Arun Kumar B M , Bangalore vs. Income Tax Officer Ward-5(3)(5), Bangalore

This case involves an appeal by Sri Arun Kumar B M concerning a deduction claimed under Section 54EC of the Income Tax Act. The assessee had invested Rs 1 crore in REC bonds to offset capital gains from selling a plot of land. However, the Assessing Officer and the CIT(A) restricted the deduction to Rs 50 lakh, citing investment limits per financial year and amendments to the Act. The Tribunal has recalled its earlier order to reconsider the Section 54EC deduction.

IN THE INCOME TAX APPELLATE TRIBUNAL
BANGALORE BENCHES “B”, BANGALORE

Before Shri George George K, JM & Shri B.R.Baskaran, AM

ITA No.667/Bang/2017 : Asst.Year 2013-2014

Sri Arun Kumar B M #37, I A Cross,Udayaravi Veerappa Road Hanumanthnagar Bangalore - 560 019.PAN : AHDPA9846L.
(Appellant) 

vs.

The Income Tax Officer Ward 5(3)(5) Bengaluru.
(Respondent)

Appellant by : Sri.L.Bharath C.A.
Respondent by : Sri.Priyadarshi Mishra, JCIT-DR
Date of Hearing : 03.11.2020
Date of Pronouncement : 03.11.2020

O R D E R

Per George George K, JM :

This appeal was originally disposed of by the ITAT vide its order dated 19.02.2020. However, the assessee filed M.A.No.74/Bang/2020 to recall the Tribunal order, insofar as the issue regarding to deduction u/s 54EC of the I.T.Act. The Tribunal vide its order dated 21.08.2020 in MA No.74/Bang/2020, recalled its earlier order dated 19.02.2020, insofar as the issue concerning deduction under section 54EC of the I.T.Act.Accordingly, this case was heard today, i.e., on 03.11.2020.

2. The brief facts of the case are as follow: The assessee is an individual and employee of M/s.Tata Consultancy Services Limited. During the relevant assessment year, the assessee sold a plot on 20.03.2013 for Rs.2,25,00,000 and declared Rs.83,102 as long term capital gains. The assessee had claimed the following claim of deductions:-

(i) deduction u/s 54F of the I.T.Act by depositing Rs.1,22,00,000 in the capital gains account scheme on 31.07.2013 towards purchase of a new residential property.

(ii) deduction u/s 54EC of the I.T.Act by investing Rs.1,00,00,000 in REC Bonds amounting to Rs.50 lakh each on 31.03.2013 and 31.07.2013,respectively, within six months from the date of transfer.

3. The assessment was completed u/s 143(3) of the I.T.Act vide order dated 26.02.2016. In the said assessment order, the claim of deduction u/s 54EC of the I.T.Act was restricted to Rs.50 lakh instead of Rs.1 crore claimed by the assessee. The Assessing Officer held that the assessee is required to invest Rs.50 lakh in REC Bonds in any financial year. The Assessing Officer also relied on the amendments made to section 54EC of the I.T.Act vide Finance Act, 2014 w.e.f. 01.04.2015.

4. Aggrieved by the order of the Assessing Officer, the assessee preferred an appeal to the first appellate authority.The CIT(A) confirmed the view of the Assessing Officer in restricting the claim of deduction u/s 54EC of the I.T.Act to Rs.50 lakh.

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