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TMI Blog2015 (2) TMI 624X X X X Extracts X X X X X X X X Extracts X X X X ..... se are that during the year under consideration, the assessee had sold his property in January 2009 and had made investment in the Rural Electrification Corporation (REC) Bonds and claimed the deduction of Rs. 1 Crore from capital gains u/s 54EC of the I.T. Act, 1961. It was noticed by the Assessing Officer (hereinafter referred to as the AO) that the investment in the REC Bonds was made in two installments. The first investment of Rs. 50,00,000/- in the REC Bonds was made on 31.3.2009 and therafter of another Rs. 50,00,000/- on 30.4.2009. The assessee had thus claimed exemption of Rs. 1 Crore. The Assessee claimed that he had invested the funds within 6 months and therefore was entitled for exemption under Section 54EC. The AO noted that a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 54EC of the Act, while the investment in NHAI Bonds which was made only on 26-05-2008 was not allowed as according to the lower authorities the assessee is only entitled for exemption u/s 54EC upto Rs. 50 lakhs only. The assessee's case, however, is that as per the proviso to section 54EC, investment made on or after 1st April, 2007 in the Long Term Specified Asset by an assessee during any financial year should not exceed Rs. 50 lakhs. The assessee's case is that since the property was sold on 22-10-2007 he could have invested in eligible investment within six months i.e. on or before 21-4-2008 in order in avail exemption u/s 54EC of the Act. There is no dispute about Rs. 50 Lakhs invested on 31-12-2007 in REC Bonds. The dispute i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the long term specified asset by an assessee during any financial year does not exceed fifty lakh rupee]" It is clear from this proviso that where assessee transfers his capital asset after 30th September of the financial year he gets an opportunity to make an investment of Rs. 50 lakhs each in two different financial years and is able to claim exemption upto Rs. 1 Crore u/s 54EC of the Act. Since the language of the proviso is clear and unambiguous, we have no hesitation in holding that the assessee is entitled to get exemption upto Rs. 1 Crore in this case. This view of ours gets support from the following finding of the Hon'ble Supreme Court in the case of IPCA Laboratory Ltd. V. Dy.CIT [2004] 266 ITR 521/135 Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scribed. We further find that various judicial authorities have taken a view that exemption should be granted in such cases where there is a delay in making investment due to non- availability of the bonds and have held that it is a reasonable cause and the exemption should be granted. In the case of Ram Aganval v. Jt. CIT [2002] 81 ITD 163 (Mum.), it has been held as under: "In regard to claim of exemption under section 54F we may mention that it is found by the learned CIT(A) that the bank was closed on 31-8-1995 on account of strike as certified by the officials of the concerned bank from the certification given by the (Asst. Year 2008-09) bank officials, the assessee had approached the bank of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... April, 2008 to 26-05-2008. 10. In the result, both the appeals are allowed." 6. This view has been further affirmed by the Panaji Bench of the Tribunal in the case of "Ms Rania Faleiro" [2013] 33 Taxmann.com 611 (Panaji tribunal) wherein the Tribunal while interpreting the provisions of section 54EC has observed that the language of Section 54EC is clear and unambiguous and it leads to the interpretation that the assessee can make the investment in two different financial years provided in a financial year the investment made did not exceed Rs. 50,00,000/-. Respectfully following the above referred decision of the co-ordinate benches, this issue is accordingly decided in favour of the assessee. 7. Ground No.3 is regard ..... X X X X Extracts X X X X X X X X Extracts X X X X
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