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2017 (9) TMI 377 - AT - Income TaxClaim u/s 54EC - making investment in RECL Bonds of ₹ 50,00,000/- each in 2 financial years - investment of ₹ 50 lakhs each were made in the month of March 2013 and May, 2013 falling within the stipulated period of six months but in two different financial years - AO disallowed the deduction under section 5 EC by making an investment cannot exceed ₹ 50 lakhs in the assessment year Held that:- From the provisions of Sec. 54EC we noted that the limit of ₹ 50,00,000/- as given under the proviso is per person per financial year. The plain reading of the section as well as the proviso clearly suggests the same interpretation. There is no ambiguity in the interpretation. Had there been an intention of the legislature to restrict the exemption to ₹ 50,00,000/-, the legislature would have provided the embargo in this regard. Making of the investment is a condition for availing of the exemption. Condition for availing of the exemption requires that the investment can be made within a period of 6 months. If 6 months falls within a different financial year, as has happened in this case, in our opinion, this Tribunal cannot add the embargo that the assessee cannot make the investment to avail of the exemption under Section 54EC in the different financial year if he had already made the investment in the financial year in which the capital asset is transferred. In our opinion, the language of Section 54EC is clear and unambiguous and it leads to the interpretation that the assessee can make the investment in two different financial years provided in a financial year the investment made did not exceed ₹ 50,00,000/-. Also gone through the circular no. 3/2008 dtd. 12.3.2008 issued by the CBDT being an explanatory note on the provisions relating to direct taxes in Finance Act, 2007 , it is apparent that the Government only intended to restrict the investment in a particular financial year and accordingly has fixed the limit of ₹ 50,00,000/- as permissible limit in a particular financial year. The Government did not intend to restrict the maximum amount of exemption permissible under Section 54EC. Legislature in our opinion has consciously used the words “in a financial year” in the proviso to Sec. 54EC of the Act. If the legislature wanted to restrict the exemption itself to ₹ 50,00,000/-, it could have have simply dispensed with using the words ‘in a financial year’. CIT(A) has rightly deleted the addition made by the Assessing Officer. CIT(A) has rightly deleted the addition - Decided against revenue.
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