Exemption u/s. 54EC cannot be denied to assessee due to deeming fiction created U/s. 50

Issue – The assessee- respondent for the Assessment Year 2007- 08 had filed the return of income. Assessee Company had sold ‘Automatic Electric Load Monitoring System’ for the sum of Rs. 240 lacs and the assessee had invested the gain amount in Rural Electrification Bonds and claimed exemption under Section 54EC. On scrutiny of the assessment under Section 143(3) of the Act, the Assessing Officer found that short term capital gain was offered by the assessee in respect of Automatic Electric Load Monitoring System under Section 50 of the Act being

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