TaxTMI 
TaxTMI 
2021 (5) TMI 667
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....sallowance u/s.14A amounting to Rs. 19,31,965/-. 1.1. The Ld. AO erred in (& Ld. CIT(A) erred in confirming ) in not considering the fact that the assessee has huge internal accruals and interest free funds and therefore, no disallowance u/s.14A is warranted w.r.t. interest expenses. 1.2 The Ld. AO erred in (& CIT(A) ought to have netted off the interest expenditure and interest income while calculating disallowance u/s.14A. 1.3 The Ld. AO erred in (& Ld. CIT(A) ought to have excluded at least investments which have not resulted in any exempt income from the calculation of disallowance u/s.14A. 2. The Ld. AO erred in (& CIT(A) erred in confirming) disallowing deduction u/s.54EC of Rs. 50,00,000/-. ....
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....ilable with the assessee. The assessee for this proposition has placed reliance on the decision in its own case in ITA No. 65/PUN/2018 for the assessment year 2012-13. The Ld. AR therefore, claimed that it should be presumed, the assessee has made investment from its own interest free funds. 6. Per contra, the Ld. DR invited our attention at Para 5.1 of the Ld.CIT(Appeals)' order where the Ld. CIT(Appeals) has categorically held that the immediate sources of investment were out of the OD account and when the investment has been made in such manner, the presumption which the assessee claims is no longer valid. 7. We have heard the rival contentions and analyzed the facts and circumstances in this case. We have also considered the j....
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....uring the year under consideration. In view, thereof, we set aside the order of the Ld. CIT (Appeals) on this issue and remand the same back to the file of the Assessing Officer for adjudication after complying with the principles of natural justice as indicated hereinabove. 8. Thus, Ground Nos. 1, 1.1, 1.2 and 1.3 are allowed for statistical purposes. 9. The next issue in Ground Nos. 2 & 2.1 of the appeal memo pertains to disallowance u/s. 54EC of the Act. 10. The brief facts pertaining to this issue are that during the year under consideration, the assessee had sold windmill and showed an amount of Rs. 1,78,70,039/- under the head short term capital gain. The assessee claimed exemption for an amount of Rs. 1 Crore u/s.54EC of the....
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....e date of sale of asset. The said section also provides a cap on the investment to be made in the bonds to the extent of Rs. 50 lakhs on any financial year. As per the mandate of said section and the proviso there under, where the assessee makes investment of Rs. 50 lakhs in this specified bond within the time frame of six months from the date of sale in any financial year and the benefit of said section is to be allowed to the assessee. In case period of six months falls in two financial years then the question which arises for adjudication whether the assessee can claim the aforesaid deduction u/s.54EC of Act to the extent of Rs. 50 lakhs on each of the financial year totalling to Rs. 1 Crore, where investment is made in the aforesaid bon....
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....ising from transfer of one or more original assets, during the financial year in which the original asset or assets are transferred and in the subsequent financial year does not exceed Rs. 50 lakhs. The said amendment was held to be applicable from assessment year 2015-16 and subsequent assessment years. 12. Therefore, we find after this amendment Finance (No.2) Act, 2014 with effect from 01.04.2015 there is an insertion of proviso after the existing proviso to sub section (1) to section 54EC of the Act. That however prior to this, the assessee making investment of Rs. 50 lakhs in any financial year, it will have benefit of section 54EC (1) of the Act. Meaning thereby, if the assessee was able to invest sum of Rs. 50 lakhs each in two di....