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Income Tax Appellate Tribunal, MUMBAI BENCH “C”, MUMBAI
Before: SHRI C.N. PRASAD, HONBLE & SHRI MANOJ KUMAR AGGARWAL, HONBLEShri Sanjay Johri Shri Nitesh Joshi Shri Rajat Mittal
O R D E R PER C.N. PRASAD (JM) 1. This appeal is filed by the Revenue against the order of the Ld.CIT(A)–6, Mumbai dated 27.04.2016 for the Assessment Year 2011-12. The only issue in the appeal of the Revenue is Ld.CIT(A) erred in allowing the deduction of ₹.1,00,00,000/- u/s. 54EC without appreciating that as per the provisions of section 54EC only investments to the extent of ₹.50 Lakhs can be made.
(A.Y: 2011-12) Shri Sanjay Johri 2. At the outset the Learned Counsel for the assessee submitted that the issue in appeal is squarely covered by the decision of the Hon'ble Madras High Court in the case of CIT v. Coromandel Industries Ltd. [370 ITR 586] and the decision of the Coordinate Bench in the case of DCIT v. Nilesh Ramesh Ganjwala in ITA.No. 7112/Mum/2014 dated 27.04.2017. Referring to these decisions, Learned Counsel for the assessee submitted that, it has been held that from the reading of section 54EC(1) and the first proviso, it is clear that the time limit for investment is six months from the date of transfer and even if such investments falls under two Financial years, the benefit claimed by the assessee cannot be denied. Learned Counsel for the assessee further submitted that provisions of section 54EC(1) were amended by inserting second Proviso w.e.f. 01.04.2015 restricting the exemption to ₹. 50 Lakhs only in both the financial years and this proviso was held to be prospective and applicable from the Assessment Year 2015-16 onwards. Hence the Learned Counsel for the assessee submitted that prior to amendment when assessee makes investments of ₹.1,00,00,000/- in two Financial Years still assessee is entitled for deduction of entire investment of ₹.1,00,00,000/- u/s. 54EC of the Act, in view of the above decisions.
(A.Y: 2011-12) Shri Sanjay Johri 3. Ld. DR vehemently supported the order of the Assessing Officer and submitted that the assessee is entitled for exemption only to the extent of ₹.50 Lakhs as per the provisions of section 54EC and not the entire ₹.1,00,00,000/-.
We have heard the rival contentions, perused the orders of the authorities below. The only issue to be adjudicated is, as to whether the assessee is entitled for exemption u/s. 54EC at ₹.1,00,00,000/-, when the investment was made in two financial years at ₹.50 Lakhs each. Assessee made investments of ₹.50 lakhs in bonds of Rural Electrification Corporation on 20.02.2011 and ₹.50 Lakhs in National Highways Authority of India on 30.04.2011 and the entire ₹.1,00,00,000/- claimed as exemption u/s. 54EC of the Act. The Assessing Officer denied the exemption observing that as per the provisions of section 54EC assessee is entitled for exemption only to the extent of ₹.50 Lakhs and not the entire ₹.1,00,00,000/-.
On appeal, Ld.CIT(A) referring to the decisions of the Hon'ble Madras High Court in the case of CIT v. Coromandel Industries Ltd. (supra) and CIT v. C. Jayander [370 ITR 579] and the decision of the Mumbai Bench in the case of Rati Anil Virwani v. ACIT in ITA.No. 817/Mum/2013, wherein it has been held that as per the provisions of (A.Y: 2011-12) Shri Sanjay Johri section 54EC the assessee is entitled for deduction of ₹.1,00,00,000/-, when the assessee is satisfied both the conditions of investment in specified bonds of ₹.50 Lakhs in each Financial Year and the said investment is within the period of six months, assessee is entitled for exemption u/s. 54EC, Ld.CIT(A) allowed the claim of the assessee.
We also find that an identical issue has been decided by the Coordinate Bench in the case of DCIT v. Nilesh Ramesh Ganjwala (supra) following the decision of the Hon'ble Madras High Court in the case of CIT v. C. Jayander (supra), in favour of the assessee, holding that it was permissible on the part of the assessee to make investment of ₹.1,00,00,000/- split into ₹. 50 Lakhs each in two financial years. We also find that similar view has been taken by the Hon'ble Madras High Court in the case of CIT v. Coromandel Industries Ltd. (supra). In the circumstances respectfully following the said decisions, we uphold the order of the Ld.CIT(A) and reject the ground of the Revenue.
In the result, appeal of the Revenue is dismissed.