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Sec.54EC as investment was made within the period of six months from the date of transfer and relied on the Tribunal decisions. But the Assessing Officer though accepted Tribunal decision in the cases of Coromandel Industries (P) Ltd vs. ACIT, Company Circle I(3), Chennai 36 taxmann.6 (Chennai) and Smt. Sriram Indubal vs. ITO 32 taxmann.com 118 (Chennai) as under:-

"The ITAT has held that the first condition mentioned in section 54EC(1) is that the investment has to be made within a period of six months from the date of transfer of capital asset. Said proviso mentions that investment on which an assessee could claim exemption under section 54EC(1) shall not exceed ₹.50 lakhs during a financial year. So the exemption provision has to be construed not transaction wise but, financial year wise. Explanatory memorandum does say that limitation has view to ensure equitable distribution of benefits among the prospective investors. Last sentence of the Explanatory memorandum clearly states that the exemption for investment cannot exceed ₹50 lakhs in a financial year. Since the assessee here has placed ₹50 lakhs in two difference financial years but within six months period from the date of transfer of capital assets, assessee was definitely eligible to claim exemption upto ₹1 crore''.

The ld. Assessing Officer based on the action of Department in filing an appeal in High Court, disallowed exemption of =50,00,000/- and assessed total income of =.6,48,77,528/- and raised demand. Aggrieved by the order of Assessing Officer, the assessee filed an appeal before Commissioner of Income Tax (Appeals).

                                      :- 5 -:               ITA No.2254/Mds /2015.




5.        In     the     appellate   proceedings,    the      ld.    Authorised

Representative of assessee explained the facts and argued the grounds and supported his arguments with judicial decisions and produced supporting documents in respect of sale of shares and allotment letter of REC bonds u/sed. 54EC of the Act as on 31.03.2011 and second allotment letter dated 30.04.2011. The ld. Commissioner of Income Tax (Appeals) considered the submissions on the provisions of Sec. 54EC of the Act and Department circular no.3/2008 and but made distinction on the decision relied by the assessee and deferred the judgment of High Court and come to a unilateral conclusion that assessee is eligible only for =50,00,000/- as investment u/sec. 54EC of the Act and concurred with the findings of the Assessing Officer and dismissed the appeal of the assessee. Aggrieved by the order of Commissioner of Income Tax (Appeals), the assessee filed an appeal before Tribunal.

6. Before us, the ld. Authorised Representative urged the grounds and explained that there is no dispute on calculation of long term capital gains and investments by the assessee except understanding the provisions of Sec.54EC (1) of the Act were assessee has made investments in REC bonds of =50,00,000/- each on :- 6 -: ITA No.2254/Mds /2015.

14.03.2011 and 27.04.2011 in two financial years. The ld. Assessing Officer and Commissioner of Income Tax (Appeals) has expressed his own opinion in interpreting the definition and the dictionary meaning of ''any'' in the provisions further Assessing Officer suo-motu took the decision by distinguishing judicial decision and restricted =50,00,000/- is for one financial year only and excess claim was disallowed. The provisions of Sec. 54EC of the Act are beneficial provision and to be construed liberally. The investment by the assessee in Sec. 54EC Bonds within the period of six months from date of sale of property is as per law and supported the submissions with the jurisdictional High Court decisions and prayed for allowing the appeal.

11. The ld. Authorised Representative has filed and explained elaborately by petition dated 16.10.2015 on the facts with judicial decisions. At the time of hearing assessee submitted copy of allotment letter of REC bonds of =50,00,000/- as on 31.03.2011 to Luka and Nethra and another =50,00,000/- allotted on 30.04.2011 and also produced copy of assessment orders of the minor children were deduction u/s.54EC of the Act was restricted only to =50,00,000/- instead of =1,00,00,000/-. The contention of the ld. Authorised Representative that the clubbing provisions u/sec. 64(1A) of the Act shall be applicable on aggregating of total income after allowing exemption u/s.54EC of the Act. The ld. Commissioner of Income Tax (Appeals) considered the submissions on denial of exemption u/s.54EC of the Act of two minor children and enhancement u/s.251(1) of the :- 10 -: ITA No.2254/Mds /2015.