Arun Kumar B M Vs ITO (ITAT Bangalore)
The Assessing Officer held that the assessee is required to invest Rs.50 lakh in REC Bonds in any financial year. The Assessing Officer also relied on the amendments made to section 54EC of the I.T.Act vide Finance Act, 2014 w.e.f. 01.04.2015.
Assessee has filed this appeal before the Tribunal. The learned Counsel for the assessee submitted that Rs.1 crore has been invested within six months from the date of sale of the asset, which has given rise to long term capital gains. Accordingly, it was submitted that prior to the amendment to section 54EC of the I.T.Act w.e.f. 01.04.2015, the assessee was entitled to the entire claim of deduction of Rs.1 crore.
As per the provisions of section 54EC(1) of the I.T.Act and its first proviso, it is clear that the time limit for investment is six months from the date of transfer and even if such investment falls under two financial years, the benefit claimed by the assessee cannot be denied. The amendment in Finance (No.2) Act, 2014 relates to assessment year 2015-2016 [i.e. insertion of second proviso to section 54EC(1)] and the same applies prospectively for and from assessment year 2015-2016.
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