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2020 (11) TMI 314 - AT - Income TaxDisallowance of the claim u/s 54EC - permissible investment in a particular financial year - a sum of ₹ 50 lacs each was invested during F.Ys 2012-13 and 2013-14 respectively and as per first proviso of Section 54EC maximum amount allowable as an exemption under Section 54EC is only one financial year is ₹ 50 lacs - Whether the first proviso to Section 54EC(1) of the Act would restrict the benefit of investment of capital gains in bonds to that financial year during which the property was sold or it applies to any financial year during the six months period? - HELD THAT:- An identical issue came up for consideration before the Hon'ble Madras High Court in the case of CIT Vs. Coromandel Industries Ltd. [2014 (12) TMI 852 - MADRAS HIGH COURT] rom a reading of Section 54EC(1) and the first proviso, it is clear that the time limit for investment is six months from the date of transfer and even if such investment falls under two financial years, the benefit claimed by the assessee cannot be denied. It would have made a difference, if the restriction on the investment in bonds to ₹ 50,00,000/- is incorporated in Section 54EC(1) of the Act itself. However, the ambiguity has been removed by the legislature with effect from 1.4.2015 in relation to the assessment year 2015-16 and the subsequent years Tribunal rightly held that the exemption granted under proviso to Section 54EC(1) of the Act should be construed not transaction-wise, but financial year-wise - if an assessee is able to invest a sum of ₹ 50,00,000/- each in two different financial years, within a period of six months from the date of transfer of the capital asset, it cannot be said to be inadmissible - Decided in favour of assessee.
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