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TMI Blog2022 (3) TMI 248X X X X Extracts X X X X X X X X Extracts X X X X ..... OUDHRY, JUDICIAL MEMBER For the Appellant : Manoj Kumar, Ld. CA For the Respondents : Manu Chourasia, Ld. Sr. DR ORDER Per N. K. Choudhry, JM 1. This appeal has been preferred by the assessee against the order dated 21.11.2017 impugned herein passed by the ld. Commissioner of Income Tax (Appeals)-2, Noida {hereinafter called in short as the ld. Commissioner } u/s. 250(6) of the Income Tax Act, 1961 (in short the Act ) for the assessment year 2009-10. 2. In this case the Assessee had filed his return of income on dated 15.02.2011 by declaring total income of ₹ 2,18,99,694/-, which was processed u/s. 143(1) of the Act. Thereafter, the case of the Assessee was selected on the basis of AIR information, wherein i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch specified assets to avail exemption u/s. 54EC on or after 1st day of April, 2007 will not exceed ₹ 50 lakhs in financial year. Resultantly, the AO observed that as the Assessee has sold two assets while the section 54EC allows only one (as per plain reading of the sentence a long terms capital asset). Thus, the deduction claimed in case of two assets cannot be allowed. Ultimately, the AO allowed the investment to the tune of ₹ 50 lakhs only and disallowed another ₹ 50 lakhs as claimed by the Assessee as investment on 26.06.2010. The AO also referred to new provision in section 54EC of the Act, which was inserted by Finance (No. 2) Bill, 2014 in the Act w.e.f. 1-4-2015, wherein it is provided that the investment made by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... where two interpretation of section 54EC are possible. The earlier notification of the Govt. clearly suggested that the Assessees are entitled exemption to the extent of ₹ 50 lakhs u/s. 54EC of the Act. Investment within six months is the investment in that financial year in which transfer has taken place. Hence, subsequent investment is to be considered as part of investment of Financial Year in which transfer has taken place. We, therefore, hold that ld. Commissioner was not justified in allowing deduction to the Assessee to the extent of ₹ 1 crores u/s. 54EC of the Act. 4. Against the impugned order the Assessee is in appeal before us. 5. Heard the parties and perused the material available on record. The issue involv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Provided that the investment made on or after the 1st day of April, 2007 in the long-term specified asset by an Assessee during any financial year does not exceed fifty lakh rupees.] The following second proviso shall be inserted after the existing proviso to sub-section (1) of section 54EC by the Finance (No. 2) Act, 2014, w.e.f. 1-4-2015: Provided further 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. 5.1. It is the case of the Assessee that the Assessee was supposed to i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tinguished the decision of the ITAT Jaipur bench of this Tribunal in case of Sri Raj Kumar Jain sons HUF (supra) as relied upon by the Ld. Commissioner, but also followed the judgment of Madras High Court in case of CIT Vs. Coromandal Industries Ltd. (2015) 56 taxmann.com 209/230 decided on 14.12.2016 wherein, it was held as under:- The legislature has chosen to remove the ambiguity in the proviso to Section 54EC(1) of Act by inserting a second proviso with effect from 1.4.2015. The memorandum explaining the provisions in the Finance (No. 2) Bill, 2014 also states that the same will applicable from 1.4.2015 in relation to assessment year 2015-16 and the subsequent years. The intention of the legislature probably appears to be that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... obably appears to be that this amendment should be for the assessment year 2015-2016 to avoid unwanted litigations of the previous years. Therefore, the observation of the AO qua application of the amended provision to the case in hand is un-sustainable. 5.5. Considering the peculiar facts and circumstances of the case to the effect that time limit for investment of long-term capital asset, is six months from the date of transfer and even if such investment falls under two financial years the benefit of investment of ₹ 50 Lakhs individually in each financial year as claimed by the Assessee herein, cannot be denied. Consequently, the order under challenge is liable to be set aside while allowing appeal of the Assessee, hence ordered ..... X X X X Extracts X X X X X X X X Extracts X X X X
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