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Sec. 54EC exemption for investment of Rs. 50 Lach each in 2 Financial Years but within 6 M from transfer date
Case Law Details
- Case Name
- Smt. Sriram Indubal Vs The Income Tax Officer (ITAT Chennai)
- Appeal Number
- Only available for paid members
- Date of Judgement/Order
- Only available for paid members
- Related Assessment Year
- 2008- 09
- Courts
- All ITAT, ITAT Chennai
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If the assessee is able to keep the six months’ limit from the date of transfer of capital asset, but, still able to place investment of Rs. 50 lakhs each in two different financial years, we cannot say that the restrictive proviso will limit the claim to Rs. 50 lakhs only. Since assessee here had placed Rs. 50 lakhs in two different financial years but within six months period from the date of transfer of capital asset, assessee was definitely eligible to claim exemption upto Rs. 1 Crore. The same view has been taken by Ahmedabad Bench of this Tribunal in the case of AspiGinwala & O...
WHAT IS PRESENT STATUS AS PER NEW FINANCE BILL 2014 IN SUCH CASES?
There r byb HC jugment on this issue in fevour of assesee
The aforesaid decision would be beneficial to such assessees who has sold the property between 1st Oct. to 31st Mar. of any financial year. The counter arguement could be that the statute should not give benefit only to one class of assessees while depriving the others of any beneficial treatment. In any case, the law should be clear enough to avoid such controversies in the best interest of the taxpayers.
This anomaly in law is to be corrected. How is that who sells a property in the later part of a year is given benefit Rs. 1 Crore and who sells in the earlier part of the year is given only Rs. 50 Lakhs? Denial of benefit since the period of six months has elapsed within the year of sale may not be the intention of law.
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As per 54EC (1) exemtpion during the financial year shall not exceed Rs. 50 Lac.
Said proviso mentions that investment on which an assessee could claim exemption under Section 54EC(1) shall not exceed Rs. 50 lakhs during a financial year.
The point of issue in the reported case is centered on the interpretation / construction of the Proviso to sub-section (1) of section 54 EC. The Chennai Bench has, following the Ahmedabad Bench, has taken a view in favour of the assessee. In doing so, the contrary view of the Jaipur Bench, however, as is seen, not been cited by the Revenue, hence not gone into. Be that as it may, it calls for a special noting that, unlike in the other two cases , the Jaipur Bench, in forming its opinion, has called to aid, rightly so, the relevant principles of interpretation of a ‘Proviso’, as enuncited by case law (see paragraphs 3.1 and 3.2 of its order), and accordingly decided the issue. In one’s individual opinion, the Jaipur Bench has to be regarded to have taken the right view;and in any event, the better view.
Recommend for an independent study, the expert commentary in Palkhivala’s text book and case law cited, on the two relevant topics of , -“Principles of Beneficial Interpretation” and “Internal Aids to Construction – Provisos”.
Though the assessee had purchased bonds worth one crore in two financial years but what about the assessment year. Asstt. Year will remain one. How deduction of one crore can be allowed?