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Interest on loan taken for making investment u/s 54 EC

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(Querist)
14 November 2009 Hi,

My query is.Can i take a loan to make investment u/s 54 EC, If the amount of consideration is not received. If yes, Then will that interest on loan taken will qualify as deduction against the interest accrued on bond purchased u/s 54 EC.

Regards.
Ram Das Garg.
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Bhaskaran Chackrapani Warrier

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Bhaskaran Chackrapani Warrier (Expert)
14 November 2009 Bomaby High Court in CIT vs Dr.P.S.Pasricha decided that for claiming benefit under s. 54(1), law does not make it mandatory that the assessee must use the same funds as received from sale. The source of funds is not relevant.

The same analogy can be applied in section 54EC also.

Set off of interest will not be allowed in view of the decision in

CIT Vs. Dr. V.P Gopinathan (2001) 248 ITR 449 (SC).
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