2012 (9) TMI 317

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....has failed to appreciate that the Act envisages investment into specified assets out of the long term capital gains only. " 2. After hearing both the parties we find that during assessment proceedings the Assessing Officer noticed that the assessee has sold two properties on 5.4.2007 and 30.11.2007 on which long term capital gains was amounting to Rs. 22,11,079/- and Rs. 85,042/-. It was further noted that the assessee has deposited the amount of sale consideration in HDFC Bank. Out of this sum with HDFC Bank, a sum of Rs. 15.00 Lakhs was for purchase of FDR and some money was given loan to certain persons. Later on 21.9.2007 REC bonds amounting to Rs. 15.00 lakhs were purchased. This sum according to the Assessing Officer had been recei....

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....amining the submissions observed that the investment was made within stipulated period of six months and therefore, the conditions laid down in Section 54EC were complied. According to him there was no requirement that the funds should be given out of capital gains and accordingly he held that the assessee was entitled to deduction u/s 54EC of the Act. 5. Before us, the ld. DR for the revenue supported the order of Assessing Officer and on the other hand, the ld. counsel of the assessee supported the impugned order passed by the first appellate authority. 6. After considering the rival submissions we find no merit in this appeal. We have carefully perused Section 54EC and the only requirement is that investment in specified assets sho....

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....6,25,000/- and the balance of Rs. 1,87,500/- was returned to the purchaser. However, the Assessing Officer noted that since an cheque was received against sale of land, a sum of Rs. 1,87,500/- was added to the income of the assessee. 11. On appeal, the ld. CIT(A) adjudicated this issue vide para 6.3 which is as under: "As far as, the addition of Rs. 1,87,500/- is concerned both the Assessing Officer's order and appellant counsel's submissions is ambiguous on this issue. It is also noticed that the appellant has allegedly returned the sme amount back after the period of 9 months. The Assessing Officer is directed to ascertain the correct capital gain on long term capital asset as has arisen to the appellant and tax it in the light of a....