Case Law Details
CA Sandeep Kanoi
Issue -Whether for the purpose of Section 54EC of IT Act, 1961, the period of investment of six months should be reckoned after the date of transfer or from the end of the month in which transfer of capital asset took place?
Brief Facts :- Assessee in individual capacity has sold a flat situated at Lotus Co-operative Society, Usmanpura Ahmedabad for a consideration of Rs.64 lacs. The appellant had computed the Capital Gain at Rs.Nil and declared the same as per the Return of Income. A working of the Capital Gain was admittedly furnished along with the return of income. The basis for “Nil” capital gain was that the gain was stated to be at Rs.56,65,767/- however the assessee had made the investment in NHAI bond of Rs.45 lacs and claimed the deduction u/s.54 EC of IT Act. The assessee has also made an investment in “capital gain account scheme” of Rs. 12 lacs, not in controversy.
Contention of the Revenue
The AO has referred the provisions of Section 54EC of IT Act and thereafter discussed that a sale document was registered on 10th of June, 2008; hence, the assessee was required to purchase the NHAI bond within six months from the said date of registration, i.e., 10th June, 2008. However, the assessee had purchased the NHAI bond on 17th of December, 2008, alleged by the AO. A show cause was issued as to why the claim of exemption be not disallowed in respect of the investment made in NHAI bond in the light of the provisions of Section 54EC of IT Act being not invested within six months.
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