TaxTMI 
TaxTMI 
2024 (7) TMI 437
X X X X Extracts X X X X
X X X X Extracts X X X X
....r dated 21.02.2014, determining total income at Rs. 28,53,050/-. Latter the assessment was revised u/s. 263 of the Act on the grounds that the assessee has claimed deduction u/s. 54EC of the Act amounting to Rs. 1.5 crore on account of investment in REC bonds against long-term capital gains of Rs. 804.42 lakh from the sale of 3 pieces of land which are as follows: Sr No Land Sale dated Sale value L.T.C.G Date of Investment Amt. Of Investment 1. Agri Land at Sr No. 500, 502, 502/2 12/10/2010 8,01,33,055 7,99,31,951 31/03/2010 50,00,000 2. Agri Land at No 8 Block 24/06/2010 3,63,900 3,26,421 21/07/2010 5,00,000 3. Agri. Land at No. 6 Block 24/06/2010 2,07,400 1,83,327 08/04/2011 50,00,000 3. The said claim was allowed by the AO. On scrutiny of the assessment order it was revealed that the REC bonds for Rs. 50 lakh was purchased on 31.03.2010 which preceded the date of transfer of any of the three properties. On the date of purchase of another REC bonds of the Rs. 50 lakh on 21.07.2010, capital gain of Rs. 5.10 lakh only was available as against LTCG deduction. To be eligible for deduction u/s. 54EC....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Year 4.2 In order to remove any ambiguity it would be appropriate to refer to the 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 Clausers-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 appellant 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 shall not be charged to tax. The proviso to the said sub-section provides that the investment made in the long-term specified asset during any financial year shall not exceed fifty lakh rupees. It is proposed to insert a proviso below first proviso in said sub-section (1) so as to provide that the investment made by an appellant in the long-term specified asset, from capi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....oviso but only w.e.f. 01/04/2015 and subsequent years and not retrospectively. I find support from decisions rendered by various courts of law including the jurisdictional court as cited by the appellant, wherein interalia, the above position of law as prevailing prior to A.Y.2015-16 has been accepted. In the decision of the Hon'ble ITAT, Ahmedabad Bench in the case of Aspi Ginwala, Shree Ram Engg & Mfg. Industries us. ACIT (2012) 52 SOT 16/20 taxmann.com 75 (Ahd.) on identical facts, it is held as under: The appellant sold property on 22.10.2007 and computed long-term capital gains. The section 54EC investment was required to be made within 6 months ie. on or before 21.04.2008. The appellant invested Rs. 50 lakhs in REC bonds on 31.12.2007 (F.Y. 2007-08, within the 6 M time limit) and Rs. 50 lakhs in NHAI bonds on 26.5.2008 (F.Y. 2008-08, beyond the 6 M time limit) and claimed a deduction of Rs. 1 crore. The appellant claimed that no eligible scheme was available for subscription from 1.4.2008 to 28.5.2008 and that he applied in the NHAI bonds as soon as it opened and that he was prevented by sufficient cause from investing within the time period of 6 months. The Asse....
X X X X Extracts X X X X
X X X X Extracts X X X X
....o to Section 54EC w.e.f. 01/04/2015 applicable to A.Y.2015-16 and subsequent years, the time limit for investment is six months from the date of transfer and even if such investment falls under two financial years, the benefit claimed by the appellant amounting to Rs. 1 crore cannot be denied and the addition as made by the AO is not justified. There are two properties/two banakhat and two investments as per details below. The Assessing Officer is of the opinion that the investment dated 31- 3-2010 has been made before the sale deed dated 11-10-2010. Survey No. Amount Rs Investment u/s. 54EC Date Investment Amount Rs. Reference/Banakhat dated 502/2 2,32,56,773 REC Bonds 31-03-2010 50,00,000 08-04-2011 498 & 500 5,68,76,282 REC Bonds 08-03-2010 50,00,000 11-10-2010 8,01,33,055 However, the appellant was in receipt of Rs. 70 lakhs before the date of investment on 31-3-2010 ie Rs. 35 lakhs on 8-3-2010 and another Rs 35 lakhs on 25-3-2010. Therefore, there is misreading of facts by the Assessing Officer and the appellant is eligible to get benefit of investment o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ereby dismissed. 7. Now coming to the ITA No.949/Ahd/2023, appeal filed by the assessee and Grounds of appeal are as follows: "...The learned CIT(A) has erred in restricting the deduction upto Rs. 50,00,000 and confirming the addition of Rs. 44,90,000 under Section 54EC in as much as the assessee had received advances amount of more than Rs. 44,90,000 prior to investment of Rs. 50,00,000 on 21-07-2010 and therefore the same is also eligible for deduction under Section 54EC..." 8. The registry has noted that there is a delay of 1654 days in filing the above appeal by the assessee. The condonation of delay affidavit filed by the assessee reads as follows: 1. Rajendra Harjivandas Prajapati, aged about 61 years residing at 25, Nandigram Society, Nr. Railway Crossing, Nr. Vedhshala, Naranpura, Ahmedabad 380013 do hereby solemnly affirm as under I had received CIT(A) Order for A.Y. 2011-2012 under Section 143(3) read with Section 263 dated 05-03-2019 on 20-03-2019 The CIT(A) had partly allowed the appeal and the Department has filed an appeal to Hon ble ITAT against the relief granted by CITIA) by ITA No. 822/Ahd/2019 This appeal is pending befor....