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2016 (6) TMI 1081 - AT - Income TaxEntitlement to cost of inflation index - inheritance of property - cost of inflation index from the year of inheritance of property and not from the date it was held by the previous owner - Held that:- The assessee inherited the property on 04.08.2010. The said property was purchased by the assessee’s father before 1981. After the death of the assessee’s father, the property was inherited to the assessee along with other co-owners. Accordingly, the cost of indexation to be applied as on 1.4.1981, after fixing the value of the asset as on 1.4.1981 and it cannot be said that the assessee acquired property under dispute only on 04.08.2010 on the death of the assessee’s father so as to compute the capital gains. In other words, capital gains has to be assessed as long term capital gains by fixing the cost of asset as on 1.4.1981 and thereafter applying the cost of inflation index in terms of sec.49(1)(iii)(a) of the Act. It needless to say that same view was taken in the case of CIT Vs. Manjula J.Shah reported in (2011 (10) TMI 406 - BOMBAY HIGH COURT ) Decided in favour of assessee. Allowability of deduction u/s.54EC - Held that:- The issue is squarely covered by the judgement of jurisdictional High Court in the case of CIT Vs. C.Jaichander reported in [2014 (11) TMI 54 - MADRAS HIGH COURT ] wherein it was held that legislature by Finance (No.2) Act, 2014, with effect from 01.04.2015, inserted after existing proviso to sub-section(1) of Section 54EC second proviso, as per which investment made by an assessee in long term specified asset, out of capital gains arising from transfer of one or more original asset, during financial year in which original asset or assets are transferred and in subsequent financial year does not exceed fifty lakhs rupees. In this case, the assessee invested in REC Capital gains tax saving bonds on 31.01.2012 at ₹ 50/- lakhs, and on 31.05.2012 at ₹ 50/- lakhs. In view of jurisdictional High Court cited above, we are inclined to hold that the claim of assessee wherein the assessee has invested ₹ 50/- lakhs within six months of date of sale, but in two different financial years, is entitled for deduction u/s.54EC of the Act.- Decided in favour of assessee.
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