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2015 (9) TMI 1226 - ITAT MUMBAI

2015 (9) TMI 1226 - ITAT MUMBAI - TMI - Disallowance of exemption u/s.54EC - further investment in REC bonds of ₹ 50 lakhs made in the next financial year - CIT(A) deleting disallowance - Held that:- The issue is squarely covered by the decision of Hon’ble Madras High Court in the case of Jaichander, [2014 (11) TMI 54 - MADRAS HIGH COURT ] wherein held 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 tran .....

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Thus no infirmity in the order of CIT(A) for allowing further claim of exemption in respect of investment made in subsequent financial year amounting to ₹ 50 lakhs u/s.54EC of the I.T.Act. - Decided against revenue. - ITA No. 6987/Mum/2013 - Dated:- 8-7-2015 - D. Manmohan, VP And R. C. Sharma, AM,JJ. For the Appellant : Ms. Vandana Sagar For the Respondent : Shri Bhupendra Shah ORDER Per R. C. Sharma ( A. M. ) This is an appeal filed by the revenue against the order of CIT(A) .....

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has claimed deduction u/s. 54EC of ₹ 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 ₹ 50,00,000/-. In respect of claim of deduction of ₹ 1,00,00,000/-, it has filed copies of judgment in support of their claim u/s. 54EC for investment upto ₹ 1,00,00,000/- in different finan .....

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hat the investment made on or after 1st day of April 2007 in the long term specified asset by an assessee during any financial year does not exceed ₹ 50 lacs. The AO further stated that the case of the assessee is not the same as that of the appellant has relied upon and further confirmed in the, form of the following tabular:- Capital gain arose in F.Y.2009-10 Date of sale of investment 22/3/2010 Date of investment in REC Bond 29/3/2010 F.Y.over by 31/3/2010 Capital gain put to tax in AY .....

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iew of the above, the deduction eligible u/s. 54EC was restricted to. ₹ 50 lakhs only. 4. By the impugned order, 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 wa .....

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Aspi Ginwala, Shree Ram Engg. & Mfg. Industries vs. ACIT reported in 52 SOT 16,(2012) wherein the facts were that the appellant sold a house property on 22/10/2007' for ₹ 6.21 crores. The appellant had 50% share in that property. The appellant made an investment of ₹ 50 lakhs on 31/12/2008 in REC Bonds and ₹ 50 lakhs on 26/512008 in NHAI Bonds and claimed exemption of ₹ 1 crore u/s. 50EC. The investment in REC Bond was within time limit of six months prescribed in .....

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es' whether investment made by the assessee in NHAI Bonds on 26112008 beyond six months period is' eligible for exemption in view of the fact that no 'subscription for eligible investment was available to the assessee from 1/4/2008 to 26/5/2008. (Para 7). It is clear from proviso to section 54EC that where assessee transfers his capital asst after 30th September of the financial year he gets an opportunity to make an investment of R. 50 lakhs each in two different financial year and .....

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o be allowed. In view of the above, the Assessing, Offlcer is directed to allow exemption of ₹ 100 lakhs u/s. 54EC of the Act. This ground of appeal is, thus allowed. 5. We have considered rival contentions and found that the issue is squarely covered by the decision of Hon ble Madras High Court in the case of Jaichander, 370 ITR 0579, wherein the Hon ble High Court held as under :- "On a plain reading of the above said provision, we are of the view that Section 54EC(l) of the Act res .....

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ment is six months and the benefit that flows from the first proviso is that if the assessee makes the investment of ₹ 50,00,000/- in any financial year, it would have the benefit of Section 54EC(1) of the Act. (Para 7) The legislature noticing the ambiguity in the abovesaid provision, by Finance (No.2) Act, 2014, with effect from 1.4.2015, inserted after the existing proviso to subsection (1) of Section 54EC of the Act, a second proviso, which reads as under: "Provided further that t .....

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