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Case Law Details

Case Name : Bakhtawar Construction Co. P. Ltd. Vs Income Tax Officer - 2(1)(1) (ITAT Mumbai)
Appeal Number : MA No. 548/Mum/2011
Date of Judgement/Order : 20/06/2012
Related Assessment Year : 2006-07
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assessee contended that it is entitled to the benefit of exemption under section 54EC of the Act even while computing book profit chargeable to tax under section 115JB of the Act. Another facet of the argument, as raised in ground (b), is that the learned CIT(A) erred in holding that the decision of the Hon’ble Bombay High Court in the case of Ace Builders Pvt. Ltd. (Income Tax Appeal No. 1006 of 2000) is not applicable to the facts of the present case. As can be noticed from the aforementioned ground, it is only an extension of the main issue and it is not independent of the main issue. At the time of hearing the learned counsel fairly admitted that the decision of the Hon’ble Kerala High Court in the case of N.J. Jose & Co. P. Ltd. vs. ACIT [2010] 321 ITR 132 squarely applies to the facts of the case and there is no contrary decision of any other High Court on this issue.

In fact the Log Book of the Vice President (MZ) shows that the learned counsel fairly admitted that the issue stands covered against the assessee but it was contended that provision of section 54EC overrides section 115JB of the Act and going by the intentions of the Legislature, deposits made in NABARD are meant to benefit the assessee. Page No. 74 of the paper book (internal page No. 13 of the Ace Builders Pvt. Ltd. case) was referred to submit that section 50 carves out an exception in respect of depreciable assets and provides that where depreciation has been claimed and allowed on the asset, a different method of computation of capital gain is provided in the Act.

 The Bench, while passing the order, however, did not reproduce ground (b) and followed the decision of the Hon’ble Kerala High Court to hold that the assessee is not entitled to deduction under section 54EC of the Act while computing the book profit under section 115JB of the Act.

INCOME TAX APPELLATE TRIBUNAL

MA No. 548/Mum/2011

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