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2017 (12) TMI 1327 - AT - Income TaxClaim of deduction under section 54EC - Held that:- The amendment by the Finance (No.2) Act, 2014 w.e.f. 01.04.2015 by which proviso has been inserted after the proviso to section 54EC(1) of the Act is to be applied prospectively from assessment year 2015-16 onwards. Accordingly, the year under appeal being assessment year 2012-13, the assessee is entitled to claim the deduction under section 54EC of the Act at ₹ 1 crore i.e. on account of investment made in the financial year in which the asset was sold at ₹ 50 lakhs and further deduction of ₹ 50 lakhs which was made in the subsequent financial year, though within period of six months from the date of sale of asset. Accordingly, we allow the claim of assessee and direct the Assessing Officer to allow the deduction under section 54EC of the Act at ₹ 1 crore. The ground of appeal raised by the assessee is thus, allowed. Clubbing of income - Computation of income in the hands of minor children on sale of beneficial shares, wherein the children had purchased REC Bonds and claimed the deduction under section 54EC - - Held that:- While computing the income of minor child, first the income has to be computed in the hands of said child i.e. income less deduction allowable under the Act and the balance is to be then, added to the income of father. In the present case, the minor child against its income from long term capital gains had claimed the deduction under section 54EC of the Act on account of investments in specified assets, which has to be allowed in the hands of said minor child and the balance income is to be added in the hands of parent. There is no merit in the stand of Revenue authorities that where the parent has already claimed the deduction under section 54EC of the Act at ₹ 50 lakhs, then the minor child is not entitled to any deduction under section 54EC of the Act. The said deduction which is claimed by the minor child is on footing of the minor child being an individual in whose hands the income has to be computed first i.e. after allowing deduction permissible under the Act and the balance only is to be added in the hands of parent under section 64(1) of the Act. Accordingly, we hold so. The ground of appeal No.2 raised by the assessee is thus, allowed.
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