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II. Direct Tax Case laws:
1. Alkaben B. Patel Vs. ITO, ITA No. 1973/Ahd/2012, Date of Pronouncement: 25.03.2014, ITAT- Ahmedabad
Section 54EC of the Income Tax Act, 1961
Whether
for the purpose of Section 54EC, the period of investment of six months
should be reckoned after the date of transfer or from the end of the
month in which transfer of capital asset took place.
Held: “within a month” means” before the end of the calendar month.
To claim deduction u/s 54EC the assessee has to invest at
any time within a period of six months after the date of such transfer,
the whole or any part of capital gains in the long-term specified
asset. In the present case the
subtle question is that whether the word “month” refers in this section
a period of 30 days or it refers to the months only i.e. the intention
of the legislator was to compute six calendar months or to compute 180
days.
Held that in
the absence of any definition of the word ‘month’ in the Act, the
definition of Section 3 of General Clauses Act 1897 shall be applicable
under which the word “month” means a month reckoned according to British
calendar and after scrutinizing other Sections of the Act, it is
evident that on some occasion the Legislature had not used the terms
“Month” but used the number of days to prescribe a specific period. For
example in Section 254(2A) First Proviso it is prescribed that the
Tribunal may pass an order granting stay but for a period not exceeding
one hundred and eighty days. This is an important distinction made in
this statute while subscribing the limitation/ period. Further, once the
purpose of the introduction of the section was served by making the
investment in the specified assets then that purpose has to be kept in
mind while granting incentive.
Referred: Munnalal Shri Kishan Mainpuri, 167 ITR 415, Tamal Lahiri Vs. Kumar P. N. Tagore, 1978 AIR 1811/1979 SCC (1) 75.
2. M/s Crompton Greaves Limited Vs. DCIT, ITA No. 1110 of 2012, Date of Pronouncement: 25.03.2014, High Court of Bombay
Whether
loss on writing-off the irrecoverable advances in accordance of scheme
of amalgamation, is a capital loss and eligible to be carried forward
for set off in subsequent years.
Held: No
Brief
facts, the assessee company contending that the Inter-Corporate
deposits (ICDs) are capital assets as
defined in Section 2(14) of the Act. Where right to recover the amount
was extinguished by the order of the Court, there is a capital loss
which required to be carried forward for set off in subsequent years.
However, no such material was placed on record to show that the advances
were in the nature of ICDs. The revenue contending that in order to be
eligible to carry forward of the capital loss, there should be a capital
asset as defined u/s 2(14) and the same should be transferred in the
manner as defined in section 2(47) of the Act. Since, the deposits or
advances given to the parties which was written-off latter in the scheme
of amalgamation, were neither a capital assets nor there was any
transfer, thus no capital loss is allowed to be carried forward to the
subsequent year. Thus held that irrecoverable advances written-off are
not a transfer and the loss cannot be claimed as capital loss.
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