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TMI Blog2013 (11) TMI 518X X X X Extracts X X X X X X X X Extracts X X X X ..... ent 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 the interpretation that the assessee can make the investment in two different financial years provided in a financial year the investment made did not exceed Rs.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 - it is apparent that the Government only intended to restrict the investment in a particular financial year and accordingly has fixed the limit of Rs. 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 Rs. 50,00,000/-, it could have have simply dispensed with using the words ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has invested the funds within 6 months and therefore is entitled for exemption under Section 54EC. The Assessing Officer noted that a proviso which reads as under, has been inserted w.e.f. 1.4.2007 in Section 54EC(1): "provided that the investment made on or after the first day of April, 2007 in the long term specified asset by an assessee during any financial year does not exceed fifty lakh rupees" On the basis of this proviso, the Assessing Officer took the view that the Assessee could have made the investment only upto Rs.50,00,000/- and he could have therefore got exemption under Section 54EC only for a sum of Rs.50,00,000/- and accordingly, he allowed exemption for Rs.50,00,000/- and made the addition of Rs.50,00,000/-. When the matter went before the CIT(A), the CIT(A) deleted the addition by holding as under : "I have gone through the facts of the case, contents of the assessment order and written submissions of the assessee. The fact is that the assessee has sold the property on 05.02.2008 and Rs.50,00,000/- was invested in the same financial year and Rs. 50,00,000/- was invested during the next F.Y. As per the proviso to Section 54EC of the Act that the lon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the subscription of eligible 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 Rs. 1 Crore as six months period for investment in eligible investment involves two financial years. If the answer to this question is "yes", whether investment made by the assessee on 26-05-2008 beyond six months period 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. 8. While going through the proviso of section 54EC, we find that the proviso to section reads as under. - "[Provided that the investment made on or after the 1st Day of April, 2007 in the long term specified asset by an assessee during any financial year does not exceed 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 opportu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... closed on 31 -8-1995 on account of strike as certified by the officials of the concerned bank. From the certification given by the bank officials, the assessee had approached the bank officials with the cheque for the amount of deposit on 30-8-1995. The assessee remained unable to obtain receipt on 31-8-1995 due to bank strike and the cheque was cleared on 1-9-1995. In this view of the situation, it can well be said 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 direct the Assessing officer to allow the necessary exemption to the assessee. Before parting we may observe that section 54F is a beneficial provision to encourage assessee to invest in house properties, Keeping in mind the above object behind the insertion of section 54F and co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reof 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 the benefit was available to all the investors. For this purpose, it was necessary to ensure that the limited number of bonds available for subscription is also available for small investors. Therefore, with a view to ensure equitable distribution of benefits amongst prospective investors, the government decided to impose a ceiling on the quantum of investment that could be made in such bonds. Accordingly, the said section has been amended so as to provide for a ceiling on investment by an assessee 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 Rs. 50,00,000/- as permissible limit in a particular financial year. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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