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2019 (3) TMI 1358 - HC - Income TaxBenefit of deduction u/s 54EC - availability of requisite funds to invest within six months of the transfer to claim the benefit under section 54EC - as per revenue since the assessee had made investment in REC bond on 6.8.2010, i.e. after a period of six months from the date of transfer of the shares irrespective of when the whole or part of sale consideration was actually received, the assessee was not entitled to deduction under Section 54EC - whether amount was deposited in the Escrow Account as a security in respect of future liabilities of the company/ transferor? - Tribunal deleted the addition and held that admittedly the amount was deposited in the Escrow Account - HELD THAT:- Both the transferrer and the transferee had common rights over the said amount as the said amount was deposited in the Escrow Account as a security in respect of future liabilities of the company/ transferor. There was no certainty about the quantum of amount likely to be received by transferor or transferee out of the said amount deposited in Escrow Account. - Since, there was no certainty of the time of release of the said amount or the part of the amount to either of the parties as dispute between the parties had occurred and the litigation was going on, it cannot be said that the assessee had got a vested right to receive the amount in question. It was only at the end of the litigation that the rights and liabilities of the transferor and transferee were ascertained and thereupon the share of the assessee was passed on to the assessee for which the assessee offered capital gains in the immediate assessment year 2010-11. Further, the Tribunal had held the assessee entitled to the benefit of deduction under Section 54EC of the Act as the amount was invested by him in the Rural Electrification Corporation Ltd. bonds in the year of receipt which was also the year of taxability of the capital gains so received. No error could be pointed out by learned counsel for the revenue in the findings recorded by the Tribunal warranting interference by this Court. Further, referring to the judgment of the Apex Court in Sanjeev Lal and another v. Commissioner of Income Tax and another (2014 (7) TMI 99 - SUPREME COURT), relied upon by the learned counsel for the revenue, in view of the factual matrix noticed hereinbefore, suffice it to observe that the said pronouncement being based on its own facts does not advance the case of the revenue. - Decided against revenue
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