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TMI Blog2015 (5) TMI 1161X X X X Extracts X X X X X X X X Extracts X X X X ..... e) unsold shops shown as Stock-in-trade. 2. "The Ld. CIT(A) has grossly erred in law as well as on facts in confirming the action of A.O. in restricting the claim of deduction u/s.54EC of the I.T.Act to Rs. 50,00,000/- as against Rs. 1 Crore claimed by the Appellant." 2. Rival contentions have been heard and record perused. The assessee is engaged in the business of construction and development. During the course of scrutiny assessment the AO found that assessee has three shops as stock-in-trade as at the end of the year. The AO computed the income in respect of all the three shops u/s.23 as income from house property. The contention of the assessee was that three shops at the end of the year was its trading assets cannot be charged to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erest on interest-free security deposit can be taken as a determinative factor to arrive at the fair rent-Provisions of s. 23(1)(a) do not mandate this. Since the provisions of fixation of annual rent under the Delhi Municipal Corporation Act are pari materia with s. 23 of the IT Act, the annual value fixed by the municipal authorities can be a rational yardstick subject to the condition that the year in which the annual value was fixed bears a close proximity with the assessment year in question. If there is a change in circumstances because of passage of time, the annual value fixed by the municipal authorities at a much earlier point of time on the basis of rent then received may not provide a safe yardstick. Thus, in a given case, AO ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income from business shown by the assessee was held to be not justified. The Hon'ble Supreme Court held that since the assessee company's main object, is to acquire and held properties and to let out these properties, the income earned by letting out these properties is main objective of the company, therefore, rent received from the letting out of the properties is assessable as income from business. On the very same analogy in the instant case, assessee is engaged in business of construction and development, which is main object of the assessee company. The three flats which could not be sold at the end of the year was shown as stock-in-trade. Estimating rental income by the AO for these three flats as income from house property was not j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 31.3.2009 and Rs. 50 lacs on 30.4.2009. However, the AO did not allow exemption in respect of Rs. 50 lakhs invested on 30-4-2009 on the plea that limits prescribed u/s.54EC relates to transaction and not to the financial year. By the impugned order, the CIT(A) confirmed the action of the AO. 7. We have considered rival contentions and found that the issue is squarely covered by the decision of the Hon'ble Madras High Court in the case of CIT Vs. C.Jaichander & Sriram Indubal, T.C.(A).Nos.419 and 533 of 2014, vide order dated 15-9-2014, held as under :- "11. In any event, from a reading of Section 54EC(1) 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 investm ..... X X X X Extracts X X X X X X X X Extracts X X X X
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