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Smt. Pritib en Gautamb hai Adani Ahmedabad Vs. DCIT, Circle-10 Ahmedabad
June, 08th 2012
                     "B" BENCH
  Before: Shri D.K. Tyagi, Judicial Member and
         Shri T.R. Meena, Accountant Member

                                  ITA No.808 of 2012
                                     A.Y. 2008-09

         Smt. Pritib en Gautamb hai Adani           DCIT, Circle-10
         Ahmedabad                            Vs.   Ahmed ab ad

         Appellant                                  Respondent

                             ITA No.809 of 2012
                                A.Y. 2008-09

         Smt. Pushp aben Vasantb hai                DCIT, Circle-10
         Ad ani                               Vs.   Ahmed ab ad

         Appellant                                  Respondent

         Department by        :       Shri B.K.S. Pandya, Sr. D.R.
         Assessee by          :       Shri Vartik R. Chokshi, A.R.

         Date of hearing              :   06.06.2012
         Date of pronouncement            06.06.2012



              These two appeals have been filed by the assessees against the

separate orders passed u/s 263 of the Act by ld. CIT dated 09.03.2012 on similar

facts.    The grounds of appeals in both the appeals are also common, so for the
I.T.A. No.808/Ahd/2012, A. Y. 2008-09 with                                             2
I.T.A. No.809/Ahd/2012, A. Y. 2008-09

sake of convenience both the appeals are being disposed of by passing a

consolidated order taking the facts in ITA No.808 of 2012.

2.             Brief facts of the case are that assessee, during the year under appeal,

sold 70,109/- shares of Advantage Retail Pvt. Ltd. on 27.12.2007 for a total

consideration of Rs.6,16,95,920/-. For taking benefit of Section 54EC of the Act,

the assessee purchased bonds issued by Rural Electrification Corporation of India

for a sum of Rs.50/- lakhs in the month of March, 2008 i.e. in the financial year

2007-08.      Thereafter the assessee further invested a sum of Rs.50/- lakhs in

National Highway Authorities of India bonds in the month of May, 2008 i.e. in the

financial year 2008-09. This investment of Rs.1 crore was deducted from the

capital gain while computing the income under the head capital gains and return of

income was filed. The return income filed by the assessee was accepted by the

A.O. vide assessment order dated 7th May, 2010 passed u/s 143(3) of the Act.

3.             Subsequently, on 12th April, 2011 the CIT, Ahmedabad-V issued a

show cause notice u/s 263 of the Act intimating that as per the proviso to Section

54EC(1), the investment made in long term specified assets during any financial

year should not exceed Rs.50 lakhs. The CIT further expressed that the assessee

claimed deduction for investment of Rs.1 crore which was allowed by the A.O. and,

therefore, the assessment order was erroneous and prejudicial to the interest of

the Revenue. Ld. CIT, accordingly, show caused the assessee to make submissions

on this issue. Detailed written submissions were filed before ld. CIT and assessee's

representative also attended before him and the factual and legal positions were

explained to him.        After taking all these into consideration ld. CIT set aside the
I.T.A. No.808/Ahd/2012, A. Y. 2008-09 with                                           3
I.T.A. No.809/Ahd/2012, A. Y. 2008-09

order dated 7th May, 2010, passed by the A.O. and directed him to reframe the

assessment order after verifying the bond certificate and after giving adequate

opportunity to the assessee of being heard.            He further directed that the

assessment order may be reframed in accordance with law.

4.             Aggrieved by this order of ld. CIT, these appeals has been filed before

us. At the time of hearing ld. counsel of the assessees' only grievance was that ld.

CIT, while directing the A.O. to reframe the assessment order in accordance with

law, has also made certain observations in his order on the issue of allowability of

deduction u/s 54EC of the Act which are contrary to the decision of Hon'ble ITAT,

Ahmedabad Bench in the case of Shri Aspi Ginwala and Shri Rustom Ginwala in

ITA No.3226 and 3227/Ahd/2011 for the assessment year 2008-09. He, therefore,

submitted that the direction of ld. CIT may kindly be modified to the extent that

the A.O. will reframe his assessment order in accordance with law ignoring the

observation made by ld. CIT on allowability of deduction u/s 54EC of the Act. Ld.

D.R. did not object to this submission of the assessee. Therefore, the direction of

ld. CIT is modified and the A.O. is directed to reframe the assessment order in

accordance with law ignoring the observation of ld. CIT on allowability of deduction

u/s 54EC of the Act.

5.             In the result, the assessees' appeals are allowed.

      Order pronounced in open Court on 06.06.2012

               Sd/-                                                 Sd/-
        (T.R. Meena)                                          (D.K. Tyagi)
     Accountant Member                                      Judicial Member
I.T.A. No.808/Ahd/2012, A. Y. 2008-09 with                          4
I.T.A. No.809/Ahd/2012, A. Y. 2008-09

                                             True copy
N.K. Chaudhary, Sr. P.S.
     / Copy of Order Forwarded to:-
1.  / Appellant
2.  / Respondent
3.    / Concerned CIT
4.  -  / CIT (A)
5.  ,   ,  / DR, ITAT, Ahmedabad
6. [  / Guard file.
                                                         By order/  ,

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