COMMISSIONER OF INCOEM TAX vs. VIJAY KUMAR NEMA

ITA/8/2015HC Madhya PradeshMPHC02003950201506 April 20152 pages

AI SummaryDismissed

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 April 1, 2007. This proviso clearly states the limit for investment in long-term specified assets for claiming deduction. The High Court found no substantial question of law arising from the ITAT's order. Therefore, the appeal filed by the revenue was dismissed.

What were the facts?

The Revenue has filed an appeal against the order of 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 all assessees under Section 54-EC of the Income Tax Act, 1961. The appeal concerns the interpretation and application of the proviso inserted to Section 54-EC(1) by the Finance Act No. 22 of 2007, which came into effect from April 1, 2007. This proviso limits the investment in long-term specified assets to fifty lakh rupees per financial year for claiming deduction.

What were the issues?

1. Whether the learned Tribunal has rightly allowed deduction to the assessee up to the permissible limit as provided under Section 54-EC(1) of the Income Tax Act, 1961, considering the proviso inserted by the Finance Act, 2007. Assessee's Contention: The assessee relied on the proviso to Section 54-EC(1) of the Income Tax Act, 1961, which came into force from April 1, 2007. This proviso stipulates that if the investment in long-term specified assets by an assessee during any financial year does not exceed fifty lakh rupees, then the assessee is entitled to a deduction up to fifty lakh rupees. The assessee also cited the Madras High Court's decisions in Commissioner of Income Tax v. C. Jaichander and Commissioner of Income Tax v. Coromandel Industries Limited.

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.08/2015 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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