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TMI Blog2017 (9) TMI 1460X X X X Extracts X X X X X X X X Extracts X X X X ..... he appeal of the Revenue on this ground. - ITA No. 6907/DEL/2015 - - - Dated:- 21-9-2017 - Shri B.P. Jain, Accountant Member And Shri Kuldip Singh, Judicial Member Assessee by : Shri Sanjay Kapoor, CA Revenue by : Shri Arun Kumar Yadav, Sr.DR ORDER Per B.P. Jain, Accountant Member This appeal of the Revenue arises from the order of the ld. CIT(A)- 18, New Delhi vide order dated 27.10.2015 for assessment year 2012-13. 2. The Revenue has raised the following solitary ground of appeal: 1. Whether on the facts and circumstances of the case the Ld.CIT(A) has erred in deleting the addition of ₹ 49,53,675/- pm account of disallowance of deduction claimed by the assessee u/s 54EC of the Income-tax Act, 1961 [hereinafter referred to as 'the Act' for short] that the assessee can claim only ₹ 50 lakhs deduction u/s 54EC. 3. Brief facts of the case are that the assessee has sold agricultural land situated at Gurgaon for a consideration of ₹ 1,37,22,500/- and has shown long-term capital gain on the same at ₹ 99,53,675/-. The assessee has claimed deduction under section 54EC of the Income-tax Act, 1961 [hereinafter referred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the subsequent financial year. Thus the assessees who have earned the capital gain for the same assessment year cannot be treated differently. It was therefore, submitted that interpretation of proviso should not lead to discrimination against various tax payers. 5. The ld. CIT(A) however, deleted the addition so made by the Assessing Officer for the reasons mentioned in his order. 6. We have considered the rival arguments made by both the sides, perused the orders of the A.O and the ld. CIT(A) and the paper book filed on behalf of the assessee. We have also considered the various decisions relied upon by both the sides. First of all, it is relevant to reproduce section 54EC of the Act, which reads as below: Capital gain not to be charged on investment in certain bonds. 54EC. (1) Where the capital gain arises from the transfer of a long-term capital asset (the capital asset so transferred 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 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... c 54EC should not lead to discrimination against various taxpayers depending upon date of transfer. 9. The Hon'ble Madras High Court in CIT vs S Jaichander reported in 370 ITR 579 [Mad] has held as under: The key issue that arises for consideration is whether the first proviso to Section 54EC(1) of the Act would restrict the benefit of investment of capital gains in bonds to that financial year during which the property was sold or it applies to any financial year during the six months period. 10. For better understanding of the issue, it would be apposite to refer to Section 54EC(1) of the Act, which reads as under: Section 54EC. Capital gain not to be charged on investment in certain bonds.- (1) Where the capital gain arises from the transfer of a long term capital asset (the capital asset so transferred 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, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f 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 of the Act provides that where capital gain arises from the transfer of a longterm 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 fifty lakh rupees. It is proposed to insert a proviso below first proviso in said sub-section (1) so as to provide that the investment made by an assessee 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. This amendment will take effect from 1st April, 2015 and will, accordingly, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the assessees. In any event, from a reading of Section 54EC and the first proviso, it is clear that the time limit for investment is six months from the date of transfer and even if such investment falls under two financial years, the benefit claimed by fixe assessee cannot be denied. It would have made a difference, if the restriction on the investment in bonds to ₹ 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. 15. We are of the view that there are differences in the judicial opinion on the issue. Apparently, there is no decision of the jurisdictional HC in the matter. The reasoning of the ITAT Jaipur bench has persuasive value. However, considering the spirit of the proviso (supra) with prospective effect, the decision of Hon'ble Madras High Court and the law of precedence ..... X X X X Extracts X X X X X X X X Extracts X X X X
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