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TMI Blog2015 (9) TMI 1226X X X X Extracts X X X X X X X X Extracts X X X X ..... se are that during the course of assessment proceedings, the AO observed that the assessee has earned long term capital gain of Rs. 1,99,12,143/- on which it has claimed deduction u/s. 54EC of Rs. 1,00,00,000/- since the assessee has made investments in REC Bonds. The AO, asked the assessee to furnish complete details and evidence for REC Bond and deduction claimed. In response to the same, the assessee filed proof of REC Bonds amounting to Rs. 50,00,000/-. In respect of claim of deduction of Rs. 1,00,00,000/-, it has filed copies of judgment in support of their claim u/s. 54EC for investment upto Rs. 1,00,00,000/- in different financial year. On perusal of the details, the AO noticed that the assessee has purchased one investment REC Bond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the CIT(A) deleted the addition/disallowance after observing as under :- 2.3 I have carefully, considered the facts of the case, contention of the Assessing Officer and material on record and the, arguments of the appellant. I find that the only dispute in this case is regarding the disallowance of exemption claimed by the appellant u/s. 54EC of the Act. The Assessing Officer was of the view that if the capital asset itself is sold in the financial year relevant to assessment year under consideration and there is no, income left out for claim of deduction u/s. 54EC then the claim of the appellant is thus restricted ,to Rs. 50 lakhs and no further claim can be allowed for deduction when there is nil income in hands of the appellant in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s an opportunity to make an investment of R. 50 lakhs each in two different financial year and is able to claim exemption upto Rs. 1 crore u/s 54EC. Since the wording of the proviso to section 54EC is clear, the benefits which are available to' the assessee cannot be denied. In view of above, assessee in instant case was entitled for exemption of Rs. 1 crore as six months period for investment in eligible investments involved was two financial years. In view of the foregoing, since the appellant had made, investment in the REC bond within a period of six months the same need to be allowed. In view of the above, the Assessing, Offlcer is directed to allow exemption of Rs. 100 lakhs u/s. 54EC of the Act. This ground of appeal is, thus a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which the original asset or assets are transferred and in the subsequent financial year does not exceed fifty lakh rupees." (Para 8) In any event, from 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 Rs. 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" 6. Similar issue has been deci ..... X X X X Extracts X X X X X X X X Extracts X X X X
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