Chanchal Kumar Sircar vs. ITO (ITAT Kolkota)

DATE: (Date of pronouncement)
DATE: March 8, 2012 (Date of publication)

Click here to download the judgement (chanchal_sirkar_54EC_time_limit_investment.pdf)

S. 54EC investment time limit begins from date of receipt of consideration

The assessee entered into an agreement and handed over possession to the buyer which constituted a “transfer”. The consideration received from the buyer was invested by the assessee in s. 54EC Bonds beyond 6 months from the date of transfer though within 6 months from the date of receipt of the consideration. The Tribunal had to consider whether in view of the language of s. 54EC that the consideration had to be invested in the specified bonds within 6 months of the date of transfer, the relief could be allowed. HELD by the Tribunal:

In a case where the consideration for the transfer was received several months after the date of transfer, the period of 6 months for making deposit u/s 54EC should be reckoned from the date of actual receipt of the consideration. If the period is reckoned from the date of agreement and receipt of part payment at the first instance, it would lead to an impossible situation by asking assessee to invest money in specified asset before actual receipt of the same. Also, s. 54EC requires the “consideration” to be invested. If the consideration is not received, there is no question of investing it (S. Gopal Reddy 181 ITR 378 (AP), Janardhan Dass 299 ITR 210 (All) Darapaneni Chenna Krishnayya 291 ITR 98 (AP) (compulsory acquisition cases) followed).

See the contra view in Jyotindra H. Shodhan vs. ITO 87 ITD 312 (Ahd)(SB)

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