BE COMPUTED WITH REFERENCE TO THE YEAR IN WHICH THE PREVIOUS OWNER FIRST HELD THE ASSET. 12.1 RESPECTFULLY FOLLOWING THE DICTUM LAID DOWN B Y THE DECISION OF THE SPECIAL BENCH WE HOLD THAT THE ORD ER OF THE AUTHORITIES BELOW IS NOT CORRECT AND WE REVERSE THE SAME. 13. IN THE RESULT THE FIRST GROUND RAISED IS ALLO WED. 14. IN GROUND NO. 2ND AND 3RD MENTIONED ABOVE THE ASSESSEE IS PRAYING THAT HE OUGHT TO HAVE BEEN GRANTED EXEMP TION U/S 54EC TO THE FULL AMOUNT INVESTED NAMELY RS.75 00 000/- W HEN ASSESSING OFFICER DETERMINED CAPITAL GAINS AT RS.76 18 593/-. WE HAVE PERUSED THE ASSESSMENT ORDER AND FIND THAT THE CAPITAL GAIN S COMPUTED BY THE ASSESSING OFFICER IS AT RS.76 37 673/-. THE ASSESS EE HAD FURNISHED THE CERTIFICATE OF HOLDING WITH REFERENCE TO THE BONDS WHICH ARE ELIGIBLE FOR DEDUCTION U/S 54EC. THE ASSESSING OFFICER SHALL EX AMINE THE AMOUNT INVESTED IN THESE SPECIFIED BONDS WITH REFERENCE TO FINAL COMPUTATION OF CAPITAL GAINS AND GRANT DEDUCTION U/S 54EC TO THE E XTENT OF INVESTMENT. THERE IS NO REASONS ATTRIBUTED FOR RESTRICTING THE CLAIM OF DEDUCTION U/S 54EC TO RS.58 65 180/-. THE CLAIM OF DEDUCTION U/S 54EC WAS RESTRICTED BY THE ASSESSEE HERSELF TO RS.58 65 180 /- SINCE ACCORDING TO HER CALCULATION THE CAPITAL GAINS ASSESSABLE WAS O NLY RS.58 65 180/-. WHEN THE ASSESSING OFFICER ENHANCES THE CAPITAL GAI NS TO RS.76 37 673/- THE ASSESSING OFFICER OUGHT TO HAVE LOOKED INTO THE TOTAL INVESTMENT MADE IN THESE SPECIFIED BONDS AND OUGHT TO HAVE GRANTED FULL DEDUCTION WITH REFERENCE TO THE INVEST MENT MADE UNLESS PAGE 11 OF 11 ITA NOS.1113 & 1121/BANG/2009 11 THERE IS SOME STATUTORY RESTRICTION IF ANY PRESCRI BED. HOWEVER THIS ISSUE ARISES ONLY IN THE EVENT OUR DECISION WITH R EFERENCE TO FIRST GROUND IS OVERTURNED AT ANY LATER STAGE. WITH THES E DIRECTIONS WE DISPOSE OF GROUND NOS.2 AND 3. 15. IN THE RESULT ITA NO.1121 FILED BY THE ASSESS EE IS ALLOWED. ITA NO.1113/BANG/2009 16. THE APPEAL ARISING FROM THE MAIN ORDER OF THE CIT(A) DATED 30.4.2008 IS DISPOSED OF IN FAVOUR OF ASSESS EE. HENCE THE APPEAL ARISING FROM THE CIT(A)'S ORDER DATED 22.9.2 009 PASSED PURSUANT TO A MISCELLANEOUS PETITION FILED BY THE ASSESSEE HAS BECOME INFRUCTUOUS AND THE SAME IS DISMISSED. THE ORDER IS PRONOUNCED ON ....13TH..APRIL 2010 SD/- SD/- (DR. O K NARAYANAN) (GEORGE GEORGE K) VICE PRESIDENT JUDICIAL MEMBE R BANGALORE DTD.13/4/2010 COPY TO : 1. THE ASSESSEE 2.THE REVENUE 3. THE CI T(A) CONCERNED. 4. THE CIT CONCERNED. 5. THE DR 6. GUARD FILE. 7. GF ITAT NEW DELHI. MSP/12.4. BY ORDER ASST. REGISTRAR ITAT BANGALORE.