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| The Tax Publishers2020 TaxPub(DT) 4684 (Bang-Trib) INCOME TAX ACT, 1961
Section 54EC
Where the assessee made investment of one crore in specified bonds in instalments of Rs. 50 lakhs each and date of investment fell in time financial years but within six months from date of transfer then assessee was eligible for deduction under section 54EC for Rs. 1 crore as per the provision of section 54EC at that time.
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Capital gains - Exemption under section 54EC - Assessee claimed deduction of Rs. 1 crore - Investment made in two financial years
Assessee claimed exemption from capital gain arising on account of sale of shares of Rs. 1 crore under section 54EC of the Act in two instalments of Rs. 50 lakhs each within the statutory period of six months from the date of sale of shares in question. The said period of six months fell in two financial years. The AO disallowed the claim. The CIT(A) confirmed the disallowance on the ground that the maximum amount allowable as an exemption under section 54EC was only one financial year is Rs. 50 lakhs. Held: In any event, from a reading of section 54EC(1) and the first proviso, it is clear that the time limit for investment is six months from the date of transfer and even if such investment falls under two financial years, the benefit claimed by the assessee cannot be denied. It would have made a difference, if the restriction on the investment in bonds to Rs. 50,00,000 is incorporated in section 54EC(1) of the Act itself. However, the ambiguity has been removed by the legislature with effect from 1-4-2015 in relation to the assessment year 2015-16 and the subsequent years.
Followed:CIT v. Coromandel Industries Ltd. (2014) 12 TM 852, CIT v. C. Jaichander [TCA No. 419 & 533 of 2014 dated 15-9-2014] : 2014 TaxPub(DT) 4189 (Mad-HC)Vivek Jairazbhoy v. Dy. CIT (ITA No. 236/Bang/2012 dated 14-12-2012) : 2012 TaxPub(DT) 3445 (Bang-Trib) and Asstt. CIT v. Dr. Hajjaji Krishnamurthy Anand in ITA No. 1153/Bang/2014 dated 27-3-2015.
REFERRED :
FAVOUR : In favour of assessee.
A.Y. : 2013-14
IN THE ITAT, BANGALORE 'A' BENCH
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