LP.LP.AN.ANNAMALAI,KOTTAIYUR vs. ITO, KARAIKUDI

This appeal of the assessee is directed against the order of CIT(A), Madurai dated 06.06.2011 and pertains to Assessment Year 2007-08.

Shri S.Sridhar, the learned counsel for the assessee submitted that during the year under consideration, the assessee sold certain lands at Porur for a total consideration of Rs.5,62,61,500/- and the long term capital gain was determined at Rs.5,01,42,514/-. The assessee has deposited Rs.50,00,000/- in Rural Electrification Corporation Ltd. Bonds as required under Section 54EC of the Act. The assessee claimed exemption in respect of the entire amount. The CIT(A) by referring to a notification issued by CBDT dated 22.12.2006, allowed the claim of the assessee to the extent of Rs.50,00,000/-. In fact, the assessee intended to deposit the entire amount in the bond issued by Rural Electrification Corporation Ltd. However, in view of the restriction placed by the CBDT in the notification dated 22.12.2006, fixing the limit of Rs.50,00,000/-, the assessee could not deposit the same in the Rural Electrification Corporation Ltd. bonds. The assessee intended to approach the CBDT to extend the monetary limit. Therefore, the learned counsel submitted that the assessee may be permitted to approach the CBDT for extending the monetary limit to deposit in the bond issued by Rural Electrification

On the contrary, Shri Balasubramanian, the learned representative for the department submitted that the CBDT by notification dated 22.12.2006 fixed the maximum limit of Rs.50,00,000/-

We have considered the rival submissions on either side and perused the relevant material available on record. The CIT(A) admittedly allowed the claim of the assessee to the extent of Rs.50,00,000/- which was said to be invested in the bonds issued by Rural Electrification Corporation Ltd. To that extent, the assessee has no grievance at all. The only grievance of the assessee appears to be that in view of the restriction placed by CBDT in the circular dated 22.12.2006, he could not invest more than Rs.50,00,000/-. This Tribunal is of the considered opinion that the maximum allowable limit under Section 54EC pursuant to the circular issued by CBDT is only Rs.50,00,000/-. Therefore, the same was allowed by the CIT(A). If the assessee has any grievance with regard to maximum limit fixed by CBDT in the circular dated 22.12.2006, it is always open to the assessee to approach the competent authority including the CBDT. There cannot be any restriction for requesting the CBDT to extend the maximum limit for investing in the Rural Electrification Corporation bonds for the purpose of claiming exemption / deduction under Section 54EC of the Act. As on today, the assessee is eligible to deposit only Rs.50,00,000/- to the extent of Rs.50,00,000/- which was deposited by the assessee in the bonds issued by the rural electrification corporation ltd., the CIT(A) has allowed the claim of the assessee. Therefore, this Tribunal do not find any reason to interfere with the order of the lower authority.

However, it is made clear that it is open to the assessee to approach the competent authority including the CBDT for extending the monetary limit for the purpose of claiming deduction under Section 54EC of the Act.

With the above observations, the appeal filed by the assessee is dismissed.