ITO WD 21(2)(2), MUMBAI vs. SANJIVA SHETTY, MUMBAI

Order u/s.254(1)of the Income-tax Act,1961(Act) लेखा लेखा सद�य लेखा लेखा सद�य सद�य राजे�� सद�य राजे�� राजे�� केकेकेके अनुसार राजे�� अनुसार अनुसार PER RAJENDRA, AM- अनुसार Challenging the order dt.5/11/2012 of CIT(A)-32,the Assessing Officer(AO)has filed the present appeal. 2.The only ground of appeal deals with deduction under section 54EC of the Act amounting to Rs.30.00 lacs.During the assessment proceedings,the AO found that the assessee had transferred a capital asset on 22.6.2006 on which capital gain of 42.96 lacs was worked out, that the assessee had claimed deduction of Rs.30.00 lacs against the long term capital Gains (LTCG,that he had claimed to have made investment of Rs.30.00 lacs in REC Bonds, that the bonds were purchased on 31.7.2007.The AO held that the asset was transferred on 22. 12. 2006,that the period of six months for availing the deduction u/s. 54EC expired on 22.6.2007, that the assessee had made investment on 31.7.2007, that the assessee had claimed that the scheme for eligible bonds was closed w.e.f. 31.3.2007 and later on it was again opened w.e.f. 2.7.2007, that he had issue cheque dt.15.6.2007, that the cheque was issued before the expiry of six months to the agent who invested in the bonds in the month of July.However, the AO did not agree with the contention of the assessee and held that investment u/s.54EC was beyond the time limit, accordingly he denied the deduction to the assessee. 3.Aggrieved by the order of the AO the assessee preferred an appeal before the First Appellate Authority(FAA).Besides the argument advanced before the AO,the assessee stated that the CBDT had issued a circular,that his case was covered by the Circular, that the scheme was not open on 22.6.2007.After considering the submission of the assessee and the assessment order,the FAA held that the scheme for making investment in the eligible bonds u/s.54EC was open from 22.1.2007 to 31.3.2007 only,that on the last day of expiry of limitation on 22.06.2007 there was no scheme open for subscription,that as soon as subscrip - tion opened on 02.07.2007 the assessee invested in the bonds, hat the bonds were allotted to him on 31.07.2007,that the assessee could not be held in default for violation of conditions of section 54EC,that scheme re-opened on 2.7.2007,that the assessee had issue the cheque dt.15.6.2007, that the CBDT had extended the applicability of the scheme to those earlier cases where Long Term Assets were transferred between 29.9.2005 to 30.9.2006.He referred

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