TaxTMI 
TaxTMI 
2014 (12) TMI 852
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....hether the Tribunal was right in relying upon the decision of Sriram Indubal v. ITO in I.T.A.No.1950/Mds/2012, especially when there is an appeal pending before the High Court which has been preferred by the appellant? (ii)Whether the Tribunal ought to have noted that the intention of the legislature is to limit the investment in the long term specified asset to Rs. 50 Lakhs as held in the case of Areva T&D India Ltd. v. Assistant Commissioner, 326 ITR 540, which had been relied upon by the Assessing Officer and the Commissioner of Income Tax (Appeals)? 2.1. The brief facts of the case are as under: The assessee company is engaged in the business of manufacturing engineering components and offering engineering consultancy. The a....
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....d by the Assessing Officer. 2.4. Calling into question the said order, the assessee preferred appeal to the Tribunal. The Tribunal held that the exemption granted under proviso to Section 54EC(1) of the Act should be construed not transaction-wise, but financial year-wise. It further held that if an assessee is able to invest a sum of Rs. 50,00,000/- each in two different financial years, within a period of six months from the date of transfer of the capital asset, it cannot be said to be inadmissible. Accordingly, the Tribunal allowed the appeal filed by the assessee. 2.5. Assailing the said order passed by the Tribunal, the Revenue has filed this appeal on the questions of law referred supra. 3. We have heard Mr.T.Ravi Kumar, lea....
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.... the long-term specified asset is not less than the capital gain arising from the transfer of the original asset, the whole of such capital gain shall not be charged under section 45 ; (b) if the cost of the long-term specified asset is less than the capital gain arising from the transfer of the original asset, so much of the capital gain as bears to the whole of the capital gain the same proportion as the cost of acquisition of the long-term specified asset bears to the whole of the capital gain, shall not be charged under section 45. Provided that the investment made on or after the 1st day of April, 2007 in the long-term specified asset by an assessee during any financial year does not exceed fifty lakh rupees.' ....
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.... Notes on Clauses Finance Bill 2014 and the Memorandum explaining the provisions in the Finance (No.2) Bill, 2014, which read as under: "Notes on Clauses Finance Bill 2014: Clause 23 of the Bill seeks to amend section 54EC of the Income-tax Act relating to capital gain not to be charged on investment in certain bonds. The existing provisions contained in sub-section (1) of section 54EC provide that where capital gain arises from the transfer of a long-term capital asset and the assessee has within a period of six months invested the whole or part of capital gains in the long-term specified asset, the proportionate capital gains so invested in the long-term specified asset out of total capital gain s....
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....e created an ambiguity. As a result the capital gains arising during the year after the month of September were invested in the specified asset in such a manner so as to split the investment in two years i.e., one within the year and second in the next year but before the expiry of six months. This resulted in the claim for relief of one crore rupees as against the intended limit for relief of fifty lakhs rupees. Accordingly, it is proposed to insert a proviso in sub-section (1) so as to provide that the investment made by an assessee in the long-term specified asset, out of capital gains arising from transfer of one or more original asset, during the financial year in which the original asset or assets are transferred and in the s....