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TMI Blog2019 (5) TMI 1641X X X X Extracts X X X X X X X X Extracts X X X X ..... Bonds within the stipulated period of six months as provided u/s 54EC as it was not possible on the part of the assessee to do so due to non availability of the bonds. That being the case, the claim of deduction in respect of balance amount of ₹ 50 lakh cannot be disallowed since the assessee has demonstrated that non investment in REC Bonds within the stipulated period was due to non availability of bonds in the market. This view of ours is supported by the decision of the Hon'ble Jurisdictional High Court in case of CIT Vs. Celloplast [ 2012 (8) TMI 527 - BOMBAY HIGH COURT] Therefore, the delay in investment has to be condoned as the assessee cannot be expected to do or perform an impossible act. Whether the claim of deduction u/s 54EC is available if the investments are spread over two financial years ? - HELD THAT:- We are of the considered opinion that there was no bar in section 54EC for allowing deduction in respect of investment made in two financial years. The provision as contained in section 54EC r/w its proviso would make it clear that the cap is with regard to the amount to be invested in a particular financial year and it does not restrict the cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 54EC of the Act, called for necessary details from the assessee. From the details furnished, he found that in the previous year relevant to the assessment year under dispute, more precisely, on 19th December 2006 the assessee had transferred a capital asset, being lease hold interest in land, for a consideration of ₹ 1,32,50,000. Further, he noticed that against the aforesaid sale consideration, the assessee had claimed deduction of ₹ 1 crore under section 54EC of the Act towards investment made in REC Bonds. However, from the details furnished, the Assessing Officer found that the investment made in REC Bonds was made in two tranches i.e., ₹ 50 lakh on 31st March 2008 and further ₹ 50 lakh on 1st August 2008. Referring to the provisions of section 54EC of the Act, the Assessing Officer observed that for claiming deduction under the said provision, the assessee had to make the investment within a period of six months from the date of transfer of the capital asset. Since, the first investment of ₹ 50 lakh was made on 31st March 2007, i.e., within six months from the date of transfer of the capital asset, he allowed ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent made should be allowed as deduction. To demonstrate that REC Bonds were not available, during the period from 1st April 2007 to 18th June 2007, learned Authorised Representative drew our attention to various documentary evidences furnished in the paper book. Further, learned Authorised Representative submitted, the allegation of learned Commissioner (Appeals) that the assessee did not invest the entire amount of ₹ 1 crore during the availability of REC Bonds till 31st March 2007, is without any basis because the maximum amount one could invest as per the condition imposed was ₹ 50 lakh. She submitted, even though the investments were made in two financial years, but the assessee still can claim exemption under section 54EC of the Act as per the provisions applicable to the impugned assessment year. In support of her contention learned Authorised Representative relied upon the following decisions: i) CIT v/s Celloplast, [2012] 253 CTR 246 (Bom.); ii) Aspi Ginwala v/s ACIT, ITA no.3226/Ahd./2011, dated 30.03.2012; and iii) Vivek Jairaz Bhoy v/s DCIT, ITA no.236/Bang./2012, dated 14.12.2012. 6. The lear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able between the period from 22nd January 2007 to 31st March 2007, the maximum amount one can invest was ₹ 50 lakh. Therefore, the assessee could not have invested the amount of ₹ 1 crore in REC Bonds. On a perusal of the material placed on record, we find the aforesaid contention of the assessee acceptable. As per the condition of section 50EC Series VIA Bonds, the maximum amount one can invest is ₹ 50 lakh. Therefore, the assessee could not have invested more than ₹ 50 lakh in the said Bonds on 31st march 2007. This restriction was also as per the conditions imposed by the CBDT in its notification issued on 29th June 2006. Undisputedly, after 31st March 2007, REC Bonds were not available in the market and REC Bonds Series VII was again available from 2nd July 2007 to 31st March 2008. It is a fact that the assessee had invested further amount of ₹ 50 lakh on 01.08.2007 after REC Bond Series VII became available. In the meanwhile, the six month period from the date of transfer of the capital asset expired on 18th June 2007. Therefore, the assessee could not have invested in the REC Bonds within the stipulate ..... X X X X Extracts X X X X X X X X Extracts X X X X
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