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| The Tax Publishers2019 TaxPub(DT) 7994 (Del-Trib) INCOME TAX ACT, 1961
Section 54EC
As per section 54EC(1) and the first proviso, 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. Therefore, the assessee's claim of deduction under section 54EC for Rs. 1 crore in two financial years, would be allowed.
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Capital gains - Deduction under section 54EC - Allowability - Deduction for Rs. 1 crore in two financial years
Assessee sold a property and earned long-term capital gain. Against such long-term capital gain, he claimed deduction of Rs. 1 crore under section 54EC submitting that he invested the same in REC Bonds for Rs. 50 lakhs each in the month of January, 2013 and in the month of April, 2013. According to AO, in terms of provisions of section 54EC, the assessee would be entitled for investment of Rs. 50 lakhs made in financial year 2012-13 only. CIT(A) upheld the order of AO. Assessee placed reliance on various issues, wherein deduction up to Rs. 50 lakhs was allowed in two financial years. Held: As per section 54EC(1) and the first proviso, 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. Accordingly, the order of CIT(A) was set aside and AO was directed to allow deduction under section 54EC for Rs. 1 crore in two financial years as claimed by the assessee.
Followed:ACIT v. Akshay Sobti (2019) 106 taxmann.com 60 (Del-Trib.): 2019 TaxPub(DT) 3728 (Del-Trib)
REFERRED : Tulika Devi Dayal v. JCIT (2018) 89 taxmann.com 442 (Mum-trib): 2018 TaxPub(DT) 0718 (Mum-Trib) and A.C.I.T v. Ajay Kaila [ITA No. 6907/DEL/2015, dt. 21-9-2017]
FAVOUR : In assessee's favour
A.Y. :
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