TaxTMI 
TaxTMI 
2019 (5) TMI 1641
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....nfined to disallowance of assessee's claim of exemption under section 54EC of the Income-tax Act, 1961 (for short "the Act") for an amount of Rs. 50 lakh. 3. Brief facts are, the assessee, a company, filed its return of income for the impugned assessment year on 31st March 2009, declaring total income of Rs. 25,16,545, after claiming deduction under section 54EC of the Act. During the assessment proceedings, the Assessing Officer, to verify assessee's claim of exemption under section 54EC of the Act, called for necessary details from the assessee. From the details furnished, he found that in the previous year relevant to the assessment year under dispute, more precisely, on 19th December 2006 the assessee had transferred a capital ass....
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....pect of balance amount of Rs. 50 lakh. Being aggrieved with the aforesaid disallowance, the assessee preferred appeal before the first appellate authority. 4. After considering the submissions of the assessee learned Commissioner (Appeals) observed, the assessee was not able to establish that the delay in investing the balance amount of Rs. 50 lakh was due to non-availability of REC Bonds in the market. Therefore, he sustained the disallowance made by the Assessing Officer. 5. Reiterating the stand taken before the Departmental Authorities learned Authorised Representative submitted, the assessee could not deposit the entire amount of Rs. 1 crore in REC Bonds on 31st March 2007, since the maximum investment to be made by a person in R....
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....um amount one could invest as per the condition imposed was Rs. 50 lakh. She submitted, even though the investments were made in two financial years, but the assessee still can claim exemption under section 54EC of the Act as per the provisions applicable to the impugned assessment year. In support of her contention learned Authorised Representative relied upon the following decisions:- i) CIT v/s Celloplast, [2012] 253 CTR 246 (Bom.); ii) Aspi Ginwala v/s ACIT, ITA no.3226/Ahd./2011, dated 30.03.2012; and iii) Vivek Jairaz Bhoy v/s DCIT, ITA no.236/Bang./2012, dated 14.12.2012. 6. The learned Departmental Representative strongly relied upon the observations of learned Commissioner (Appeals). 7. We have cons....
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....ot furnish any valid reason why it could not make the investment of Rs. 1 crore when the Bonds were available for investment up to the period of 31st March 2007. Undisputedly, the capital asset was transferred by the assessee on 19th December 2006. So, the assessee was required to invest in REC Bonds within the period of six months from the date of transfer i.e., by 18th June 2007. While the assessee invested an amount of Rs. 50 lakh on 31st March 2007, the balance amount of Rs. 50 lakh was invested by the assessee on 1st August 2007. The explanation of the assessee for not investing the second amount of Rs. 50 lakh on/or before 31st March 2007 is, as per the conditions imposed at the time of issuance of REC Bonds Series-VIA, available betw....
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....eriod was due to non-availability of bonds in the market. This view of ours is supported by the decision of the Hon'ble Jurisdictional High Court in case of CIT Vs. Celloplast (supra). Therefore, the delay in investment has to be condoned as the assessee cannot be expected to do or perform an impossible act. 8. Insofar as the issue whether the claim of deduction under section 54EC of the Act is available if the investments are spread over two financial years, we are of the considered opinion that there was no bar in section 54EC of the Act for allowing deduction in respect of investment made in two financial years. The provision as contained in section 54EC r/w its proviso would make it clear that the cap is with regard to the ....