Deduction u/s 54EC allowable on investment after six months if bonds were not available

Brief about the case

In the case of ACIT Vs Shri Kamlakar Moghe it was held by Nagpur Bench of Bombay HC that  deduction u/s 54EC can be claimed by the assessee despite making the investment in REC bonds beyond six months if the delay was due to non-availability of the REC Bonds.

High Court Further held that amount paid to sisters for creating better title over the property and to sell the property peacefully is alloowable expenditure U/s. 48(1) in calculation of Capital Gain on Sale of Property.

Facts of the case:

• The assessee’s mother had executed a will 17.12.1978 which became effective on 18.05.1988 after her death. By that will the assessee received property with clause providing overriding title in favour of his three sisters. In this situation, assessee decided to pay Rs.15 lakh each to his three sisters so that in future they should not claim any right in the property. He also paid an amount of Rs. Five lakh each to his three nieces.
• The assessee then sold the property after entering into a family settlement reduced into writing to avoid future dispute and received the sale consideration on 07.07.2006.
• While calculating the Capital Gains the assessee claimed deduction of the amounts paid to sisters and niece u/s 48 and invested the Capital gain amount of Rs.22 lacs in REC Bonds on 24.01.2007 and further claiming its deduction u/s 54EC.
• Subject to ITAT dismissal, the revenue sought adjudication from the Bombay High Court.
• After hearing both the counsels at length the HC felt that no substantial questions of law arise for determination in this appeal.

Contention of the Revenue