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Asst. C.I.T. -19 (3) , Mumbai Versus Shri Upendra C. Parekh

Claim u/s 54EC - making investment in RECL Bonds of ₹ 50,00,000/- each in 2 financial years - investment of ₹ 50 lakhs each were made in the month of March 2013 and May, 2013 falling within the stipulated period of six months but in two different financial years - AO disallowed the deduction under section 5 EC by making an investment cannot exceed ₹ 50 lakhs in the assessment year - Held that:- From the provisions of Sec. 54EC we noted that the limit of ₹ 50,00,000/- .....

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investment can be made within a period of 6 months. If 6 months falls within a different financial year, as has happened in this case, in our opinion, this Tribunal cannot add the embargo that the assessee cannot make the investment to avail of the exemption under Section 54EC in the different financial year if he had already made the investment in the financial year in which the capital asset is transferred. In our opinion, the language of Section 54EC is clear and unambiguous and it leads to t .....

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#8377; 50,00,000/- as permissible limit in a particular financial year. The Government did not intend to restrict the maximum amount of exemption permissible under Section 54EC. Legislature in our opinion has consciously used the words “in a financial year” in the proviso to Sec. 54EC of the Act. If the legislature wanted to restrict the exemption itself to ₹ 50,00,000/-, it could have have simply dispensed with using the words ‘in a financial year’. CIT(A) has rightly deleted the addition .....

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On the facts and circumstances of the case and in Law, whether the Ld. CIT(A) erred in allowing the claim u/s 54EC of the Act, of making investment in RECL Bonds of ₹ 50,00,000/- each in 2 financial years without considering the duly the provisions of the IT Act 1961 that the total exemption allowed is ₹ 50 Lacs only and that the second proviso to section 54EC is clarificatory in nature. 2. The Appellant prays that the order of the CIT(A) on the above ground be set aside and that of .....

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de in the month of March 2013 and May, 2013 falling within the stipulated period of six months but in two different financial years. The AO disallowed ₹ 50 lakhs under section 54EC as in his opinion the deduction under section 54 EC by making an investment cannot exceed ₹ 50 lakhs in the assessment year. The assessee went in appeal before the CIT(A). Relying on the decisions of various Tribunals and after interpreting the provisions of Section 54EC the CIT(A) allowed the ground of ap .....

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a, Shree Ram Engg. & Mfg. Industries Vs. Asst. Commissioner of Income-tax, 20 taxmann.com 75 (Ahd.). In the case of Aspi Ginwala, the co-ordinate bench has held as under: - 7. We have heard both the parties and perused the records and find that the assessee and his brother Shri Rustom Ginwala sold a property on 22-10-2007 for ₹ 6.21 Crores. The assessee and his brother had 50% share in this property. The assessee made investment of ₹ 50 lakhs on 31 - 12-2008 in REC Bonds and S .....

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so 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 ₹ 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 21-04-2008 in order to avail exemption u/s 54EC of the Act. There is no dispute about ₹ 50 lakhs invested on 31-12-2007 in REC Bonds. The dispute is only about furt .....

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gible investment in NHAI Bonds should be treated in time. There is also no dispute about the fact that subscription to the eligible investment was closed during the period 01-04-2008 to 26-05-2008. The dispute which remains to be decided by us in this case is whether as per the provisions of section 54EC the assessee is entitled for exemption of ₹ 1 Crore as six months period for investment in eligible investment involves two financial years. If the answer to this question is yes , whether .....

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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 ₹ 50 lakhs each in two different financial years and is able to claim exemption upto ₹ 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 ₹ 1 Crore in this case. This view .....

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ords in the section Here the situation is reverse. 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, it is hereby held that the assessee is entitled for exemption of ₹ 1 crore as six months' period for investment in eligible investments involved is two financial years. 9. Now, coming to the second aspect of the matter, whether investment of ₹ 50 lakhs made in NHAI Bonds on 26-05-2008 can .....

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which was beyond his control in making investment in these Bonds within the time prescribed. 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 se .....

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d that the deposit of the assessee was in accordance with the provisions of statute as on the last date i.e. the 31-8- 1995, the deposit could not be made due to the reason which was beyond the control of the assessee particularly in view that the efforts were made by the assessee a day prior to last date to deposit the requisite amount in the bank to make him entitle for exemption under sec 54F. As mentioned earlier, this position has also been accepted by the learned CIT(A). Therefore, we dire .....

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ecision was cited on behalf of the Revenue, we are left with no option but to hold that the investments made by the assessee on 26-05-2008 beyond six months is eligible for exemption in view of the fact that no subscription for eligible investment was available to the assessee from 1st April, 2008 to 26-05- 2008. 10. In the result, both the appeals are allowed. 4. We have also noted that subsequently, a contrary view has been taken by Jaipur bench in Asst. Commissioner of Income-tax vs. Raj Kuma .....

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nterpretation. Had there been an intention of the legislature to restrict the exemption to ₹ 50,00,000/-, the legislature would have provided the embargo in this regard. Restriction relates only to the investment made in any financial year by the assessee. Making of the investment is a condition for availing of the exemption. Condition for availing of the exemption requires that the investment can be made within a period of 6 months. If 6 months falls within a different financial year, as .....

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inancial year the investment made did not exceed ₹ 50,00,000/-. We have also gone through the circular no. 3/2008 dtd. 12.3.2008 issued by the CBDT being an explanatory note on the provisions relating to direct taxes in Finance Act, 2007. In para 28.2 thereof the reason for it to set the limit on the quantum of the investment by a person in a financial year are given as under : 28.2 The quantum of investible bonds issued by NHAI and REC being limited, it was felt necessary to ensure that t .....

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ee in such long-term specified assets. Investments in such specified assets to avail exemption under Section 54EC, on or after 1st day of April, 2007 will not exceed fifty lakh rupees in a financial year. From this circular also, it is apparent that the Government only intended to restrict the investment in a particular financial year and accordingly has fixed the limit of ₹ 50,00,000/- as permissible limit in a particular financial year. The Government did not intend to restrict the maxim .....

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ein as under : It is settled principle of law that the courts while construing Revenue Acts have to give a fair and reasonable construction to the language of a statute without leaning to one side or the other, meaning thereby that no tax or levy can be imposed on a subject by an Act of Parliament without the words of the statute clearly showing an intention to lay the burden on the subject. In this process, the courts must adhere to the words of the statute and the so called equitable construct .....

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