9911796707
TMI Blog2014 (1) TMI 1443X X X X Extracts X X X X X X X X Extracts X X X X ..... ad of Rs. 1,00,00,000/- invested in long term bonds. 3. Brief facts of the case are that the assessee is a company engaged in the business of manufacturing engineering components and offering engineering consultancy. The assessee has sold the land and building of Hyderabad unit for a total consideration of Rs. 1.75 crores. So far as the sale of land component is concerned, the assessee sold the asset at Hyderabad for Rs. 1,13,74,000/- and after adjusting the indexed cost of acquisition, the total long term capital gains was calculated at Rs. 1,09,98,256/- and Rs. 1.00 crore claimed as deduction under section 54EC of the Act by investing Rs. 50.00 lakhs in REC bonds on 31.03.2009 and another Rs. 50.00 lakhs in the same organization on 31.04 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peal is whether the assessee is eligible for deduction under section 54EC for Rs. 50.00 lakhs or Rs. 1.00 crores. In this case, the assessee sold the property and invested Rs. 50.00 lakhs each in two different assessment years in REC Bonds within six months. The case of the Revenue is that the assessee is eligible claiming deduction only for Rs. 50.00 lakhs and remaining claim of Rs. 50.00 lakhs was denied. It is an undisputed fact that the assessee has invested in REC Bonds in two different assessment years. In similar circumstances, the Coordinate Bench of the Tribunal in the case of Smt. Sriram Indubal (supra) has considered the entire issue of eligibility under section 54EC and held that the assessee is eligible for claiming deduction o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the long-term specified asset is less than the capital gain arising from the transfer of the original asset, so much of the capital gain as bears to the whole of the capital gain the same proportion as the cost of acquisition of the long-term specified asset bears to the whole of the capital gain, shall not be charged under section 45: 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 rupees". 8. The first condition mentioned in Section 54EC(1) is that the investment has to be made within a period of six months from the date of transfer of capital asset. Since the dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y an assessee in such long-term specified assets. Investments in such specified assets to avail exemption under section 54EC, on or after the 1st day of April, 2007 will not exceed fifty lakh rupees in a financial year.' Last sentence of the Explanatory Memorandum clearly states that the exemption for investment cannot exceed Rs. 50 lakhs in a financial year. Therefore, if the assessee is able to keep the six months' limit from the date of transfer of capital asset, but, still able to place investment of Rs. 50 lakhs each in two different financial years, we cannot say that the restrictive proviso will limit the claim to Rs. 50 lakhs only. Since assessee here had placed Rs. 50 lakhs in two different financial years ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
