9911796707
TMI Blog2025 (5) TMI 1664X X X X Extracts X X X X X X X X Extracts X X X X ..... low the exemption in FY 2013-14. The assessee submitted explanation but the AO disallowed the same and added the total income of the assessee. 3. Aggrieved by the said order, the assessee preferred an appeal before the Ld. CIT(A) wherein the appeal of the assessee is dismissed. Being aggrieved and dissatisfied the assessee preferred an appeal before us. 4. The Ld. A.R challenges the very impugned order thereby submitting that the Ld. CIT(A) erred in confirming the action of AO ignoring the judicial pronouncement held by the Hon'ble Madras High Court and Karnataka High Court and ITAT that if the assessee invests the amount in the current year and another amount in the next financial year but within six months from the date of transfer the assessee entitled to claim deduction u/s 54EC of the Act. The ld. AR submits that language of Section 54EC proviso makes it clear that the maximum limit for investment in specified asset is Rs. 50,00,000/- for a financial year only. Strictly following the words of the proviso, one can invest upto Rs. 50,00,000/- in the current year and another sum of Rs. 50,00,000/- in the next financial year, but within six months from the date of transfer. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ain bonds (Limitation period for investment) - Whether where assessee company invested long term capital gain in REC bonds in two different financial years but within six months from date of transfer of capital asset, exemption claimed would be allowed - Held, yes [Paras 4 and 6] [In favour of assessee]" The relevant portion of the above judgment is reproduced herein below: "3. We have heard Mr.T.Ravi Kumar, learned Senior Standing Counsel appearing for the Revenue and Mr.Venkat Narayanan, learned counsel appearing for the respondent. 4. The issue involved in this appeal is no longer res integra in view of the decision of this Court in CIT v. C. Jaichander [Order dated 15.9.2014 made in T.C.(A) Nos. 419 and 533 of 2014], to which one of us - R.Sudhakar,J. is a party). In the said decision, this Court held as under: '5. 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 financial year during the six months period. 6. For better understanding of the issue, it would be apposite ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act, a second proviso, which reads as under: "Provided further 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." 9. At this juncture, for better clarity, it would be appropriate to refer to the Notes on Clauses - Finance Bill 2014 and the Memorandum explaining the provisions in the Finance (No.2) Bill, 2014, which read as under: "Notes on Clauses - Finance Bill 2014: Clause 23 of the Bill seeks to amend section 54EC of the Income-tax Act relating to capital gain not to be charged on investment in certain bonds. The existing provisions contained in sub-section (1) of section 54EC provide that where capital gain arises from the transfer of a long-term capital asset and the assessee has within a period of six months invested the whole or part of capital gains in the long-term specified asset, the proportionate capital gains so invested in the long-term specified asset out of total capital gain shall not be charged to tax. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... slature has chosen to remove the ambiguity in the proviso to Section 54EC(1) of the Act by inserting a second proviso with effect from 1.4.2015.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 anything more into the first proviso to Section 54EC(1) of the Act, as it stood in relation to the assessee's. 11. In any event, from a reading of Section 54EC(1) and the first proviso, it is clear that the time limit for investment is six months from the date of transfer and even if such investment falls under two financial years, the benefit claimed by the assessee cannot be denied. It would have made a difference, if the restriction on the investment in bonds to Rs. 50,00,000/- is incorporated in Section 54EC(1) of the Act itself. However, the ambiguity has been removed by the legislature with effect from 1.4.2015 in relation to the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
