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TMI Blog2014 (11) TMI 54X X X X Extracts X X X X X X X X Extracts X X X X ..... years? (ii) Whether on the facts and circumstances of the case, the Tribunal was right in not referring the matter to the Special Bench under Section 255(4), when there are conflicting views by different benches?" 3.1. For better clarity, we state the facts of the case in T.C.(A) No.533 of 2014. The assessee filed return of income on 27.9.2009 and the same was processed under Section 143(1) of the Act. The case of the assessee was selected for scrutiny and notices under Sections 143(2) and 142(1) of the Income Tax Act, 1961 (for brevity, the Act) were issued on 29.9.2010 and 14.10.2010 respectively. In terms of the said notice, the assessee furnished details to the department. 3.2. It is stated that the assessee sold a property at Palavakkam for a sale consideration of Rs. 3,46,50,000/- vide agreement of sale dated 18.2.2008 entered into with the Ceebros Property Developments. The appellant invested Rs. 1,00,00,000/- out of the sale proceeds in certain bonds in two financial years, namely, Rs. 50,00,000/- in Rural Electrification Corporation Bonds in the financial year 2007-2008 and Rs. 50,00,000/- in National Highways HAI Bond in the financial year 2008-2009. 3.3. The Assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble 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 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 but within six months period from the date of transfer of capital asset, assessee was definitely eligible to claim exemption upto Rs. 1 Crore. The same view has been taken by Ahmedabad Bench of this Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecified 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." 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 on or after 1.4.2007 in the long-term specified asset by an assessee during any financial year does not exceed fifty lakh rupees. In other words, as per the mandate of Section 54EC(1) of the Act, the time limit for investment is six months and the benefit that flows from the first proviso is that if the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section (1) of section 54EC of the Act provide that where capital gain arises from the transfer of a long-term capital asset and the assessee has, at any time within a period of six months, invested the whole or any part of capital gains in the long-term specified asset, out of the whole of the capital gain, shall not be charged to tax. The proviso to the said sub-section provides that the investment made in the long-term specified asset during any financial year shall not exceed fifty lakh rupees. However, the wordings of the proviso have created an ambiguity. As a result the capital gains arising during the year after the month of September were invested in the specified asset in such a manner so as to split the investment in two years i.e., one within the year and second in the next year but before the expiry of six months. This resulted in the claim for relief of one crore rupees as against the intended limit for relief of fifty lakhs rupees. Accordingly, it is proposed to insert a proviso in sub-section (1) so as to provide that the investment made by an assessee in the long-term specified asset, out of capital gains arising from transfer of one or more original asset, durin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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