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TMI Blog2020 (11) TMI 211X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment year 2008-09. Both the assessees have filed stay applications also. Since the issue contested in their respective appeals is identical in nature, both the appeals were heard together and are being disposed of by this common order. 2. In both the appeals, the assessees are contesting following issues:- (a) Validity of reopening of assessment. (b) Addition made by way of disallowance of claim made u/s. 54EC of the Act. 3. The Ld A.R. submitted that Smt. Hiriyur Nagaraj Savithri is the wife of Shri B. Vishwanath. Both the assessees herein and the mother of Shri Vishwanath named B K Lalithamma held entire issued share capital numbering 1895 equity shares in a company named M/s. PAL Technology Private Limited. By an agreement dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d into the bank account of above said company on 01-10-2008 and bonds were allotted on 31.10.2008. It is pertinent to note that Shri B. Vishwanath has claimed Rs. 50.00 lakhs u/s. 54EC of the Act and Smt. Hiriyur Nagaraj Savithri has claimed Rs. 19.00 lakhs u/s. 54EC of the Act. 6. The AO, however, took the view that the transfer is deemed to have taken place in September, 2007 and hence the capital gain is assessable in AY 2008-09. He also noticed that the investment in bonds has not been made within the stipulated time prescribed in sec. 54EC and hence both the assessees are not eligible for deduction u/s. 54EC of the Act. It is pertinent to note that the investment in bonds should be made within six months from the date of transfer as p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee has declared long term capital gains and claimed deduction u/s. 54EC of the Act in AY 2009-10. The AO, in the reasons for reopening, has taken the view that the capital gains is assessable in AY 2008-09. Hence, the correct course of action as per the reasons for reopening was that the AO should have assessed long term capital gains in AY 2008-09. We notice that the AO has not assessed the capital gains in assessment year 2008-09. Instead, he has disallowed claim of deduction made u/s. 54EC of the Act in assessment year 2008-09, while the assessee has actually claimed the said deduction in AY 2009-10. Hence the question of disallowing claim made u/s. 54EC of the Act shall arise only in assessment year 2009-10 and not in AY 2008-09. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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