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TMI Blog2024 (10) TMI 1270X X X X Extracts X X X X X X X X Extracts X X X X ..... income for A.Y. 201213 on 26.07.2012 declaring total income of Rs.6,13,82,049/. The original assessment was completed under Section 143(3) of the Income Tax Act, 1961 (in short 'the Act') on 31.12.2014 on total income of Rs.6,23,19,924/-. Subsequently, the case was reopened u/s.147 of the Act for the reason that assessee had claimed exemption u/s.54EC of the Act, which was not found in accordance with the provisions of the Act. The re-assessment was completed on 08.12.2019 at total income of Rs.6,72,70,700/-, wherein addition of Rs.50 Lakhs was made on account of excess exemption claimed u/s.54EC of the Act. 3. Aggrieved with the order of the AO, the assessee had filed an appeal before the First Appellate Authority, which has been decided ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e period of six months from the date of transfer and the quantum of investment also did not exceed Rs.50 Lakhs in each of the financial year. The Ld. AR contended that the AO was not correct in restricting the exemption u/s.50EC of the Act to Rs.50 Lakhs only and disallowing the investment of Rs.50 Lakhs. He explained that the limit of Rs.50 Lakhs for the total investment was introduced on the statute vide 2nd Proviso to Section 54EC of the Act vide Finance (No.2) Act, 2014 w.e.f. 01.04.2015 only and that this provision was not applicable to the current year. In this regard, he has placed reliance on the decision of Hon'ble Madras High Court in the case of CIT vs. Coromandel Industries Ltd., [2015] 5 taxmann.com 209 (Madras) and in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n made. The limit for investment in the bonds notified u/s.54EC of the Act was introduced vide first Proviso to Section 54EC of the Act w.e.f. 01.04.2007 which specified that investment made on or after 1st April, 2007 should not exceed Rs.50 Lakhs during any financial year. The assessee had fulfilled this condition as the period of six months was spread over two financial years and accordingly the assessee had made investment in bonds of Rs.50 Lakh each in the two financial years. The cap of total investment of Rs.50 Lakhs in the two financial years was introduced vide Finance (No.2) Act, 2014 w.e.f. 01.04.2015 only, whereby the second Proviso to section 54EC was introduced. This second Proviso clarified that the total investment, in the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, the investment of Rs.50 Lakhs each made in two financial years, within period of six months from the date of transfer could not have been disallowed. The Hon'ble Court further held that the amendment made w.e.f. 01.04.2015 was prospective in nature and applicable to A.Y. 2015-16 and subsequent years. The relevant portion of the judgment is reproduced below: "7. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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