Commissioner Of Income Tax vs. Subhash Chandra Nema
What did the High Court hold?
The Tribunal held that the learned Tribunal had rightly allowed the deduction to the assessee up to the permissible limit as provided under the law. The reasoning was based on the proviso to Section 54-EC(1) of the Income Tax Act, 1961, which became effective from 01.04.2007. This proviso stipulates that if an assessee invests in long-term specified assets on or after April 1, 2007, during any financial year, the deduction is capped at fifty lakh rupees. The High Court referred to decisions of the Madras High Court in Commissioner of Income Tax v. C. Jaichander and Commissioner of Income Tax v. Coromandel Industries Limited. The High Court concluded that no substantial question of law arose from the ITAT's order. The appeal filed by the Revenue was dismissed.
What were the facts?
The Revenue has filed an appeal against an order passed by the Income Tax Appellate Tribunal (ITAT), Indore Bench. The ITAT had set aside the order of the Commissioner of Income Tax (Appeals) and allowed the assessee's appeal. The ITAT directed the Assessing Officer to allow deduction to the assessee under Section 54-EC of the Income Tax Act, 1961. The appeal is for the assessment year(s) not explicitly stated but pertains to the period after the insertion of a proviso to Section 54-EC(1) by the Finance Act No. 22 of 2007, effective from 01.04.2007.
What were the issues?
1. Whether the learned Tribunal has rightly allowed deduction to the assessee under Section 54-EC of the Income Tax Act, 1961, in light of the proviso inserted by the Finance Act No. 22 of 2007, effective from 01.04.2007? Assessee's Contention: The assessee, through their counsel, argued that the proviso to Section 54-EC(1) of the Income Tax Act, 1961, which came into force on 01.04.2007, limits the deduction to fifty lakh rupees if investment in long-term specified assets is made during any financial year on or after that date. Revenue's Contention: The judgment does not record any specific arguments made by the Revenue. However, the filing of the appeal by the Revenue suggests disagreement with the ITAT's decision.
Which sections of the Income-tax Act were involved?
Section 54-EC
AI-generated summary — verify with the full judgment below
Income Tax Appeal No.06/2015 06.04.2015
Shri R.L. Jain, learned Senior Counsel with Ms. Veena Mandlik, advocate for the appellant.
Heard on the question of admission.
By the impugned order, learned Income Tax Appellate Tribunal, Indore Bench has set aside the order of the Commissioner of Income Tax (Appeals) and allowed the appeal of the assessee by directing the Assessing Officer to allow deduction to all the assessees under Section 54-EC of the Income Tax Act, 1961.
Learned Senior Counsel for the appellant has submitted that by Finance Act No.22 of 2007 proviso to Section 54-EC (1) of the Income Tax Act, 1961 was inserted, which came into force with effect from 01.04.2007.
As per the proviso, if investment is made on or after the 1st day of April, 2007 in the long term specified asset by an assessee during any financial year does not exceed fifty lakh rupees, then he is entitled for deduction up to fifty lakh rupees.
The Madras High Court also considered the aforesaid question in the case of Commissioner of Income Tax v. C. Jaichander reported in 2014 (11) TMI 54 and in the case of Commissioner of Income Tax v. Coromandel Industries Limited reported in 2014 (12) TMI 852.
Thus, in view of the aforesaid and as per the proviso to Section 54-EC (1) of the Income Tax Act, 1961, which came into force with effect from 01.04.2007, we are of the view that the learned Tribunal has rightly allowed deduction to the assessee up to the permissible limit, as provided under the law. No substantial question of law is arising in this appeal filed by the revenue.
Income Tax Appeal has no merit and is accordingly dismissed.
(P.K. Jaiswal)
(Alok Verma) Judge
Judge Pithawe RC
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