9911796707
TMI Blog2014 (12) TMI 852X X X X Extracts X X X X X X X X Extracts X X X X ..... decision of Sriram Indubal v. ITO in I.T.A.No.1950/Mds/2012, especially when there is an appeal pending before the High Court which has been preferred by the appellant? (ii)Whether the Tribunal ought to have noted that the intention of the legislature is to limit the investment in the long term specified asset to Rs. 50 Lakhs as held in the case of Areva T&D India Ltd. v. Assistant Commissioner, 326 ITR 540, which had been relied upon by the Assessing Officer and the Commissioner of Income Tax (Appeals)? 2.1. The brief facts of the case are as under: The assessee company is engaged in the business of manufacturing engineering components and offering engineering consultancy. The assessee company filed return of income for the assessment y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d order, the assessee preferred appeal to the Tribunal. The Tribunal held that the exemption granted under proviso to Section 54EC(1) of the Act should be construed not transaction-wise, but financial year-wise. It further held that if an assessee is able to invest a sum of Rs. 50,00,000/- each in two different financial years, within a period of six months from the date of transfer of the capital asset, it cannot be said to be inadmissible. Accordingly, the Tribunal allowed the appeal filed by the assessee. 2.5. Assailing the said order passed by the Tribunal, the Revenue has filed this appeal on the questions of law referred supra. 3. We have heard Mr.T.Ravi Kumar, learned Senior Standing Counsel appearing for the Revenue and Mr.Venkat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, the whole of such capital gain shall not be charged under section 45 ; (b) if the cost of 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.' 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 fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 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 f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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, 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. This amendment will take effect from 1st April, 2015 and will, accordingly, apply in relation to assessment year 2015-16 and subsequent assessment years. 10. The legisla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision of this Court in Areva T and D India Ltd. v. Assistant Commissioner of Income tax, [2010] 326 ITR 540, relied upon by the learned Senior Standing Counsel for the appellant is not applicable to the facts of the present case, as in the said decision the writ petitions filed for issuance of writ of declaration declaring that the conditions occurring in Notification No. 380 of 2006 F. No. 142/09/ 2006-TPL, dated December 22, 2006, along with the words 'subject to the following conditions, namely,' issued by the Central Board of Direct Taxes are ultra vires Section 54EC of the Income-tax Act, 1961, and arbitrary and violative of Articles 14 and 265 of the Constitution of India and consequently unenforceable , were dismisse ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
