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2017 (9) TMI 1513 - AT - Income TaxEntitlement for deduction of claim under section 54EC - investment made in prescribed bonds though in different financial years i.e. immediately succeeding financial year - Held that:- Assessee is entitled to deduction where he makes investment of ₹ 50 lakhs in specified assets within a period of six months in one financial year. The issue then crops up is in case said period of six months falls within two financial years, whether the assessee can claim deduction under section 54EC to the extent of ₹ 50 lakhs in each financial year totalling to ₹ 1 crore. This issue had come up for consideration before the hon'ble Madras High Court in the case of C. Jaichander (2014 (11) TMI 54 - MADRAS HIGH COURT) and CIT v. Coromandel Indus tries Ltd. [2014 (12) TMI 852 - MADRAS HIGH COURT] wherein the hon'ble Madras High Court has laid down that the exemption granted under proviso to section 54EC(1) should be construed not transaction-wise but financial year-wise. Consequently, the assessee is entitled to exemption of ₹ 50 lakhs in each financial year aggregating to ₹ 1 crore. In this connection, it is worth mentioning that the Legislature, by the Finance (No. 2) Act, 2014 with effect from April 1, 2015 has inserted second proviso to sub-section (1) of section 54EC to remove the above ambiguity in the said provision so that the exemption is limited to ₹ 50 lakhs on account of investment in the specified bonds out of the long-term capital gains from the transfer of one or more assets during the financial year. - Decided against revenue
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