TaxTMI 
TaxTMI 
2019 (12) TMI 79
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....e craves the leave to this Hon'ble Court to add, deleted and modify any or all the clauses of Grounds of appeal. 2. Briefly stated facts of the case are that the assessee filed return of income on 21.09.2013, declaring total income of Rs. 1,51,77,310/-. The case of the assessee was selected for scrutiny and statutory notices were issued and complied with. The Assessing Officer observed that during the year under consideration, the assessee has sold a property and worked out long term capital gain to the tune of Rs. 1,93,16,309/-. Against the long term capital gain computed, the assessee claimed deduction of Rs. 1 crores under section 54EC of the Income-tax Act, 1961 (in short 'the Act'). In support of the claim, the assessee submitted that he invested in REC Bonds for Rs. 50 lakhs each in the month of January, 2013 and in the month of April, 2013. According to the Assessing Officer, in terms of provisions of Section 54EC of the Act, the assessee was entitled for the investment of Rs. 50 lakhs made in the financial year 2012-13 only. According to the Assessing Officer, the assessee has abused provisions of the law, which in clear terms limit the investments under Section 54....
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....and, appellant is claiming deduction u/s, 54EC to the extent of Rs. 1 crore relying on the judicial pronouncement of the Hon'ble Madras High Ccjh in the case of CIT, Chennai (2015) 53 Taxmann.com 466 (Mad.) vs. C. Jai Cander and reliance has also been placed on the decision of Pune Bench of TAT in the case ITO, Ward - 2(4), Nasik vs. Bala R Venkitachalam and claimed that since investment of Rs. 50 lacs each has been made in two different financial .ears, the quantum of eligible exemption is Rs. 1 crore. 4.1.1 In the above factual matrix of the case, it is pertinent to reproduce the provisions of section 54EC and proviso appended to the above section: "(1) Where the capital gain arises from the transfer of a longterm capital asset (the capital asset so transferred being hereafter in this section referred to as the original asset) and the assessee has, at any time within a period of six months after the date of such transfer, invested the whole or any part of capital gains in the long-term specified asset, the capital gain shall be dealt with in accordance with the following provisions of this section, that is to say,- (a) if the cost of the long-term s....
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....rgaon, Haryana for an amount of Rs. 4,10,00,000/- on 10.01.2013. From this fact, it is clear that the date of transfer of original asset is 10.01.2013 and as per provisions of Section 54EC assessee was eligible to invest the capital gain arises on the above long term capital asset within a period of six months after the date of such transfer. But misinterpreting the above provisions of the Act, assessee claimed deduction by spreading the claim in two periods i.e. in the month of January, 2013 and in the month of April, 2013. 4 1.3 As per plain reading of provisions of Section 54EC, it is evident that capital gain shall be exempt u/s 54EC only to the extent it is invested in the long term specified asset within a period of six months from the date of such transfer. As per the above provisions of the Act, appellant cannot be allowed the benefit of exemption under this section in respect of investment made of Rs. 50 lakh each on the ground that such investment falls in two different financial years. Simple reading of provisions of above section makes it clear that there is no provision for making investment in two different financial years. From the provisions of abo....
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....mann.com 27 has rightly held that as per Section 54EC investment within six months is investment for that particular financial year in which transfer has taken place and said period of six months would not include some part of subsequent financial year. 4 1.8 Thus keeping in view, the facts and circumstances of the case as narrated by the AO duly supported with various judicial pronouncements of the Hon'ble Apex Court on the interpretation of law, I am of the considered view that assessee is eligible for claim of exemption as per provisions of Section 54EC(1) only to the extent of Rs. 50 lakh and investment of Rs. 50 lakh claimed in subsequent financial year does not qualify for the above exemption. Hence, the addition of Rs. 50 lakh made by the AO is upheld and ground of appeal taken by the appellant is dismissed. 3. Before us, the learned counsel for the assessee filed a paperbook containing pages 1 to 93 and submitted that identical issued of investment in specified bonds of Rs. 50 lakhs in the month of March of the financial year and Rs. 50 lakhs in the month of April of the next financial year has been allowed as deduction in following cases by the Tribunal: ....
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....s of Section 54EC investment made in specified assets at any time within six months from the transfer of the original asset is entitled for deduction but the proviso to the section has restricted the investment during any financial year up to Rs. 50 lakhs only. Identical issue in dispute has been decided by the Tribunal in the case of ACIT Vs. Akshay Sobti (supra). The relevant portion is reproduced as under: "6.1 As regards ground no. 2 which relates to disallowance of deduction u/s.54EC to the extent of Rs. 50,00,000/- is concerned, we find that the AO had restricted the deduction claimed u/s.54EC to Rs. 50,00,000/- as against the deduction claimed by the appellant amounting to Rs. 1,00,00,000/- following the decision of the Honorable Income tax Appellate Tribunal, Jaipur Bench in the case of Shri Raj Kumar Jain & Sons IIUF {supra). However, the assessee submitted that the Assessing Officer has strangely and obliquely stopped short of making observation/mention of the very recent Judgment of Honorable High Court of Madras dated December 16, 2014 in case of CIT v. Coromandal Industries Ltd. [2015] 56 taxmann.com 209/230 Taxman 548/370 ITR 586 (Mag.) placed before him for ....