Case Law Details
ACIT Vs Shri Raj Kumar Jain & Sons (HUF) (ITAT Jaipur)
S. 54EC investment within 6 months is the investment for that financial year in which transfer has taken place
S. 54EC investment within 6 months is the investment for that financial year in which transfer has taken place. Hence, subsequent investment is to be considered as part of the investment of financial year in which transfer has taken place.
Assessee sold a property on 13-12-2007 and disclosed capital gain – Assessee invested said capital gain amounting to Rs. 1 crore in specified capital gain bond (i.e., Rs. 50 lakhs on 31-3-2008 + Rs. 50 lakhs on 10-6-2008) and claimed exemption under section 54EC – Assessing Officer by relying upon proviso to section 54EC held that assessee having made a claim of Rs. 1 crore, exceeded investment limit prescribed in proviso and, accordingly, restricted deduction to Rs. 50,00,000 – On appeal, Commissioner (Appeals) held that investment of Rs. 50,00,000 each had been made during two financial years, i.e., financial years 2007-08 and 2008-09, and in either of two cases, investment was made within time-limit of six months from date of transfer and, therefore, assessee was entitled to deduction of Rs. 1,00,00,000 under section 54EC.
As per Section 54EC, the profits or gains arising from the transfer of a capital asset is to be dealt with as per Section 54EC, in case the assessee has invested the whole or any part of the capital gain in the long term capital specified asset. Thus deduction is eligible to the investment. The proviso to Section 54EC provides that an investment made on or after the first date of April, 2007 in the long term specified asset by an assessee during any financial year does not exceed Rs. 50.00 lacs. Hence, the investment should not exceed Rs. 50.00 lacs. The proviso was introduced by the Finance Bill, 2007. In the memo explaining the provision of finance bill, 2007, it has been mentioned as under:-
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