By C. N. Vaze, Shailesh Kamdar, Chartered Accountants
fiogf49gjkf0d
New Page 2
5 (2008) 300 ITR (AT) 410 (Delhi)
ITO v. Smt. Saraswati Ramanathan
A.Y. : 2004-05. Dated : 19-7-2007
S. 54EC — Exemption is allowable even though investment of
gains in specified bonds is done in joint names.
Facts :
The assessee invested proceeds of sale of shares in Rural
Electrification Bonds. The investment was in joint names of herself and her son.
The son did not contribute anything to the investment. The AO denied the
exemption, on the ground that the investment was made in joint names which was
not permitted by the Section. On appeal, the CIT(A) held that there is no such
requirement in the section. Investment in joint names is just a matter of
convenience and hence allowed the exemption. On departmental appeal, the ITAT
dismissed the appeal of the Department and allowed the exemption on the
following grounds :
1. There is no such requirement in the Section that the
investment should be in the name of the assessee.
2. The main object of investment in such corporations is
the development of infrastructure.
3. Once the investment is made in these corporations for
infrastructural development, it would hardly matter whether the investment is
made by the assessee exclusively or in the joint names of the assessee and
somebody else.
4. In the above case, the name of the son was included for
convenience in future since the assessee was 69 years old. Further, the son
also did not contribute anything to the investment.
5. The ITAT also relied on the decision of ITAT, Mumbai
Bench in the case of Joint CIT v. Smt. Armeda K. Bhaya, (2005) 95 ITD
313 wherein the exemption u/s.54 was allowed even though the assessee
purchased the flat in the names of himself, his father and mother.
Cases referred to :
(i) CGT v. N. S. Getti Chettiar, (1971) 82 ITR 599
(SC) (para 4)
(ii) CIT (Joint) v. Armeda K. Bhaya (Smt.), (2005)
95 ITD 313 (Mumbai) (para 5)
(iii) R. B. Jodha Mal Kuthiala v. CIT, (1971) 82 ITR 570 (SC) (para
4)
