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2013 (11) TMI 576 - HC - Income TaxExemption u/s 54EC - eligibility of capital gain from sale of depreciable assets being taxable as short term capital gain u/s 50 – overriding provisions – Held that:- Reliance has been placed on the judgment of Hon’ble Gauhati High Court in the case of CIT v. Assam Petroleum Industries (P.) Ltd. Reported in [2003 (6) TMI 23 - GAUHATI High Court] and Bombay High Court in the case of CIT v. ACE Builders (P.) Ltd. reported in [2005 (3) TMI 36 - BOMBAY High Court]. In the above judgments it was hold that capital gain arising of long term capital asset, if invested in specified asset, the assessee is not to be charged capital gains and exemption provided under Section 54EC of the Act cannot be denied to the assessee only on account of the fact that deeming fiction is created under Section 50 of the Act. In other words, legal fiction created under Section 50 of the Act is though restricted to computation of capital gains, such deeming fiction cannot restrict application of Section 54EC which allows exemption of capital gains, if assessee makes investment in the specified assets. Thus, the assessee cannot be charged to capital gains when short term gains of long terms capital assets get invested in the areas specified under the law – Decided against the Revenue.
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