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TMI Blog2017 (5) TMI 168X X X X Extracts X X X X X X X X Extracts X X X X ..... different financial year ignoring the fact that the total investment made by the assessee exceeded the statutory limit of Rs. 50 lakhs in respect of capital gains offered for tax of impugned the assessment year. 2. The appellant prays that the order of CIT-A on the above grounds be set aside to the file of AO or confirm the order of the AO. 3. "The appellant craves leave to amend or later any granted or add a new ground which may be necessary." 3. In this case the assessee had claimed exemption u/s.54EC at Rs. 1,00,00,000/- out of the Long Term Capital Gains. During assessment proceedings, the assessee was asked to justify the said exemption of Rs. 1,00,00,000/- as against the limit Rs. 50,00,000/- specified under that section. The A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... akhs as allowable) and hence, the excess claimed amount of Rs. 50,00,000/- is added back to the total income of the assessee." 4. Upon assessee's appeal Ld. CIT-A decided the issue in favour of assessee by placing reliance upon several other decisions. He concluded as under:- "Adverting to the instant case the fact on record clearly demonstrates that the assessee had made investment of Rs. 1 crore split into Rs. 50 lacs each in two financial year on 21.01.2011 and 06.07.2011 respectively. Hence the ratio of the decision, supra, is applicable in the assessee's case. In view of the aforesaid discussion, the factual and legal matrix of the case the addition of Rs. 50 lacs u/s. 54EC stands deleted." 5. Against this order revenue is in ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsferred being hereafter in this section referred to as the original asset) and the assessee has, at any time within a period of six months after the date of such transfer, invested the whole or any part of capital gains in the long-term specified asset, the capital gain shall be dealt with in accordance with the following provisions of this section, that is to say,- (a) if the cost of the long-term specified asset is not less than the capital gain arising from the transfer of the original asset, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the long-term specified asset, from capital gains arising from transfer of one or more original assets, 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." At this juncture, for better clarity, it would be appropriate to refer to the Notes on Clauses - Finance Bill 2014 and the Memorandum explaining the provisions in the Finance (No.2) Bill, 2014, which read as under: "Notes on 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 w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... long term specified asset, out of the whole of the capital gain, shall not be charged to tax. The proviso to the said subsection 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estriction on the investment in bonds to Rs. 50,00,000/- is incorporated in Section 54EC(1) of the Act itself. However, the ambiguity has been removed by the legislature with effect from 1.4.2015 in relation to the assessment year 2015-16 and the subsequent years. For the foregoing reasons, we find no infirmity in the orders passed by the Tribunal warranting interference by this Court. The substantial questions of law are answered against the Revenue and these appeals are dismissed. No costs." 7. On the touchstone of above said case law we find that assessee is eligible for exemptions as per the extant provision of Section 54EC for the whole of the amount of Rs. One Crores invested. As held by the Hon'ble High court the second proviso w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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