TMI Blog2017 (5) TMI 168X X X X Extracts X X X X X X X X Extracts X X X X ..... nds - assessee is eligible for exemptions as per the extant provision of Section 54EC for the whole of the amount of Rs. One Crores invested - it was permissible on the part of assessee to make investment of ₹ 1 crore split into ₹ 50 lakh each in two financial years that is on 21.01.2011 and 06.07.2011 respectively - appeal dismissed - decided against Revenue. - ITA no.7112/Mum./2014 - - - Dated:- 27-4-2017 - SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER For The Assessee : Shri. Niresh Joshi For The Revenue : Shri. Vipul K. Mody ORDER PER: SHAMIM YAHYA This appeal by the assessee is directed against order of Ld. CIT-A dated 16.09.2014 and pertains to assessment year 2012- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uring a financial year. That it is only the investment during a financial year which is restricted to ₹ 50,00,000/- and not the deduction u/s.54EC of the Act. That in view of the above, the assessee submitted that deduction of ₹ 1,00,00,000/- was correctly claimed u/s.54EC of the Act. However the A.O was not satisfied he referred to the provisions of section 54EC and the proviso there to. A.O concluded as under:- The case of the assessee is squarely covered by the decision of Hon ble ITAT, Jaipur A Bench in the case of ACIT Vs. Shri Raj Kumar Jain sons (HUF)(2012) 20 ITR(T) 212 (Jaipur), wherein a similar case of the assessee, the deduction u/s. 54EC, in respect of investments in long term specified assets of ₹ 10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat second provisio to section 54EC is effectively from 11.04.2015. Hence Ld. Counsel submitted that the said proviso is not applicable in assessee s case and hence the A.O s order is unsustainable. 6. We have carefully considered the submissions and perused the records. We find that Hon ble Madras High Court has elaborately considered this issue in the case of CIT vs. C. Jaichander 370 ITR 579 above. The Hon ble High Court considered the provision of section 54EC and expounded as under:- The key issue that arises for consideration is whether the first proviso to Section 54EC(1) of the Act would restrict the benefit of investment of capital gains in bonds to that financial year during which the property was sold or it applies to any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... On a plain reading of the above said provision, we are of the view that Section 54EC(1) of the Act restricts the time limit for the period of investment after the property has been sold to six months. There is no cap on the investment to be made in bonds. The first proviso to Section 54EC(1) of the Act specifies the quantum of investment and it states that the investment so made on or after 1.4.2007 in the long-term specified asset by an assessee during any financial year does not exceed fifty lakh rupees. In other words, as per the mandate of Section 54EC(1) of the Act, the time limit for investment 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 f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e said sub-section provides that the investment made in the long term specified asset during any financial year shall not exceed fifty lakh rupees. It is proposed to insert a proviso below first proviso in said sub-section (1) so as to provide that the investment made by an assessee in the long-term specified asset, from capital gains arising from transfer of one or more original assets, during the financial year in which the original asset or assets are transferred and in the subsequent financial year does not exceed fifty lakh rupees. This amendment will take effect from 1st April, 2015 and will, accordingly, apply in relation to assessment year 2015-16 and subsequent years. Memorandum explaining the provisions in the Fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exceed fifty lakh rupees. This amendment will take effect from 1st April, 2015 and will, accordingly, apply in relation to assessment year 2015-16 and subsequent assessment years. The legislature has chosen to remove the ambiguity in the proviso to Section 54EC(1) of the Act by inserting a second proviso with effect from1.4.2015. The memorandum explaining the provisions in the Finance (No.2)Bill, 2014 also states that the same will be applicable from 1.4.2015 in relation to assessment year 2015-16 and the subsequent years. The intention of the legislature probably appears to be that this amendment should be for the assessment year 2015-2016 to avoid unwanted litigations of the previous years. Even otherwise, we do not wish to read a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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