TaxTMI 
TaxTMI 
2013 (11) TMI 518
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.... 5. Reliance is placed on the decision of ITAT Jaipur Bench vide ITA No. 648/JP/2011 for A.Y. 2008-09, dated 31-01-2012 in the case of ACIT, Circle-2, Ajmer Vs Shri Raj Kumar Jain & Sons (HUF) which upheld the order of Assessing Officer and held that the ld. CIT(A) was not justified in allowing deduction to the assessee to the extent of Rs. 1 crore u/s. 54EC of the Act." 2. The only issue involved in this appeal filed by the Revenue relates to the allowing of relief under Section 54EC. The brief facts of the case are that the Assessee filed its return of income on 29.9.2008 declaring income of Rs.24,00,118/- in which the assessee claimed deduction under Section 54EC amounting to Rs. 50,00,000/-. Assessment was completed on 30.12.2010 at an income of Rs. 7400118/-. The Assessing Officer during the course of assessment noted that the assessee has sold capital asset and computed Capital Gains at Rs.1,16,83,128/-. The Assessee claimed the exemption of the Capital Gains amounting to Rs. 1,00,00,000/- by making the following investments in Capital Gains Bonds under Section 54EC : (a) REC Bonds of Rs.50,00,000/- on 31.3.2008 (b) REC Bon....
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....Bonds was allowed by the AO as it was within the time limit of six months prescribed in section 54EC of the Act, while the investment in NHAI Bonds which was made only on 26-05-2008 was not allowed as according to the lower authorities the assessee is only entitled for exemption u/s 54EC upto Rs. 50 lakhs only. The assessee's case, however, is that as per the proviso to section 54EC, investment made on or after 1st April, 2007 in the Long Term Specified Asset by an assessee during any financial year should not exceed Rs. 50 lakhs. The assessee's case is that since the property was sold on 22-10-2007 he could have invested in eligible investment within six months i.e. on or before 21-04-2008 in order to avail exemption u/s 54EC of the Act. There is no dispute about Rs. 50 lakhs invested on 31-12-2007 in REC Bonds. The dispute is only about further investment of Rs. 50 lakhs in NHAI Bonds made on 26-05-2008. Since six months in this case involves two financial years, the assessee's case is that if he had deposited another Rs. 50 lakhs from 1st April, 2008 to 21-04-2008, he was entitled for exemption u/s 54EC of the Act. As during this period from 01-04-2008 to 26-05-2008 subscription....
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....ied. In view of above, it is hereby held that the assessee is entitled for exemption of Rs. 1 crore as six months' period for investment in eligible investments involved is two financial years. 9. Now, coming to the second aspect of the matter, whether investment of Rs. 50 lakhs made in NHAI Bonds on 26-05-2008 can be considered to be made within six months period as per the proviso to sec. 54EC, we find that the assessee was to make investment in such Bonds between 01-04-2008 to 21-04-2008. There is no dispute about the fact that subscription of eligible Bonds was closed during this period till 26-05-2008 and on the 1st day of the reopening of the subscription, the assessee made this investment. Under the circumstances, we are of the considered opinion that the assessee was prevented by sufficient cause which was beyond his control in making investment in these Bonds within the time prescribed. We further find that various judicial authorities have taken a view that exemption should be granted in such cases where there is a delay in making investment due to non-availability of the bonds and have held that it is a reasonable cause and the exemption should ....
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....54EC we noted that the limit of Rs. 50,00,000/- as given under the proviso is per person per financial year. The plain reading of the section as well as the proviso clearly suggests the same interpretation. There is no ambiguity in the interpretation. Had there been an intention of the legislature to restrict the exemption to Rs.50,00,000/-, the legislature would have provided the embargo in this regard. Restriction relates only to the investment made in any financial year by the assessee. Making of the investment is a condition for availing of the exemption. Condition for availing of the exemption requires that the investment can be made within a period of 6 months. If 6 months falls within a different financial year, as has happened in this case, in our opinion, this Tribunal cannot add the embargo that the assessee cannot make the investment to avail of the exemption under Section 54EC in the different financial year if he had already made the investment in the financial year in which the capital asset is transferred. In our opinion, the language of Section 54EC is clear and unambiguous and it leads to the interpretation that the assessee can make the investment in two different....