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2015 (10) TMI 2705

Allowing exemption u/s 54EC - Capital gain not to be charged on investment in certain bonds - assessee did not made any investment within six months from the date of transfer and further did not fulfill the conditions prescribed in the agreement, therefore, exemption was wrongly allowed to the assessee - Held that:- The intent and purpose of section 54EC is the date, when the assessee actually collects/receives the sale consideration and thereafter makes investment within six months and that is .....

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:- 19-10-2015 - Shri Joginder Singh, Judicial Member, and Shri Rajesh Kumar, Accountant Member Revenue by Shri Randhir Kr. Gupta-DR O R D E R Per Joginder Singh (Judicial Member) The Revenue is aggrieved by the impugned order dated 20/05/2013 of the ld. First Appellate Authority, Mumbai. 2. The only ground raised in this appeal pertains to allowing exemption u/s 54EC of the Income Tax Act, 1961 (hereinafter the Act). The crux of the argument advanced by Shri Randhir Gupta, ld. DR, is that the as .....

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registered on 26/04/2007. As per the development agreement, the terms of the payments were that the assessee has to make the payments as per the schedule mentioned at page 7 of the impugned order, i.e. the different payments were to be made from 09/03/2007 and till 02/04/2011, the last payment of ₹ 5 lakh was to made at the time of conveyance. The assessee received ₹ 45 lakh each on 07th and 08th October and invested the same in REC bond (Rs.50 lakh on 08/03/2008 and ₹ 30 lakh .....

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time within a period of six months after the date of such transfer, invested the whole or any part of capital gains in the long-term specified asset, the capital gain shall be dealt with in accordance with the following provisions of this section, that is to say,- (a) if the cost of the long-term specified asset is not less than the capital gain arising from the transfer of the original asset, the whole of such capital gain shall not be charged under section 45; (b) if the cost of the long-term .....

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uisition, the amount of capital gains arising from the transfer of the original asset not charged under section 45 on the basis of the cost of such long-term specified asset as provided in clause (a) or, as the case may be, clause (b) of sub-section (1) shall be deemed to be the income chargeable under the head "Capital gains" relating to long-term capital asset of the previous year in which the long-term specified asset is transferred or converted (otherwise than by transfer) into mon .....

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is section,- (a) "cost", in relation to any long-term specified asset, means the amount invested in such specified asset out of capital gains received or accruing as a result of the transfer of the original asset; (b) "long-term specified asset" for making any investment under this section during the period commencing from the 1st day of April, 2006 and ending with the 31st day of March, 2007, means any bond, redeemable after three years and issued on or after the 1st day of .....

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investment under this section on or after the 1st day of April, 2007 means any bond, redeemable after three years and issued on or after the 1st day of April, 2007 by the National Highways Authority of India constituted under section 3 of the National Highways Authority of India Act, 1988 (68 of 1988) or by the Rural Electrification Corporation Limited, a company formed and registered under the Companies Act, 1956 (1 of 1956). 2.2. If the aforesaid provision is analyzed, it deals with capital ga .....

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:- Sl. No. The date of receipt of the amount/ instalment Amounts received Total amount Stand of the Assessing Officer 1. 01/04/2008 14,30,000 + 1,00,000 + 15,30,000 30,60,000 Allowed by Assessing Officer 2. 15/07/2008 15,50,000 15,50,000 Allowed by Assessing Officer 3. 12/11/2008 50,50,000 50,50,000 Allowed by Assessing Officer 4. 05/07/2009 50,00,000 50,00,000 Assessing Officer denied claimed deduction u/s 54EC 2.3. If the aforesaid amounts are analyzed, the ld. Assessing Officer allowed the cl .....

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from the decision from Hon ble jurisdictional High Court in Cello Plast (2012) 24 taxman.com 111 (Bom.) to the effect that law does not compel a man to do that which he cannot possibly perform. Even otherwise, section 54EC prescribes that exemption shall be available if the investment is made in the specified bonds within a period of six months, thus, the assessee, possibly can make the investment of the amount within the specified period, when it is received by the assessee. The intent and purp .....

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