Deduction u/s 54 EC applicable within Six Calendar Months from date of Transfer of Property and not within 180 days: ITAT [Read Order]

Deduction us 54 EC - ITAT - taxscan

The Income Tax Appellate Tribunal (ITAT), Delhi Bench presided by Mr. Anil Chaturvedi, Accountant Member,and Shri N.K. Choudhry, Judicial Member has held that deduction u/s 54 EC is applicable within six calendar months from the date of transfer of property and not within 180 days.

The appellant, Mr.Naresh Chand by executing a sale deed jointly sold a piece of land and received consideration in two parts i.e. Rs.42.93lacs on 02.08.2013 and Rs.95.84 lacs on 15.04.2014. For availing exemption u/s. 54EC of the Act, the Assessee made an application for NHAI bonds of Rs.50 lakhs on dated 29.04.2014 and consequently, got allotted the bonds to the tune of Rs.50 lacs on dated 30.04.2014 and accordingly claimed exemption u/s. 54EC of the Act qua amount of Rs. 50,00,000/-.

The Assessing Officer denied the claim of exemption alleging that investment in the bond was made after the expiry of six months. The aggrieved appellant filed an appeal before CIT(A), which affirmed the order of the Assessing Officer. Thus, the appellant filed an appeal before ITAT.

The Tribunal observed that under the provision the investment can be made as a whole or in part of the capital gains. As per section 54EC of the Act, the period of investment starts from the date of transfer and not from the date of receipt of consideration.By relying on the decision of Coordinate Benches of the Mumbai Tribunal in the case of Neela S. Karyakarte vs. ITO ‘six months’ means ‘six calendar months’ and not 180 days.

The Tribunal has held that “the sale deed was made in October 2013 therefore, the Assessee was supposed to invest u/s. 54EC of the Act within ‘six calendar months’ starting from November onwards and up to April 2014, which in the instant case has been done by the Assesseeon dated 30.04.2014, accordingly, the Assessee is entitled to get the benefit of exemption u/s. 54EC of the Act. Consequently, the addition of Rs.50 lacs was made by the Assessing Officer and affirmed by the Commissioner is deleted”.

Adv. Mr. A.S. Rawat and Mr. PramodVerma appeared on behalf of the appellant and respondent.

Subscribe Taxscan Premium to view the Judgment

Buy books of essential tax practice with exciting offers at shopscan.in

taxscan-loader