COMMISSIONER OF INCOME TAX Vs. AKBAR ALI DHALA

JUDGEMENT

(1.) The appeal has been filed by the Revenue challenging the order of the Income Tax Appellate Tribunal 'B' Bench, Chennai, dated 25.6.2013 made in ITA No.1693/Mds/2012 for the assessment year 2007-2008, by raising the following substantial questions of law:

(2.) 1. The brief facts of the case are as under: The respondent/assessee sold his property on 22.11.2006 and invested the same in Rural Electrification Corporation Bonds (for brevity, "REC Bonds") on 2.7.2007, well beyond the period of six months stipulated in Section 54EC of the Income Tax Act, 1961 (for brevity, "the Act"). Therefore, the Department took the plea that the assessee was ineligible for the capital gains exemption under Section 54EC of the Act. The stand of the assessee is that REC Bonds were not available between 1.4.2007 and 21.5.2007 (on which date the six months period expires) and, therefore, he could not invest within six months as stipulated in Section 54EC of the Act and that should not be put against the assessee to disallow the capital gains exemption under Section 54EC of the Act. However, the Assessing Officer declined to grant capital gains exemption under Section 54EC of the Act.

(3.) The main plank of the argument of the learned Senior Standing Counsel appearing for the appellant is that the assessee could have invested in REC Bonds during the period from 22.11.2006 to 31.3.2007, during which period REC Bonds were available, and inasmuch as the assessee failed to invest in REC Bonds when the same were available, he cannot claim capital gains exemption under Section 54EC of the Act.