TMI Blog2006 (12) TMI 94X X X X Extracts X X X X X X X X Extracts X X X X ..... onds in terms of section 54EC of the Act, then such income otherwise taxable as gains from the transfer of an asset is exempted from tax in terms of section 54EC of the Act. Section 54EC of the Act reads as under: "54EC. Capital gain not to be charged on investment in certain bonds.- (1) Where the capital gain arises from the transfer of a long-term 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es any loan or advance on the security of such specified asset, he shall be deemed to have converted (otherwise than by transfer) such specified asset into money on the date on which such loan or advance is taken. (3) Where the cost of the long-term specified asset has been taken into account for the purposes of clause (a) or clause (b) of sub-section (1), a deduction from the amount of income-tax with reference to such cost shall not be allowed under section 88. Explanation.- For the purposes of this section,- (a) 'cost', in relation to any long-term specified asset, means the amount invested in such specified asset out of capital gains received or accruing as a result of the transfer of the original asset; (b) 'long-term specified ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sue, though the financial year would end only by March 31, 2007; that in spite of transfer of certain assets effected on April 26, 2006, the petitioner finds no way of effecting investments in terms of the provisions of section 54EC for the purpose of claiming benefit and therefore, is aggrieved by issue of annexures A-1 and A-2 notification, which has drastically reduced the scope for such investment and has approached this court seeking for issue of a writ of mandamus. The submission of Sri K.P. Kumar, learned senior counsel appearing for the petitioner, is that whereas the provisions of section 54EC itself do not impose any limit or restriction on the scope of such investments, since the notification confines the eligible investment to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 1 to 4 have made it impossible for the petitioner to invest in the requisite bonds; 6. Issue a writ of prohibition to respondent No. 5 ordering and directing him not to levy income-tax on the capital gain or not to deny the benefit of exemption under section 54EC only by reason of the fact that the petitioner is unable to invest in the bonds on account of respondent No. 1 not lifting the ceiling on investment imposed on respondents Nos. 2 and 3. The notification at annexures A-1 and A-2, while no doubt is one, which indicates that investment in such an issue also enables an assessee under the instructions to claim benefit of section 54EC primarily is not one for the purpose of section 54EC as can be seen. But is a notification for the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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