2012 (6) TMI 711

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....AO in the disallowance of exemption claimed u/s 545EC of Rs. 50,00,000/- with respect to investment made in REC Bonds on the ground that the such investment was made 8.1/2 months prior to date of transfer of the property subjected to capital gains. The impugned rejection of the deduction claimed is devoid of the principles relating to the grant of exemption u/s. 54EC and hence it is prayed that the claim as made by the appellant may kindly be granted.       2.  The Ld. Commissioner of Income Tax (A)-II, Baroda has erred in law and in facts in not appreciating the fact that the provisions of sec. 54EC are for granting exemptions and benefits to the assessee and, therefore, ought to be construed accordingly co....

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....      "(ii) Pandian Chemicals Ltd. v. CIT 262 ITR 278(SC): Rules of interpretation would come into play only if there is any doubt with regard to the express language used in the provision. Where the words are unequivocal, there is no scope for importing the rule of liberal interpretation of an incentive provision.      (iii) CIT v M.C. Budharaja & Co. 204 ITR 412 (SC): Liberal interpretation of an incentive provision should not do violence to plain language. The object of an enactment should be gathered from a reasonable interpretation of the language used therein.      (iv) IPCA Laboratories v. DCIT 266 ITR 521, 529(SC): Any interpretation has to be as per wording ....

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....rrect and is upheld.      4. In the result, the appeal is dismissed." 4. Now the assessee is before us and contended that Section 54 and 54EC are having similar nature and object of giving exemption us 54EC to boost the investment in bonds. In Section 54 the exemption is available even investment made before one year of sale transaction, which should be read with reference to exemption availed u/s 54EC. He also relied various decisions which are summarized as under:- 1 CIT v. J.R. Subramanya Bhat [1987] 165 ITR 571/[1986] 28 Taxman 578 (Kar.) Claim u/s. 54 - Sale of building in February 1977 -Construction of new building commenced in 1976 and completed in March 1977. Since the new building has been constru....

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....epted.   CIT v. Shahzada Nand & Sons [1966] 60 ITR 392 (SC)   CIT v. Naga Hills Tea Co. Ltd. [1973] 89 ITR 236 (SC)   Smt. Saroj Aggarwal v. CIT [1985] 156 ITR 497/23 Taxman 76 (SC)   CIT v. J.H. Gotla [1989] 156 ITR 323/23 Taxman 14J (SC) (c) CIT v. Canara Workshops (P.) Ltd. [1986] 161 ITR 320/27 Taxman 262 (SC) While interpreting the provisions, full effect is required to be given to the legislative intention of encouraging assesses.   ITO v. H.P. Vishweswaraiah [2001] 250 ITR 863/122 Taxman 60 (Kar.)   S. Gopal Reddy v. CIT [1990] 181 ITR 378 (AP)   CIT v. Smt. Roda Mistry [1998] 231 ITR 12/100 Taxman 54 (AP) (d) Motor Industries Co. Ltd. v. Unio....