IN HIGH COURT OF DELHI AT NEW DELHI Date of Decision: 19.12.2019 + ITA 991/2019 PR. COMMISSIONER OF INCOME TAX-17 NEW DELHI Appellant Through: Mr. Ajit Sharma, Senior Standing Counsel with Ms. Adeeba Mujahid, Advocate. versus SH. AKSHAY SOBTI Respondent Through: Mr. Salil Kapoor, Mr. Shivansh Pandya, Mr. Sumit Lalchandani and Ms. Ananya Kapoor, Advocates. ITA 992/2019 PR. COMMISSIONER OF INCOME TAX-17 NEW DELHI Appellant Through: Mr. Ajit Sharma, Senior Standing Counsel with Ms. Adeeba Mujahid, Advocate. versus SH. PRADEEP SOBTI Respondent Through: Mr. Salil Kapoor, Mr. Shivansh Pandya, Mr. Sumit Lalchandani and Ms. Ananya Kapoor, Advocates. + ITA 996/2019 PR. COMMISSIONER OF INCOME TAX-17 NEW DELHI ..... Appellant ITA 991/2019, ITA 992/2019 & ITA 996/2019 Page 1 of 23 Through: Mr. Ajit Sharma, Senior Standing Counsel with Ms. Adeeba Mujahid, Advocate. versus SMT. SEEMA SOBTI ..... Respondent Through: Mr. Salil Kapoor, Mr. Shivansh Pandya, Mr. Sumit Lalchandani and Ms. Ananya Kapoor, Advocates. CORAM: HON'BLE MR. JUSTICE VIPIN SANGHI HON'BLE MR. JUSTICE SANJEEV NARULA SANJEEV NARULA, J. (Oral): Caveat No. 1219/2019 in ITA 992/2019 1. Learned counsel for Respondent/caveator has appeared. 2. Accordingly, caveat stands discharged. Caveat No. 1227/2019 in ITA 996/2019 3. Learned counsel for Respondent/caveator has appeared. 4. Accordingly, caveat stands discharged. C.M. No. 53570/2019 (delay) in ITA 991/2019 5. By this application applicant seeks condonation of delay of 39 days in re-filing application. For reasons stated in application, delay is condoned. 6. application stands disposed of in aforesaid terms. C.M. No. 53572/2019 (delay) in ITA 992/2019 ITA 991/2019, ITA 992/2019 & ITA 996/2019 Page 2 of 23 7. By this application applicant seeks condonation of delay of 34 days in re-filing application. For reasons stated in application, delay is condoned. 8. application stands disposed of in aforesaid terms. C.M. No. 53742/2019 (delay) in ITA 996/2019 9. By this application applicant seeks condonation of delay of 39 days in re-filing application. For reasons stated in application, delay is condoned. 10. application stands disposed of in aforesaid terms. ITA 991/2019, ITA 992/2019 & ITA 996/2019 11. present appeals under Section 260A of Income Tax Act, 1961 (hereinafter referred to as Act ) emanate from orders of ITAT in ITA No. 5900/Del/2015 and ITA No. 5901/Del/2015, both dated 10.05.2019 and ITA No. 5899/Del/2015 dated 15.05.2019 dismissing appeals of Revenue, and upholding orders of CIT (A) allowing deductions under Section 54 and 54EC of Act, consequently deleting additions made by Assessing Officer (AO). 12. Though separate assessment orders were framed under Section 143 (3) of Act in respect of each assessee, however since issues involved were common and overlapping, same came to be disposed of by way of consolidated order passed by CIT (A). appeal filed by Revenue against said order resulted in one common order disposing of ITA No. 5900/Del/2015 and ITA No. 5901/Del/2015 dated 10.05.2019 in respect ITA 991/2019, ITA 992/2019 & ITA 996/2019 Page 3 of 23 of assesses - Akshay Sobti and Pradeep Sobti in ITA 991/2019 and ITA 992/2019 respectively. As regards to assessee Seema Sobti (Respondent in ITA 992/2019), appeal of Revenue was decided by way of separate order dated 15.05.2019 in ITA No. 5899/Del/2015. 13. Since issues involved in all appeals are in respect of same Assessment Year (AY) i.e. 2012-13 are common and interconnected, grounds of appeal are also nearly identical, except for difference in figures, same were heard together and are being disposed of by this common order. For sake of convenience, facts in case of ITA 992/2019 are being noted and discussed extensively, and decision would apply mutatis mutandis in all appeals. Brief Facts [ITA 992/2019] 14. facts in brief giving rise to present appeal are that assessee is individual, earning income from house property, business and profession, capital gains and other sources. He filed his return of income for AY 2012- 13 on 31.10.2012, declaring total income of Rs. 8,05,34,659/-, including long term capital gains from sale of property at Jor Bagh, New Delhi on 21.12.2011 for sale consideration of Rs. 13 crores. said property was purchased in Financial Year (FY) 2001-02, as per sale deed dated 19.10.2001, for Rs. 36,16,000/-. After indexation, cost of acquisition was claimed to be Rs. 66,63,286/-, resulting in capital gain of Rs. 12,33,36,714/- against which, assessee claimed deduction under Section 54 of Act for investment in new house property Magnolias DLF Golf Links as per sale agreement dated 10.02.2006. Deductions were also claimed under ITA 991/2019, ITA 992/2019 & ITA 996/2019 Page 4 of 23 Section 54EC of Act. During course of assessment proceedings, assessee submitted detailed computation of capital gains, showing payment of Rs. 2,88,80,619/- to DLF Magnolias up to 31.03.2012, towards cost of property and further payment of Rs. 1,02,16,598/- towards bank interest and loans and cost of improvement on above said property. 15. case of assessee was selected for scrutiny under CASS. Notice under Section 143 (2) of Act was served upon assessee followed by notice under Section 142(1) of Act, along with questionnaire issued on 28.08.2014. 16. assessee complied with said notice and furnished requisite details. AO examined records and books of account and relying upon judgment of this Court in case of Gulshan Malik vs. CIT in ITA No. 55/2014 and CIT v. R.L. Sood (2008) 245 ITR 727 (Delhi) framed assessment under Section 143(3) of Act. He made disallowance of deduction under Section 54 of Act on ground that assessee entered into agreement dated 10.02.2006 and said date of agreement is to be treated as date of acquisition, which falls beyond one year period provided under Section 54 of Act and is also prior to date of transfer. As regards deduction claimed by assessee under Section 54EC of Act amounting to Rs.1,00,00,000/-, AO made disallowance of Rs. 50,00,000/-. Further, AO made addition of Rs.14,07,474/- on account of suppression of maintenance charges under head income from house property received from rented property. ITA 991/2019, ITA 992/2019 & ITA 996/2019 Page 5 of 23 17. assessee filed appeal against assessment orders before CIT (A), and same was allowed vide order dated 21.08.2015 and additions made by AO were deleted. CIT (A) observed that benefit under Section 54 of Act required assessee to purchase residential house property either one year before or within two years after date of transfer of long term capital asset; or if assessee within period of three years after said date has constructed residential house. Relying upon CBDT circular No. 672 dated 16.12.1993, it was held that assessee had booked semi furnished flat at Magnolias DLF Golf Links. In terms of Clause 1.1 of said agreement, assessee was to make payments in installments and builder was to construct unfinished bare shell of flat. Under these circumstances, CIT (A) considered agreement to be case of construction of new residential house and not purchase of flat. It was further observed that since construction has been completed within three years of sale of original asset, fact accepted by AO, assessee was entitled to relief under Section 54 of Act and resultantly, disallowance of Rs. 4,01,93,262/- was deleted. 18. relevant portion of order of CIT (A) reads as under: 6. Ground no.-4 relates to '"disallowance of deduction u/s.54 to extent of Rs.4,00,97,217/- (A.No.496/14-15), 4,10,45,578/- (A.No.494/14-15) and Rs.4,01,93,262/- (A.No.495/14-15) to returned income of Rs.8,05,34,650 (A.No.496/14-15), Rs.2,75,04,910/- (A.No.495/14-15) and Rs. 72,38,440/- (A.No.494/14-15). fact of case is that appellant declared long term capital gain of Rs. 52087347/- (A.Nos.494/14-15) Rs.12,33,36,714/- (A.No.496/14-15) and Rs.71665302/- (A.No.495/14-15) from sale of property at 146, Jorbagh, New Delhi on 21.12.2011 on which he claimed ITA 991/2019, ITA 992/2019 & ITA 996/2019 Page 6 of 23 deduction u/s 54 amounting to Rs.4,00,97,217/- A.No.496/14- 15), 4,10,45,578/- (A.Nb.494/14-15) and Rs.4,01,93,262/- A.No.495/14-15). However, AO disallowed claim on grounds that appellant had entered into agreement dated 10.02.2006 and therefore date of agreement be treated as date of acquisition, which falls beyond period of one year prior to date of transfer prescribed under section 54 of Income-tax Act, following judgment of Honorable Delhi High Court in case of Gulshan Malik Vs. CIT in ITA no. 55 of 2014 and CIT vs R.L.Sood [2008] 109 taxman 227/245 ITR 727 (Delhi), he disallowed claim of appellant. According to Assessing officer, appellant could have purchased house property between 28.12.2010 to 28.10.2011 in order to claim deduction under section 54. Since appellant invested in residential House property namely Dlf Magnolia way back in F.Y. 2005-06 which is clearly outside time period mentioned in section 54 of Income-tax Act, it does not fit in case of exemption under section 54. Assessing officer placed reliance on judgement of Honorable High Court at Delhi in case of Gulshan Malik Vs. CIT in ITA no. 55 of 2014 and CIT vs R. L. Sood [2008] 109 taxman 227/245 ITR 727 (Delhi). However, appellant submitted that in order to avail benefit under section 54 of Income-tax Act he is required to purchase residential house property either one year before or within two year after date of transfer of original asset; or within period of three years after that date" he is required to construct residential house. Therefore, for proper application 'of this section it has to be seen whether in instant case is it purchase or construction? It has been clarified by CBDT in circular No.672 dated 16.12.1993 in which it has been made clear that earlier circular No. 471 dated 15.10.1986 in which it was stated that acquisition of flat through allotment by DDA has to be treated as construction of flat would apply to co-operative societies- and other institutions. builder would fall in category of other institutions as held by Mumbai Bench of Tribunal in case Smt. Sunder Kaur Sujan Singh Gadh (supra) and therefore ITA 991/2019, ITA 992/2019 & ITA 996/2019 Page 7 of 23 booking of flat with builder has to be treated as construction of flat by appellant. Thus, in present case, period of three years would apply for construction of new house from date of transfer of original asset. above circulars are binding on revenue authorities under s. 119 of Act. He referred decision rendered by Honorable High Court of Bombay In case of Mrs. Hilla J. B. Wadia (216 ITR 376), wherein Honorable High Court has held that n is case of "Construction". Reliance was placed on judgment of Honorable Karnataka High Court in case of CIT Vs J.R. Sobramanya Bhatt (1887) 165 ITR 571 (Karn), wherein it has been held that it is immaterial whether construction of new house was started before date of transfer, it should be completed after date of transfer of original house. In present case, he had booked semi finished flat with builder, namely DLF Universal Limited in residential group housing complex named as Magnolias DLF Golf Links) and as per agreement, he was to make payment in installments and builder was to construct unfinished bare shell of flat for finishing by buyers on their own to make it liveable (having specifications set out in Annexure-V) as per clause 10.1 of said agreement. It .is also pertinent to mention that Builder Company offered vide letter dated 30.12.2011 (copy enclosed) that Occupation certificate has been received from Competent Authorities and six months period for completing interiors, interms of agreement shall commence from 01.01.2012 and is to be completed before 30.06.2012. Builder Company's letter dated 20.03.2012 and 20.01.2012 (Copies enclosed) offered to finalise details of interiors and extended time for completion of interior to 30.09.2012 and finally possession was granted on 30.10.2013. It has therefore to be considered as case of construction of new residential house and not purchase of flat. Since flat has been allotted to appellant by builder 'who would fall in category of other institutions mentioned in circulars, it has to be taken as ITA 991/2019, ITA 992/2019 & ITA 996/2019 Page 8 of 23 case of construction of residential flat and not as purchase of residential flat. Therefore, he had time window of three years period available to him commencing from 21.12.2011 till 21.12.2014 to construct house property. Having come to this conclusion that it is case of construction it is now to be seen if appellant fulfils conditions laid down under s. 54(1) of Act. In instant case; appellant has occupied house property during 2013 vide letter dated 30.10.2013 offering occupation of House property. Further, appellant has claimed deduction on amount invested till due date of filing of return under section 139 (1) of Income-tax Act. Further, reliance placed by assessing officer on judgment of Honorable Delhi High Court in case of Gulshan Malik Vs. CIT in ITA no. 55 of 2014 is not relevant to facts of case under appeal, since issue involved in case of Gulshan Malik was pertaining to period of holding of asset for purpose of establishing whether resultant gain is long term capital gain or is short term capital gain. It was held that right or interest in immovable property can accrue only by way of agreement embodying consensus ad idem as against confirmation letter that does not confer any right to claim title. Similarly in case of CIT vs R.L.Sood [2008] 109 taxman 227/245 ITR 727 (Delhi), honorable High Court has declined request of Revenue to call for reference on proposed question. It has further been clarified that realising practical difficulties faced by appellant in such situations, CBDT issued circular No. 471, dt. 15th Oct, 1986. relief extending instructions of CBDT, in wake of realization of practical difficulties faced by appellants, by way of circular extending relief to even marginally non compliant appellants in its literal sense of hyper technicalities/cannot be used as tool to interpreted instructions of board or decision of law Courts, to deny very relief to otherwise compliant appellants. In recent reference to Honorable. Delhi High Court, in case of CIT vs Kuldeep Singh, Honorable Court has observed and discussed various decision of other Honorable High Courts and Honorable Supreme Court; as follows; ITA 991/2019, ITA 992/2019 & ITA 996/2019 Page 9 of 23 A. CIT Andhra Pradesh vs. T. N. Aravinda Reddy (1979) 4 SCC 721; B. Civil Appeal nos. 5899-5900/2014 titled Sh Sanjeev La I etc etc vs. CIT Chandigarh & Anr decided on 01/07/2014, 2014 (8) SCALE 432 C. Reference was made to decision of Supreme court in CIT vs J.H. Gotla [1985] 156 ITR 323 (SC). D. Moreover in CIT vs Bharati C Kothari (2000) 244ITR 352 In instant case, since appellant entered into agreement for construction of bare shell of house by periodic payment of installments and he had to carry internal fit-outs to make it live-able as per Annexure-V of agreement with Builder Company, within Six months from date of certificate of occupation from competent Authorities, this is to be treated as case of construction. Further, construction has been completed within three years of sale of original asset, which is accepted by Assessing Officer, relief under section 54 is genuinely claimed by. him and therefore, disallowance made under section 54 amounting to Rs.4,00,97,217/- (A.No.496/14-15.), 4,10,45,578/- (A.No.494/14-15) and Rs.4,01,93,262/- (A.No.495/14-15) may be deleted. After going through facts and circumstances of case, submissions of appellant which include Board's circular and various case laws, I find merit in his argument. From above discussion, it is clear that facts of present case indicates that it was case of construction of flat and not purchase of flat as held by AO. Since, case pertains to construction, benefit of section 54 are available to appellant. Therefore, after careful consideration to relevant facts and law, I am of view that booking of bare shell of flat is construction of house property and not purchase, therefore, date of completion of construction is to be looked into which is as per provision of section 54 of LT. Act., therefore, AO is directed to allow benefit to appellant as claimed u/s.54 of ITA 991/2019, ITA 992/2019 & ITA 996/2019 Page 10 of 23 I.T.Act. Accordingly, appeal on this ground is allowed. 19. With respect to challenge relating to disallowance of deduction under Section 54EC of Act, CIT (A) relying upon judgment of High Court of Madras dated 16.12.2014 in case of CIT vs. Coromandal Industries Ltd. (2015) 370 ITR 586 (Madras), held that restriction on investment in bonds of Rs. 50,00,000/- incorporated in Section 54EC(1) of Act is effective from 01.04.2015 in relation to AY 2015-16 and subsequent years. Thus, following aforenoted decision, appeal of assessee on this ground was allowed. As regards addition made on account of rental income received from DT Cinemas amounting to Rs. 14,07,474/-, CIT (A) gave finding of fact that no maintenance charges were received by Appellant, as confirmed by tenant, verifiable from statement of account, TDS certificates and details reflected in Form 26AS. For these reasons, additions made by AO, pertaining to maintenance charges, were also directed to be deleted. 20. In appeal filed by Revenue, Tribunal upheld order of CIT (A) and confirmed deletions. 21. Mr. Ajit Sharma, learned senior standing counsel for Appellant argues that impugned order is perverse and Tribunal has erred in deleting additions/disallowances made by AO without considering detailed findings given in assessment order. He argued that AO had rightly taken effective date of purchase as 10.02.2006 which is ITA 991/2019, ITA 992/2019 & ITA 996/2019 Page 11 of 23 beyond period of limitation prescribed under Section 54 of Act. He further argued that since property at Magnolias DLF was purchased prior to sale of long term asset, assessee cannot take benefit of amounts expended in construction thereof as sale proceeds of long term assets have not been utilized in construction of said property. He argued that property at Jor Bagh was sold on 21.12.2011 and as per calculation submitted by assessee, amount of Rs. 3,00,86,525/- had been paid to Magnolias DLF up to 31.03.2012 and Rs. 1,01,06,737/- towards bank, interest on loans and on cost of improvement of property. Such payments have not been made from sale proceeds of Jor Bagh property and therefore benefit of Section 54 of Act should not be allowed to assessee. He further argued that ITAT is not justified in deleting addition under Section 54EC of Act for excess investments in specified bonds without considering that purpose of inserting proviso to Sub Section 1 to Section 54EC of Act was to clarify and remove any ambiguity that existed and not allow any additional benefit by removing restriction over and above limit of Rs. 50,00,000/- prescribed under Section 54EC Act. Lastly, he argued that deletion of addition of Rs. 14,07,474/- was erroneous and without appreciation of fact that as per Clause 8 (V) of lease deed executed with DT Cinemas, assessee had received maintenance charges as income in disguise. 22. Mr. Salil Kapoor, learned counsel for Respondents/Caveator urges that present appeals do not raise any question of law, much less substantial question of law which requires consideration by this Court. He urges that precise question urged by Revenue in relation to Section 54 of ITA 991/2019, ITA 992/2019 & ITA 996/2019 Page 12 of 23 Act has already been decided by this Court in cases of CIT v. Bharti Mishra (2014) 265 CTR 374 (Delhi) and CIT v. Kuldeep Singh (2014) 270 CTR 561(Delhi). Regarding benefit availed by assessee under Section 54EC pertaining to limit of investments in bonds, he relied upon judgment of High Court of Madras in CIT v. C. Jaichander (2015) 370 ITR 579 (Madras). 23. We have given due consideration to submissions made by learned counsels for parties. 24. It is accepted position and is not disputed by Revenue that assessee had sold property at Jor Bagh on 21.12.2011. On said sale, assessee has claimed deduction of capital gains under Section 54 of Act. assessee was required to purchase residential house property either one year before, or within two years after date of transfer of original asset; or within period of three years after date he was required to construct residential house. CBDT in its circulars No. 672 dated 16.12.1993 has made it clear that earlier circular No. 471 dated 15.10.1986 in which it was stated that acquisition of flat through allotment by DDA has to be treated as construction of flat, would apply to cooperative societies and other institutions. tax authorities have relied upon said circular and held that builder would fall in category of other institutions and, therefore, booking of flat with builder has to be treated as construction of flat by assessee. In accordance with said agreement, assessee was to make payment in installments and builder was to construct unfinished bare shell flat for finishing by ITA 991/2019, ITA 992/2019 & ITA 996/2019 Page 13 of 23 buyers. possession was granted on 30.03.2013. lower tax authorities after examining terms of agreement, occupation certificate, and other letters-offer to finalize details of interiors, have come to conclusion that assessee had booked semi furnished flat with builder, namely, DLF Universal Ltd. in residential group housing complex named as Magnolias DLF Golf Links. Accordingly, assessee had window of three years period from 21.12.2011 till 21.12.2014 to construct house property, calculated from date of transfer of original asset. appellant has claimed deduction on amount invested till due date of filing of return under Section 139 (1) of Income Tax Act. In this factual background, we do not find any cogent ground to hold that Respondents do not fulfill conditions laid down under Section 54 (1) of Act so as to deny benefit of said provision. apprehension expressed by learned senior standing counsel for Revenue is not borne from facts on record. provision in question is beneficial provision for assessees, who replace original long term capital asset by new one. In relation to Section 54F, this Court in CIT v. Bharti Mishra [2014] 265 CTR 374 (Delhi) has rejected contention raised by Revenue, which is similar to one urged by Mr. Sharma, in following words: 13. For satisfaction of third condition, it is not stipulated or indicated in Section that construction must begin after date of sale of original/old asset. There is no condition or reason for ambiguity and confusion which requires moderation or reading words of said sub-section in different manner. apprehension of Revenue that entire money collected or received on transfer of original/capital asset would not be utilised in construction of new capital asset, ITA 991/2019, ITA 992/2019 & ITA 996/2019 Page 14 of 23 i.e., residential house, is ill-founded and misconceived. requirement of sub-section (4) is that if consideration was not appropriated towards purchase of new asset one year before date of transfer of original asset or it was not utilised for purchase or construction of new asset before date of filing of return under Section 139 of Act, balance amount shall be deposited in authorized bank account under scheme notified by Central Government. Further, only amount which was utilised in construction or purchase of new asset within specified time frame stand exempt and not entire consideration received. 14. Section 54F is beneficial provision and is applicable to assessee when old capital asset is replaced by new capital asset in form of residential house. Once assessee falls within ambit of beneficial provision, then said provision should be liberally interpreted. Supreme Court in CCE v. Favourite Industries, [2012] 7 SCC 153 has succinctly observed: '21. Furthermore, this Court in Associated Cement Companies Ltd. v. State of Bihar [(2004) 7 SCC 642], while explaining nature of exemption notification and also manner in which it should be interpreted has held: (SCC p. 648, para 12) "12. Literally 'exemption' is freedom from liability, tax or duty. Fiscally it may assume varying shapes, specially, in growing economy. In fact, exemption provision is like exception and on normal principle of construction or interpretation of statutes it is construed strictly either because of legislative intention or on economic justification of inequitable burden of progressive approach of fiscal provisions intended to augment State revenue. But once exception or exemption becomes applicable no rule or principle requires it to be construed strictly. Truly speaking, liberal and strict construction of exemption provision is to be invoked at different stages of ITA 991/2019, ITA 992/2019 & ITA 996/2019 Page 15 of 23 interpreting it. When question is whether subject falls in notification or in exemption clause then it being in nature of exception is to be construed strictly and against subject but once ambiguity or doubt about applicability is lifted and subject falls in notification then full play should be given to it and it calls for wider and liberal construction. (See Union of India v. Wood Papers Ltd. [(1990) 4 SCC 256 : 1990 SCC (Tax) 422] and Mangalore Chemicals and Fertilisers Ltd. v. Dy. CCT [1992 Supp (1) SCC 21] to which reference has been made earlier.)" 22. In G.P. Ceramics (P.) Ltd. v. Dy. Commissioner, Trade Tax (2009) 2 SCC 90], this Court has held: (SCC pp. 101-02, para 29) 29. It is now well-established principle of law that whereas eligibility criteria laid down in exemption notification are required to be construed strictly, once it is found that applicant satisfies same, exemption notification should be construed liberally. [See CTT v. DSM Group of Industries[(2005) 1 SCC 657] (SCC para 26); TISCO Ltd. v. State of Jharkhand [(2005) 4 SCC 272] (SCC paras 42- 45); State Level Committee v. Morgardshammar India Ltd. [(1996) 1 SCC 108] ; Novopan India Ltd. v. CCE & Customs [1994 Supp (3) SCC 606] ; A.P. Steel Re- Rolling Mill Ltd. v. State of Kerala [(2007) 2 SCC 725] and Reiz Electrocontrols (P.) Ltd. v. CCE. [(2006) 6 SCC 213]' 15. In view of aforesaid position, we do not find any merit in present appeal and same is dismissed. 25. aforenoted findings of tax authorities are factual and cannot be categorized as perverse. It cannot be said in facts of present case that ITA 991/2019, ITA 992/2019 & ITA 996/2019 Page 16 of 23 deduction claimed for construction were not relatable to transaction of sale of Jor Bagh property which resulted in income by way of capital gains. There is no ground urged by Revenue before CIT (A), or before ITAT, that expenditure was not connected with sale transactions. Moreover, we cannot go into factual question as to whether deduction claim made by assessee with regard to payments were not genuine, or were not made. AO had treated date of acquisition of residential property as 10.02.2006 and denied exemption under Section 54 of Act, which was not correct approach. We, therefore, do not find any question of law that arises for our consideration on this ground. With respect to deduction under Section 54EC of Act being restricted to Rs. 50,00,000/- as against Rs. 1,00,00,000/-, we may note that said question has already been answered in judgment relied upon by Tribunal to uphold deletion by CIT (A). High Court of Madras in CIT vs. Coromandal Industries Ltd. (supra) has held as under: 4. issue involved in this appeal is no longer res integra in view of decision of this Court in CIT v. C. Jaichander [Order dated 15.9.2014 made in T.C.(A) Nos. 419 and 533 of 2014], to which one of us - R.Sudhakar,J. is party). In said decision, this Court held as under: 5. key issue that arises for consideration is whether first proviso to Section 54EC(1) of Act would restrict benefit of investment of capital gains in bonds to that financial year during which property was sold or it applies to any financial year during six months period. 6. For better understanding of issue, it would be apposite to refer to Section 54EC(1) of Act, which ITA 991/2019, ITA 992/2019 & ITA 996/2019 Page 17 of 23 reads as under: 'Section 54EC. Capital gain not to be charged on investment in certain bonds. (1) Where capital gain arises from transfer of long-term capital asset (the capital asset so transferred being hereafter in this section referred to as original asset) and assessee has, at any time within period of six months after date of such transfer, invested whole or any part of capital gains in long-term specified asset, capital gain shall be dealt with in accordance with following provisions of this section, that is to say, (a) if cost of long-term specified asset is not less than capital gain arising from transfer of original asset, whole of such capital gain shall not be charged under section 45 ; (b) if cost of long-term specified asset is less than capital gain arising from transfer of original asset, so much of capital gain as bears to whole of capital gain same proportion as cost of acquisition of long-term specified asset bears to whole of capital gain, shall not be charged under section 45. Provided that investment made on or after 1st day of April, 2007 in long-term specified asset by assessee during any financial year does not exceed fifty lakh rupees.' 7. On plain reading of above said provision, we are of view that Section 54EC(1) of Act restricts time limit for period of investment after property has been sold to six months. There is no cap on investment to be made in bonds. first proviso to Section 54EC(1) of Act specifies quantum of investment and it states that investment so made on or after 1.4.2007 in long-term specified asset by assessee during any financial year does not exceed fifty lakh rupees. In other words, as per mandate of Section 54EC(1) of Act, time limit for investment ITA 991/2019, ITA 992/2019 & ITA 996/2019 Page 18 of 23 is six months and benefit that flows from first proviso is that if assessee makes investment of Rs.50,00,000/- in any financial year, it would have benefit of Section 54EC(1) of Act. 8. legislature noticing ambiguity in above said provision, by Finance (No.2) Act, 2014, with effect from 1.4.2015, inserted after existing proviso to sub- section (1) of Section 54EC of Act, second proviso, which reads as under: "Provided further that investment made by assessee in long-term specified asset, from capital gains arising from transfer of one or more original assets, during financial year in which original asset or assets are transferred and in subsequent financial year does not exceed fifty lakh rupees." 9. At this juncture, for better clarity, it would be appropriate to refer to Notes on Clauses - Finance Bill 2014 and Memorandum explaining provisions in Finance (No.2) Bill, 2014, which read as under: "Notes on Clauses - Finance Bill 2014: Clause 23 of Bill seeks to amend section 54EC of Income-tax Act relating to capital gain not to be charged on investment in certain bonds. existing provisions contained in sub-section (1) of section 54EC provide that where capital gain arises from transfer of long-term capital asset and assessee has within period of six months invested whole or part of capital gains in long-term specified asset, proportionate capital gains so invested in long-term specified asset out of total capital gain shall not be charged to tax. proviso to said sub-section provides that investment made in long-term specified asset during any financial year shall not exceed fifty lakh rupees. It is proposed to insert proviso below first proviso in said sub-section (1) so as to provide that investment made by assessee in long-term specified asset, ITA 991/2019, ITA 992/2019 & ITA 996/2019 Page 19 of 23 from capital gains arising from transfer of one or more original assets, during financial year in which original asset or assets are transferred and in subsequent financial year does not exceed fifty lakh rupees. This amendment will take effect from 1st April, 2015 and will, accordingly, apply in relation to assessment year 2015-16 and subsequent years. Memorandum: Explaining provisions in Finance (No.2) Bill, 2014: Capital gains exemption on investment in Specified Bonds. existing provisions contained in sub-section (1) of section 54EC of Act provide that where capital gain arises from transfer of long-term capital asset and assessee has, at any time within period of six months, invested whole or any part of capital gains in long-term specified asset, out of whole of capital gain, shall not be charged to tax. proviso to said sub-section provides that investment made in long-term specified asset during any financial year shall not exceed fifty lakh rupees. However, wordings of proviso have created ambiguity. As result capital gains arising during year after month of September were invested in specified asset in such manner so as to split investment in two years i.e., one within year and second in next year but before expiry of six months. This resulted in claim for relief of one crore rupees as against intended limit for relief of fifty lakhs rupees. Accordingly, it is proposed to insert proviso in sub- section (1) so as to provide that investment made by assessee in long-term specified asset, out of capital gains arising from transfer of one or more original asset, during financial year in which original asset or assets are transferred and in subsequent financial year does not exceed fifty lakh rupees. ITA 991/2019, ITA 992/2019 & ITA 996/2019 Page 20 of 23 This amendment will take effect from 1st April, 2015 and will, accordingly, apply in relation to assessment year 2015-16 and subsequent assessment years." 10. legislature has chosen to remove ambiguity in proviso to Section 54EC(1) of Act by inserting second proviso with effect from 1.4.2015.The memorandum explaining provisions in Finance (No.2) Bill, 2014 also states that same will be applicable from 1.4.2015 in relation to assessment year 2015-16 and subsequent years. intention of legislature probably appears to be that this amendment should be for assessment year 2015-2016 to avoid unwanted litigations of previous years. Even otherwise, we do not wish to read anything more into first proviso to Section 54EC(1) of Act, as it stood in relation to assessees. 11. In any event, from reading of Section 54EC(1) and first proviso, it is clear that time limit for investment is six months from date of transfer and even if such investment falls under two financial years, benefit claimed by assessee cannot be denied. It would have made difference, if restriction on investment in bonds to Rs.50,00,000/- is incorporated in Section 54EC(1) of Act itself. However, ambiguity has been removed by legislature with effect from 1.4.2015 in relation to assessment year 2015-16 and subsequent years. For foregoing reasons, we find no infirmity in orders passed by Tribunal warranting interference by this Court. substantial questions of law are answered against Revenue and these appeals are dismissed.' (Emphasis Supplied) 5. decision of this Court in Areva T and D India Ltd (supra) relied upon by learned Senior Standing Counsel for appellant is not applicable to facts of present case, as in said decision writ petitions filed "for issuance of writ of declaration declaring that conditions occurring in ITA 991/2019, ITA 992/2019 & ITA 996/2019 Page 21 of 23 Notification No. 380 of 2006 F. No. 142/09/ 2006-TPL, dated December 22, 2006, along with words 'subject to following conditions, namely,' issued by Central Board of Direct Taxes are ultra vires Section 54EC of Income-tax Act, 1961, and arbitrary and violative of Articles 14 and 265 of Constitution of India and consequently unenforceable", were dismissed as infructuous taking note of subsequent amendment to Section 54EC of Act, incorporating limit on amount of investment in bonds in section itself. 6. For reasons aforesaid, we do not find any question of law, much less substantial question of law that arises for our consideration in this appeal. Accordingly, this appeal is dismissed. No costs. 26. In view of aforesaid decision, we are of opinion that question urged by Revenue does not require our consideration. 27. As regards third question of law- relating to deletion of addition of Rs. 14,07,474/-, it is to be noted that ITAT has held that presumption drawn by AO for making addition was patently false, based on conjectures and surmises, without appreciating records and making inquiry to discredit evidences and confirmation placed on record by assessee. DLF Universal Ltd. has confirmed that payment of rent under lease agreement to assessee, and has also stated that no other amount is due on any account whatsoever. Maintenance of property was being done by tenant itself. In absence of any evidence of receipt of any amount on account of maintenance, that would contradict books of account, deletion made by CIT (A) has been upheld. This consistent factual finding arrived at by CIT (A) and ITAT does not give rise to any ITA 991/2019, ITA 992/2019 & ITA 996/2019 Page 22 of 23 question of law. 28. In view of above, appeals do not merit any consideration by this Court and are accordingly dismissed. SANJEEV NARULA, J VIPIN SANGHI, J DECEMBER 19, 2019 nk ITA 991/2019, ITA 992/2019 & ITA 996/2019 Page 23 of 23 Pr. Commissioner of Income-tax-17, New Delhi v. Akshay Sobti