TMI Blog2016 (6) TMI 1122X X X X Extracts X X X X X X X X Extracts X X X X ..... term capital gains i.e. sale of shares on 21.01.2010 falling in financial year 2009-10, the assessee is entitled to the benefit provided by the proviso under section 54EC of the Act and consequently, the order of CIT(A) merits to be upheld. Dismissing the grounds of appeal raised by the Revenue, the appeal of the Revenue is dismissed. - Decided in favour of assessee - ITA No. 321/PN/2015 - - - Dated:- 30-6-2016 - MS. SUSHMA CHOWLA, JM Appellant by : Shri Amit Dua Respondent by : None ORDER PER SUSHMA CHOWLA, JM: This appeal filed by the Revenue is against the order of CIT(A)-2, Nashik, dated 02.01.2015 relating to assessment year 2010-11 against order passed under section 143(3) of the Income-tax Act, 1961 (in s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... years falling within the statutory period of six months from the date of transfer of capital asset as provided under section 54EC of the Act. As per the assessee, investment in ea ch of the financial years did not exceed ₹ 50 lakhs and consequently, the assessee made the claim. The Assessing Officer referred the matter to JCIT, Range 2, Nashik under section 144A of the Act, who issued the instructions and the claim of exemption under section 54EC of the Act of ₹ 72.50 lakhs was restricted to ₹ 50 lakhs and the claim of remaining exemption of ₹ 22,49,401/- was not allowed to the assessee. 6. Before the CIT(A), the assessee filed written submissions which are incorporated under para 5 at pages 3 to 15 of the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A) in turn, allowed the claim of the assessee holding that the proviso was putting a cap of the monetary limit of ₹ 50 lakhs during the financial year. The substantive provision already had set a time limit of six months from the date of transfer of capital gains for investment for exemption. Further, newly inserted provision by the Finance Act, 2007 sets an additional time limit by stating during any financial year . Both the time limits when interpreted would make it clear that the investment made during any financial year falling within the span of six months may shelter to two financial years and investment could be made upto ₹ 1 crore during the span. Reliance in this regard was placed on the decision of Hon ble High Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ancial year, then the benefit of said section is to be allowed to the assessee. In case, the period of six months falls within two financial years, then the question which arises for adjudication is whether the assessee can claim the aforesaid deduction under section 54EC of the Act to the extent of ₹ 50 lakhs in each of the financial year totaling ₹ 1 crore, where the investment is made in the aforesaid bonds in two financial years separately but within period of six months from the date of sale of assets. This issue arose for consideration before the Hon ble High Court of Madras in CIT Vs. C. Jaichandar (supra ) and later in CIT Vs. Coromandel Industries Ltd. (2015) 370 ITR 586 (Mad) have laid down that the exemption gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... long term specified assets by an assessee during any financial year should not exceed ₹ 50 lakhs. However, the benefit that flows from the proviso was that where the assessee makes investment of ₹ 50 lakhs in any financial year, it could have the benefit of section 54EC(1) of the Act. Applying the aforesaid proposition to the facts of the present case, where the assessee had invested ₹ 50 lakhs in REC bonds i.e. specified assets as provided under section 54EC of the Act on 28.02.2010 i.e. in financial year 2009-10 and ₹ 22,50,000/- on 30.04.2010 i.e. in financial year 2010-11 as against the capital gains arising of ₹ 72,49,401/- on the transfer of long term capital gains i.e. sale of shares on 21.01.2010 falli ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
