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2016 (5) TMI 487 - AT - Income TaxExemption u/s.54EC denied - investment in REC capital gains bonds falling in two financial years - Held that:- The legislative intent in the subsequent amendment is to restrict the investment of ₹ 50,00,000/- to one financial year only. There was ambiguity and confusion on interpreting the provisions as the Commissioner of Income Tax (Appeals) examined the issue on the interpreting the word ‘’any’’ referring to dictionary meaning because there was no certainty was visualized considering the provisions, CBDT circulars and facts of the case. The Assessing Officer tried to make a distinction of provisions for restricting investment of ₹ 50,00,000/- only in one financial year. The assessee has invested in two installments falling in two financial years and availed tax exemption. Amendment of provisions of Sec.54EC in Finance Act, 2014 are prospective and apply from 01.04.2015 effective from assessment year 2015-16 onwards. We considering the facts and amendment of provisions rely on the jurisdictional High Court decision of CIT vs. C. Jaichander (2014 (11) TMI 54 - MADRAS HIGH COURT ) and CIT vs. Coramandel Industries Ltd (2014 (12) TMI 852 - MADRAS HIGH COURT ) and setaside the order of the Commissioner of Income Tax (Appeals) and direct the Assessing Officer to delete the addition and allow the grounds in favour of the assessee. Enhancement of income on investments made by the assessee’s two minor children in REC Bonds and denial of exemption u/s.54EC - Held that:- It is nobody case that father has invested in shares in the name of two minor children. The issue on the investment u/sec 54EC of the Act has been pindown on two aspects, the Commissioner of Income Tax (Appeals) has denied exemption to the minor child and second issue being whether income to be clubbed with parents ‘’total income’’ or ‘’such income’’ contested by the Revenue. We highlight the provisions of Sec. 64(1A) of the Act were income of the minor has to be computed before application of clubbing provisions. In respect of clam of exemption of capital gain, the computation has to be worked out in the hands of the minor and allow the exemption and subsequent income should be added in the hands of the father u/s.64(1A) of the Act - Decided in favour of the assessee.
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