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2017 (11) TMI 2046 - AT - Income TaxLTCG - deduction claim u/s.54EC - claim denied on the ground that the relevant capital gains had been reinvested to the tune of Rs.50lacs each in a time span of two separate assessment years, in proceedings u/s. 143(3) - assessee had disclosed long term capital gains to be arising from surrender of tenancy right as well as sale of shares in a Private Limited Company, received through gift - AO denied impugned deduction provision could not be spread over to the maximum amount limit of Rs.50 lacs each spread over in two assessment years - whether crucial expression “any financial year” meant only one financial year of reinvestment and not more than that? - HELD THAT:- It has come on record that the CIT(A) has followed the above co-ordinate bench order in concluding that assessee’s reinvestment of capital gains to the tune of Rs.50 lacs each spread over in two financial years falling within 6 months is very much allowable as deduction claim u/s.54 EC of the Act. Hon’ble Madras high court’s judgment in CIT vs. C. Jaichander [2014 (11) TMI 54 - MADRAS HIGH COURT] also adopts a similar reasoning that there is no bar as propagated at Revenue’s behest in allowing such a deduction claim. Their lordships further take into account amendment in Section 54EC (1) by insertion of second proviso w.e.f. 01.04.2015 alongwith relevant explanatory memorandum to conclude that the amendment effect restricting the deduction amount to Rs.50 lacs only in any case would apply w.e.f. 01.04.2015 in relation to assessment year 2015-16. We reiterate that we are in assessment year 2011-12 only. The Revenue fails to dispute all these developments on judicial side. We therefore find no reason to interfere with the learned CIT(A)’s order accepting assessee’s deduction claim u/s.54EC of the Act. Revenue’s appeal is accordingly dismissed.
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