DIPTI N. MODI,MUMBAI vs. ITO WD 8(1)(3), MUMBAI

The learned Commissioner of Income Tax (Appeals) erred in confirming the action of the Assessing Officer in granting exemption u/s. 54EC at Rs. 50 lakhs as against claimed by the appellant at Rs. 60,25,296/-. 3. The assessee is a Director of M/s. Exim Multimedia Pvt. Ltd. The assessee is an individual and shows income from Salary, House Property, business and other sources. During the year under consideration, the assessee has sold units of Prudential ICICI Services, DSPML World Gold, AIG World Gold Fund and the immovable property situated at Unit No.10/11, Ratnajyot Industrial Estate, Irla Lane, Vile Parle West, Bombay and another property at Shreeji Avenue Baroda. Against, the said transactions the assessee has shown an amount of Rs.60,25,296/- as Long Term Capital Gain and claimed deduction u/s 54EC of the Income Tax Act, 1961( in short “the Act”) in respect of investments made in specified capital gain bond (RS.12,40,000/- on 15.04.2010, Rs.45,30,000/- on 29.03.2010 and Rs.4,70,000/- on 15.10.2009). The assessing officer restricted the said claim to Rs.50.00 lakhs. Since the Notification No.380 of 2006 dated 22.12.2006 issued by Central Government prescribe a monetary limit of Rs.50.00 lakhs in a F.Y.. Therefore, the assessee filed the appeal before learned CIT(A) and learned CIT(A) also rejected the contentions of the assessee. Aggrieved by the order, the assessee has filed the present appeal before the Tribunal.

We have heard the arguments advanced by the learned representative of the parties and have gone through the case files carefully. The sole controversy is that the Long Term Capital Gain to the tune of Rs.60,25,296/- is exempted u/s. 54EC of the Act or not. The assessee has made investment to the tune of Rs.50 lakhs during the year ending 31.03.2010 and invested an amount of Rs.12,40,000/- in the succeeding financial year. There is no dispute that the entire investments were A.Y. 2010-11 made within the specified period of six months. Now it is to be seen whether the claim of the assessee is justifiable in view of the provision contained in section 54EC of Act or not. The identical question has come before Income Tax Appellate Tribunal, Mumbai in a case titled as Mrs. Lilavati M. Sayani Vs. Income Tax Officer cited as (2014) 49 taxmann.com 579. Further, the matter of controversy again came before Hon’ble High Court of Madras in a case titled as Commissioner of Income Tax, Chennai Vs. C. Jaichander cited as (2015)53 taxmann.com 466. In the said law it is specifically held that:

In view of the law settled in case of Commissioner of Income Tax, Chennai Vs. C. Jaichander cited as (2015)53 taxmann.com 466 and by following the judgement of co-ordinate bench of Mumbai cited above, we are of the view that the order in question is not liable to be sustainable in the eyes of law therefore the order of learned CIT(A) is hereby ordered to be set aside and the appeal is restored to file of Assessing Officer to allow the exemption u/s. 54EC of Rs.60,25,296/- and pass the order accordingly.

In the result, the appeal of the assessee is hereby allowed.