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TMI Blog2015 (2) TMI 527X X X X Extracts X X X X X X X X Extracts X X X X ..... elief to the assessee to the extent impugned in the grounds enumerated below: 1. The order of the CIT(A) is opposed to law and facts of the case. 2. On the facts and in the circumstances of the case and in law the Ld. CIT(A) erred in allowing the deduction u/s 54EC on the investment of Short Term Capital Gain arising from the sale of depreciable asset, by relying on the decision of the Hon'ble Bombay High Court in the case of CIT v/s Ace Builders (P) Ltd 144 Taxman 855 (Bom), ignoring that the decision in that case was not accepted on merit and SLP was not filed due to low tax effect. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Punamiya, defended the conclusion arrived at in the impugned order by contending that the impugned issue is covered by the aforesaid decision in the case of ACE Builders Pvt. Ltd. from Hon'ble jurisdictional High Court. 2.2. We have considered the rival submissions and perused the material available on record. The facts, in brief, are that the assessee company declared income of Rs. 3,060/- in his return filed on 31st October, 2009. The assessee sold a flat at maker tower, Cuffe Parade, Mumbai. The assessee offered capital gain of Rs. 92,47,752/- and claimed deduction u/s 54EC of the Act, investing Rs. 1,00,00,000/- (Rs.50 lakh before 31/03/2009 and remaining Rs. 50 lakh after 31/03/2009 in the bonds prescribed u/s 54EC of the Act). The As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... short term capital asset. Accordingly, the Tribunal was justified in allowing exemption u/s 54E in respect of the capital gains arising on the transfer of a capital asset on which depreciation had been allowed." 2.4. If the aforesaid conclusion by the Hon'ble jurisdictional High Court is applied to the facts of the case. The assessee sold the flat for Rs. 2,81,00,000/- and purchased the new flat within prescribed time limit for Rs. 1,69,21,367/-, thus, the net capital gain was Rs. 92,47,752/-. The assessee invested Rs. 1,00,00,000/- in purchasing the new property and making investment u/s 54EC of the Act, thus, the tax payable under the capital gains remains nil. The assessee invested Rs. 50 lakh u/s 54EC in National Highway Authority of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble jurisdictional High Court in the case of ACE Builders (P.) Ltd. (2005) 144 taxman 855 (Bom.). The ratio laid down in Aditya Medisales Ltd. (2013) 38 taxman.com 244 (Guj.) also supports our view. Identical ratio was laid down in CIT vs C. Jaichandar and Shri Ram indubal I.C.(A) Nos.419 and 533 of 2014 order dated 15/09/2014 from Hon'ble Madras High Court. We are also fortified by the decision in Ms. Leelawati M. Sayani vs ITO (2014) 49 taxman.com 579 (Mum. Tribunal) and Aspi Ginwala, Shree Ram Engineering & Mfg. Industries vs ACIT (2012) 20 taxman.com 75 (Ahd.), Mrs Rati Anil Virwani (ITA No.817/Mum/2013) order dated 10/12/2014 and Dr. (Mrs.) Sudha S.Trivedi vs ITO (ITA No.6040 & 6186/Mum/2007) order dated 20/02/2009. In view of these fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat on a plain reading of the provision, the Hon'ble High Court held that section 54EC (1) of the Act restrict the time limit for the period of investment after the property was sold to six month and there was no cap on the investment to be made in bonds, meaning thereby, as per the mandate of section 54EC(1) of the Act, the time limit for investment is six month and the benefit that flows from the first proviso is that if the assessee makes the investment of Rs. 50 lakh in any financial year, it would have benefit of section 54EC (1) of the Act. However, the ambiguity, if any, was removed by the legislature with effect from 01/04/2015. Identical ratio was laid down in Ms. Leelawati M. Siyani vs ITO (ITA No.6619/Mum/2013). Thus, the Assessi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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