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2015 (7) TMI 645 - AT - Income TaxEligibility for exemption u/s. 54EC - CIT(A) allowed claim - according to AO the sale proceeds of the capital asset were not invested in REC/NHB Bonds and what was invested was only loan taken from the partnership firm, M/s. Tallam Textiles, the claim of exemption u/s. 54EC was not to be allowed - Held that:- The evidence filed by the assessee before the CIT(A), in our view, clearly demonstrates that there was no loan taken by the assessee from M/s. Tallam Textiles. It was a case where assessee deposited the sale proceeds in his capital account (current account) and withdrew monies therefrom and made investments in the Bonds. Therefore, there was no question of denying exemption to the assessee u/s. 54EC on the premise that assessee took a loan from Tallam Textiles and made investments in the Bonds and not out of sale proceeds received on sale of capital asset. Even assuming that the assessee had taken loan and made investments in REC Bonds, that cannot be a bar to claim exemption u/s. 54EC of the Act. In our view, the decision of the Mumbai Bench of the Tribunal in Bombay Housing Corporation (2001 (2) TMI 1020 - ITAT MUMBAI) clearly supports the claim of the assessee in this regard - Decided in favour of assessee.
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