Crucible Trading Co. P.Ltd, Mumbai vs Department Of Income Tax

आयकर अपीलीय अिधकरण, अिधकरण मुंबई IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES 'C' MUMBAI सव ौी आय.पी. बंसल, याियक सदःय एवं चंि पुजार , लेखा सदःय के सम BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI CHANDRA POOJARI , ACCOUNTANT MEMBER

ITA NO.5994/MUM/2013 (A.Y. 2010-11)

Dy. Commissioner of Income Tax M/s. Crucible Trading Co. (OSD), Range 8(1), Pvt.Ltd., Room No.260A, 2nd Floor, Vs. C-1, Udyog Sadan No.3, Aaykar Bhavan, MK Road, MIDC, Andheri (E), Mumbai 400 093. Mumbai 400 093. (Appellant ) PAN: AAACC8883E (Respondent)

Appellant by : Shri Neil Philip. Respondent by : Dr. K. Shivram & Shri Rahul Hakani

Date of hearing : 25/02/2015 Date of pronouncement : 25/02/2015

ORDER

PER I.P.BANSAL, J.M:

This is an appeal filed by the Revenue and it is directed against order passed by Ld. CIT(A)-16, Mumbai dated 31/07/2013 for assessment year 2010-11. The grounds of appeal read as under:

" 1. "On the facts and in the circumstances of the case and in law, the Ld.CIT(A) erred in allowing exemption u/s 54EC of IT Act on investment of Rs.50,00,000/- made by the assessee in the NHAI Ltd. bonds without appreciating the fact that the investment was made beyond the period of six months from the date of transfer of the shares of Sacham Electronics Ltd. on which the assessee had earned long capital gains."

2 ITA NO.5994/MUM/2013 (A.Y. 2010-11) 2. "On the facts and in the circumstances of the case and in law, the Ld.CIT(A) erred in allowing exemption u/s54EC of IT Act on investment of Rs.50,00,000/- made by the assessee in the NHAI Ltd. bonds on 30/09/2010 without appreciating the fact that the investment was made beyond the period of six months from 05/03/2010, being the date of transfer of the shares of Sacham Electronics Ltd. on which the assessee had earned long capital gains."

3. "On the facts and in the circumstances of the case and in law, the Ld.CIT(A) erred in relying on the decision of Hon'ble ITAT, Mumbai, in the case of Yahya E. Dhariwala Vs. DCIT-15(2), Mumbai, in ITA No.5501/Mum/2009, ignoring the fact that in the case of Yahya E. Dhariwala, the Department has filed appeal u/s.260A, being ITXAL/689/2012, against the decision of the Hon'ble ITAT."

2. On the long term capital gain of Rs.2,42,13,924/- on account of sale of shares, the assessee claimed deduction of Rs.50.00 lacs under section 54EC of the Income Tax Act,1961 (the Act), for specified long term capital asset, which was allotted to the assessee vide allotment advice dated 26/10/2010, bearing deemed date of allotment as 30/9/2010, issued by National Highway Authority of India Ltd, New Delhi. The gain arises to the assessee was on 5/3/2010. Therefore, AO observed that the investment made by the assessee was after lapse of a period of six months from the date of transfer of the original asset and, thus, deduction under section 54EC was denied to the assessee. The disallowance was agitated in an appeal filed before Ld. CIT(A). It was submitted that the period of six months should have been counted from the end of the month and if the same is counted from the end of the month, then investment made by the assessee was within a period of six months and assessee is entitled to get the impugned exemption. For supporting such contention reliance was also placed on various judicial pronouncements which includes the decision of ITAT, Mumbai in the case of 3 ITA NO.5994/MUM/2013 (A.Y. 2010-11)

Yahya E. Dhariwala vs. DCIT in ITA No.5501/Mum/2009 order dated 25/11/2011, Ld.CIT(A) has accepted such contention of the assessee and granted the relief to the assessee. The Revenue is aggrieved, hence, has raised aforementioned grounds.

3. Ld. DR relied upon the assessment order passed by the Assessing Officer and pleaded that Ld. CIT(A) has committed an error in granting relief to the assessee.

4. On the other hand, Dr. K.Shivram, Ld. Sr. Counsel for the assessee submitted that Ld. CIT(A) has rightly allowed the claim of the assessee and the claim of the assessee is not only supported by the decision relied upon by Ld. CIT(A) but is also in accordance with the latest decision of Special Bench in the case of Alkaben B. Patel vs. ITO, 148 ITD 31(Ahd) (SB). Ld. Sr. Counsel also placed reliance on the decision of Mumbai Tribunal in the case of Aquatech Engineers vs. Add. CIT (2013) 36 CCH 167(Mum) (Trib) .

5. We have heard both the parties and their contentions have carefully been considered. In the aforementioned decision of Special Bench "6 months" have been interpreted and it is held that the same would mean 6 calendar months and not 180 days. The observations of the Special Bench are as under:

5.6 In certain other context few Hon'ble High Courts have also taken a view that a month is to be reckoned according "british calendar". We have noted that in the case of CIT v. SLM Manekial Industries Ltd. [20051 274 ITR 485/[2007] 158 Taxman 30 (Guj.), the Hon'ble Jurisdictional High Court has opined that the issue of interpretation of the term "month" is no longer res integra because in the case of CIT v. Kadri Mills (Coimbatore Ltd.), 106 ITR 846 (Mad.') it was laid down that the month to be reckoned according to British calendar. The issue before the Hon'ble Court was that whether the 4 ITA NO.5994/MUM/2013 (A.Y. 2010-11)

Tribunal was right in law and on facts in canceling the penalty levied u/s.

271(l)(a), observing that month meant calendar month and not the lunar month of 28 or 30 days. This issue was dealt at some length by Hon'ble Madras High Court in the case of Kadri Mill (Caimbatore) Ltd. (supra). In this case, the observation of the Hon'ble Court was that IT Act, 1961 itself does not define the word "month" however Section 3 of General Clauses Act, 1987 define the word "month" means a month reckoned according to British calendar. In this context a decision of Hon'ble Calcutta High pronounced in the case of CIT v. Brijlal Lohia & Mahabir Prasad Khemka [1980] 124 ITR 485/ [1981] 5 Taxman 93 has also been generally cited wherein it was held that the words "however considering month during which the default continued" as appeared in Section 271(l)(a) refer only to a month during the whole of which the default continued and not to a month during which only part of which default continued. Likewise in the case of Harnand Rai Rarnanand v. CJT[1986] 159 1TR988/24Taxman 571 (Raj.), and B.V.Aswathaiah & Bros. v.ITO[1985] 155 ITR 422/[1986] 27 Taxrnan 560 (Kar) it was held that a month is a British calendar month.

5.1 Similar view is supported by the other decision relied upon by Ld. Sr. Counsel. No contrary decision has been brought to our notice by Ld. DR. In this view of the situation, after hearing both the parties, we find no infirmity in the relief granted by Ld. CIT(A). We decline to interfere and the order passed by Ld. CIT(A) is upheld.

6. In the result, the appeal filed by the Revenue is dismissed.

Order pronounced in the open court on 25/02/2015 आदे श क" घोषणा खुले यायालय म& 'दनांकः 25/02/2015 को क" गई ।

Sd/- Sd/- (चंि पुजार /CHANDRA POOJARI ) (आय.पी. बंसल / I.P. BANSAL) लेखा सदःय /ACCOUNTANT MEMBER याियक सदःय / JUDICIAL EMBER मुंबई Mumbai; 'दनांक Dated 25/02/2015 5 ITA NO.5994/MUM/2013 (A.Y. 2010-11)

आदे श क" ूितिल.प अमे.षत/Copy षत of the Order forwarded to : 1. अपीलाथ1 / The Appellant 2. ू2यथ1 / The Respondent. 3. आयकर आयु3(अपील) / The CIT(A)- 4. आयकर आयु3 / CIT 5. .वभागीय ूितिनिध, आयकर अपीलीय अिधकरण, मुंबई / DR, ITAT, Mumbai 6. गाड फाईल / Guard file.

आदे शानुसार/ ार BY ORDER, स2या.पत ूित //True Copy//

उप/सहायक उप सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलीय अिधकरण, अिधकरण मुंबई / ITAT, Mumbai व.िन.स./Vm, Sr. PS