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2015 (4) TMI 758 - AT - Income TaxRevision of assessment order - Denial of exemption under Section 54EC - Prospective amendment in Section 54EC w.e.f. 01-4-2015 - Held that:- Section 54EC has been amended by the Finance Act, 2014 w.e.f. 01-4-2015 to provide that the Investment made by an assessee in the long-term specified asset, from capital gains arising 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 fifty lakh rupees. Also explanatory memorandum to Finance Bill, 2014 explains that the wordings of the proviso have created an ambiguity. As a result the capital gains arising during the year after the month of September were invested in the specified asset in such a manner so as to split the investment in two years i.e., one within the year and second in the next year but before the expiry of six months. This resulted in the claim for relief of one crore rupees as against the intended limit for relief of fifty lakh rupees. It can be seen from the above statutory amendment and the explanatory memorandum to Finance (No.2) Bill, 2014 that the legislature has accepted the ambiguity in the language of the proviso, but has amended the law with prospective effect i.e., from A.Y. 2015-16. It is therefore clear that for AY prior to AY 2015-16, on interpretation of the provisions it is possible for an Assessee claim deduction of ₹ 1 Crore by investing ₹ 50 lacs in each of the financial years, but within 6 months from the date of transfer. In the given circumstances, it cannot be said that the view entertained by the AO was not a possible view. In the circumstances, the jurisdiction u/s.263 of the Act could not have been exercised by the CIT. - Decided in favour of assessee.
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