Eligible amount for ded. u/s. 54ec

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rakesh sharma (Querist)
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02 January 2013 whether benefit of sec. 54 EC can be claimed on deposit of rs. 1.00 crore i.e. rs. 50 lacs each in two F.Y. Property is sold on 01/01/2013

Anand

Anand (Expert)
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02 January 2013 In my view it is possible. Certain courts have also held in favor. However, there is a dissenting judgment too.

In Vivek Jairazbhoy Vs DCIT the Bangalore ITAT has held that S. 54EC limit of Rs. 50L does not apply to the transaction but financial year. Cheque has to be issued within 6 months. Encashment of Cheque & Allottment of Bonds beyond 6 months is irrelevant.

in Aspi Ginwala Vs ACIT, the Ahmedabad Tribunal has held the same wherein50 Lakhs was invested in two separate years

However, the Jaipur ITAT has dissented in its judgment rendered in ACIT Vs Raj Kumar Jain & Sons (HUF) where it held that S. 54EC limit of Rs. 50L applies to the transaction & not financial year. the investment has to be linked to the financial year in which transfer has taken place and the claim for deduction cannot exceed Rs. 50 lakhs.

So you have to weigh the risk as both interpretations are possible. If you are capable of handling the probable litigation you should take an aggressive stand.