Bimal Desai, V. Deputy Commissioner of Income-tax,

ITA 40/PUN/2016

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 7249 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 9 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 24-10-2017
• Assessment Year: 2012-2013
• Appeal Filed On: 11-01-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MUKESH JHA
• Keywords: Capital asset; Salary income
• Section: 143(3); 54F; 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE , , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NO. 40 /P U N/20 1 6 / ASSESSMENT YEAR : 20 1 2 - 1 3 SHRI BIMAL DESAI, 1436, KASBA PETH, PUNE 411011 . / APPELLANT PAN: A BOPD1865B VS. THE DY. COMMISSIONER OF INCOME TAX, CIRCLE 1(1), PUNE . / RESPONDENT . / ITA NO. 41 /P U N/20 16 / ASSESSMENT YEAR : 2012 - 13 SMT. KINNA PATEL, 1436, KASBA PETH, PUNE 411011 . / APPELLANT PAN: AAXPP9195N VS. THE DY. COMMISSIONER OF INCOME TAX, CIRCLE 1(1), PUNE . / RESPONDENT ASSESSEE BY : SHRI PRAMOD SHINGTE REVENUE BY : SHRI MUKESH JHA / DATE OF HEARING : 24 . 1 0.2017 / DATE OF PRONOUNCEMENT: 31 . 1 0.2017 2 ITA NO. 40 & 41 /PUN/20 16 BIMAL DESAI & ANR / ORDER PER SUSHMA CHOWLA, JM: BOTH THE APPEALS FILED BY RELATED ASSESSEE ARE AGAINST SEPARATE ORDER S OF CIT(A) - 4, PUNE, BOTH DATED 03 . 11 .201 5 RELATING TO ASSESSMENT YEAR 20 1 2 - 1 3 AGAINST RESPECTIVE ORDER S PASSED UNDER SECTION 143(3) OF INCOME TAX ACT 1961 (IN SHORT THE ACT). 2 . BOTH THE APPEALS FILED BY RELATED ASSESSEE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. THE ISSUE RAISED IN THE PRESENT APPEALS IS IN RESPECT OF CLAIM OF DEDUCTION UNDER SECTION 54EC OF THE ACT. THE FACTS AND ISSUES ARISING IN BOTH THE APPEALS ARE SIMILAR. HOWEVER, IN ORDER TO ADJUDICATE THE ISSUES, REFERENCE IS BEING MADE TO THE FACTS AN D ISSUES IN ITA NO.41/PUN/2016. 3. THE ASSESSEE IN ITA NO.41/PUN/2016 HAS RAISED THE FOLLOWING GROUND OF APPEAL: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LOWER AUTHORITIES HAVE ERRED IN RESTRICTING THE CLAIM OF EXEMPTION U/S 54EC OF THE INCOME TAX ACT, 1961 FROM RS.100,00,000/ - TO RS.50,00,000/ - BY DISREGARDING APPELLANTS CONTENTION AND CLEAR PROVISIONS OF LAW. 4. BRIEFLY, IN THE FACTS OF THE CASE, THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION, HAD FURNISHED THE RETURN OF INCOME DECLARING TOTAL INCOME OF RS. 2,54,23,259/ - . THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAD DISCLOSED CAPITAL GAINS OF RS.2,87,80,767/ - ON SALE OF V ARIOUS SHARES / UNITS. THE ASSESSEE CLAIMED DEDUCTION UNDER SECTION 54EC OF THE ACT IN RESPECT OF LONG TERM CAPITAL GAINS AMOUNTING TO RS.1 CRORE I.E. INVESTMENT IN 3 ITA NO. 40 & 41 /PUN/20 16 BIMAL DESAI & ANR SPECIFIED CAPITAL GAINS OF RS.38.50 LAKHS ON 22.09.2011, RS.11.50 LAKHS ON 30.03.2012 AND RS.50 LAKHS ON 13.04.2012. THE ASSESSEE WAS SHOW CAUSED AS TO WHY DEDUCTION UNDER SECTION 54EC OF THE ACT SHOULD NOT BE RESTRICTED TO RS.50 LAKHS, IN VIEW OF THE PROVISIONS OF THE ACT. THE ASSESSEE EXPLAINED THAT THE PROVISO LIMITED THE DEDUCTION UNDER S ECTION 54EC OF THE ACT TO RS.50 LAKHS IN FINANCIAL YEAR. HOWEVER, THE BOARD VIDE CIRCULAR HAD CLEARLY STATED THAT THE LIMIT IS FOR FINANCIAL YEAR AND VARIOUS TRIBUNALS HAVE DE CIDED THE ISSUE THAT WHERE THE INVESTMENT OF RS.50 LAKHS IS MADE IN TWO FINANCIA L YEARS, BUT WITHIN PERIOD OF SIX MONTHS FROM THE SALE OF ASSET, THEN THE ASSESSEE IS ENTITLED TO CLAIM DEDUCTION AT RS.1 CRORE. THE ASSESSING OFFICER HOWEVER, REFERRING TO THE AMENDMENT MADE W.E.F. 01.04.2007 BY THE FINANCE BILL, 2007 POINTED OUT THAT IN VESTMENTS IN SPECIFIED ASSETS TO AVAIL EXEMPTION UNDER SECTION 54EC OF THE ACT ON OR AFTER 01.04.2007 WAS NOT TO EXCEED RS.50 LAKHS IN A FINANCIAL YEAR. THE ASSESSING OFFICER WAS OF THE VIEW THAT PROVISO SO INTRODUCED REFERS TO THE INVESTMENT TO BE MADE F OR THE PURPOSE OF CLAIMING DEDUCTION OF CAPITAL GAINS AND THE SAME COULD NOT GIVE UNDUE BENEFIT TO ONE SECTION OF TAXPAYERS, WHEREIN IF THE ASSET WAS TRANSFERRED IN THE MONTH OF APRIL OF FINANCIAL YEAR, THEN HE HAS TO MAKE INVESTMENT WITHIN SIX MONTHS AND HE WOULD BE ENTITLED TO MAKE INVESTMENT OF RS.50 LAKHS ONLY. IN CASE, THE ASSET WAS TRANSFERRED IN THE MONTH OF OCTOBER OF ANY FINANCIAL YEAR OR THEREAFTER, THEN THE ASSESSEE WOULD GET THE BENEFIT OF MAKING THE INVESTMENT OF RS.50 LAKHS IN THE SAID YEAR A ND RS.50 LAKHS IN SECOND YEAR, SINCE HE HAS TO MAKE INVESTMENTS WITHIN PERIOD OF SIX MONTHS, PART OF WHICH FALLS IN THE NEXT YEAR. THE ASSESSING OFFICER THUS, ALLOWED EXEMPTION ONLY TO THE EXTENT OF RS.50 LAKHS IN THE HANDS OF ASSESSEE. 5. THE CIT(A) UPHELD THE ORDER OF ASSESSING OFFICER RELYING ON THE RATIO LAID DOWN BY THE JAIPUR BENCH OF TRIBUNAL IN ACIT VS. RAJKUMAR JAIN & SONS (HRF) 4 ITA NO. 40 & 41 /PUN/20 16 BIMAL DESAI & ANR (2012) 19 TAXMANN.COM 27 (JAIPUR TRIBUNAL) AS AGAINST RELIANCE PLACED UPON BY THE LEARNED AUTHORIZED REPR ESENTATIVE FOR THE ASSESSEE ON THE RATIO LAID DOWN BY THE HONBLE HIGH COURT OF MADRAS IN CIT VS. C. JAYCHANDER (2015) 370 ITR 579 (MAD). THE CIT(A) REFERRED TO THE MEMORANDUM EXPLAINING THE PROVISIONS OF FINANCE ACT, 2014, WHEREIN IT WAS PROVIDED THAT UN DER THE EXISTING PROVISIONS OF SECTION 54EC(1) OF THE ACT THAT INVESTMENT IN SPECIFIED ASSET SHALL NOT EXCEED RS.50 LAKH. HOWEVER, SINCE THE WORDS OF PROVISO HAD CREATED AN AMBIGUITY, WHEREIN INVESTMENT IN THE SPECIFIED ASSET WAS SPLIT IN TWO YEARS I.E. O NE WITHIN THE YEAR AND SECOND IN THE NEXT YEAR BUT BEFORE THE EXPIRY OF SIX MONTHS AND HAD RESULTED IN CLAIM FOR RELIEF OF RS.1 CRORES AS AGAINST INTENDED LIMIT FOR RELIEF OF RS.50 LAKHS. HENCE, IT WAS PROPOSED TO INSERT PROVISO IN SUB - SECTION (1) SO AS T O PROVIDE THAT INVESTMENT MADE BY THE ASSESSEE IN LONG TERM SPECIFIED ASSET WOULD NOT EXCEED RS.50 LAKHS. IN RESPECT OF BINDING PRECEDENT OF THE HONBLE HIGH COURT OF MADRAS, THE CIT(A) WAS OF THE VIEW THAT AS PER THE RATIO LAID DOWN BY THE HONBLE BOMBAY HIGH COURT IN THANA ELECTRICITY SUPPLY LTD. (1994) 206 ITR 727 (BOM), IT WAS HELD THAT THE DECISION OF ANOTHER HIGH COURT IS NEITHER BINDING ON ANOTHER HIGH COURT NOR OTHER TRIBUNALS OUTSIDE ITS TERRITORIAL JURISDICTION. THUS, THE CIT(A) HELD THAT THE A SSESSEE WAS ENTITLED TO CLAIM DEDUCTION UNDER SECTION 54EC OF THE ACT AT RS.50 LAKHS ONLY. 6. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF CIT(A). 7. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THE ISSUE IN THE PRESENT APPEA L HAS BEEN DECIDED FIRST BY THE HONBLE HIGH COURT OF MADRAS WHICH HAS BEEN RELIED UPON BEFORE THE CIT(A) AND ALSO BY THE PUNE BENCH OF TRIBUNAL IN ITO VS. SMT. BALA R. VENKITACHALAM (2016) 71 5 ITA NO. 40 & 41 /PUN/20 16 BIMAL DESAI & ANR TAXMANN.COM 219 (PUNE - TRIB.) AND PANAJI BENCH OF TRIBUNAL IN IT O VS. MS. RANIA FALEIRO (2013) 33 TAXMANN.COM 611 (PANAJI TRIB.) . 8. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE ON THE OTHER HAND, RELYING ON THE ORDER OF CIT(A) POINTED OUT THAT THE INTENTION OF THE ACT WAS TO ALLOW DEDUCTION UNDER SECTION 54EC OF THE ACT AT RS.50 LAKHS ONLY. 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ISSUE WHICH ARISES IN THE PRESENT APPEAL IS AGAINST INVESTMENT MADE BY THE ASSESSEE UNDER SECTION 54EC OF THE ACT, WHEREIN THE ASSESSEE HAD SHOWN INC OME FROM LONG TERM CAPITAL GAINS. THE ASSESSEE HAD CLAIMED THE DEDUCTION UNDER SECTION 54EC OF THE ACT ON ACCOUNT OF INVESTMENTS MADE IN THE FINANCIAL YEAR IN WHICH THE ASSET WAS SOLD AT RS.50 LAKHS AND IN THE SPECIFIED FINANCIAL YEAR ANOTHER INVESTMENT O F RS.50 LAKHS, WHICH WAS MADE WITHIN PERIOD OF SIX MONTHS FROM THE DATE OF SALE OF CAPITAL ASSET. THE CASE OF REVENUE ON THE OTHER HAND, WAS THAT UNDER SECTION 54EC OF THE ACT, THE ASSESSEE WAS ONLY ENTITLED TO THE DEDUCTION TO THE EXTENT OF RS.50 LAKHS A ND NOT RS.1 CRORE AS CLAIMED BY THE ASSESSEE AND HENCE, THE SAME WAS RESTRICTED TO RS.50 LAKHS. 10. SIMILAR ISSUE OF CLAIM OF DEDUCTION UNDER SECTION 54EC OF THE ACT AROSE BEFORE THE PUNE BENCH OF TRIBUNAL IN THE CASE OF ITO VS. SMT. BALA R. VENKITACHAL AM (SUPRA) AND RELYING ON THE RATIO LAID DOWN BY THE HONBLE HIGH COURT OF MADRAS IN CIT VS. C. JAYCHANDER (SUPRA) AND LATER IN CIT VS. COROMANDEL INDUSTRIES (2015) 370 ITR 586 (MAD) , THE TRIBUNAL HELD THAT THE ASSESSEE WAS ENTITLED TO CLAIM DEDUCTION UNDER SECTION 54EC OF THE ACT. THE TRIBUNAL ALSO REFERRED TO THE AMENDMENT MADE BY THE FINANCE (NO.2) ACT, 2014 W.E.F. 01.04.2015 BY WHICH PROVISO WAS INSERTED AFTER EXISTING PROVISO TO SECTION 6 ITA NO. 40 & 41 /PUN/20 16 BIMAL DESAI & ANR 54EC(1) OF THE ACT, WHICH WAS REFERRED TO BY THE HONBLE HIGH COURT OF MADRAS AND IT WAS HELD BY THE HONBLE HIGH COURT THAT SECOND PROVISO WAS HELD TO BE APPLICABLE FROM ASSESSMENT YEAR 2015 - 16 AND SUBSEQUENT ASSESSMENT YEARS. THE RELEVANT FINDI NGS OF THE TRIBUNAL ARE AS UNDER: - 9. THE ISSUE ARISING IN THE PRESENT APPEAL IS AGAINST THE CLAIM OF DEDUCTION UNDER SECTION 54EC OF THE ACT, UNDER WHICH DEDUCTION IS PROVIDED AGAINST THE INCOME FROM LONG TERM CAPITAL GAINS IN CASE THE INVESTMENT IS MADE IN SPECIFIED ASSETS WITHIN TIME FRAME OF SIX MONTHS FROM THE DATE OF SALE OF ASSET. THE SAID SECTION ALSO PROVIDES A CAP ON THE INVESTMENT TO BE MADE IN THE BONDS TO THE EXTENT OF RS.50 LAKHS IN ANY FINANCIAL YEAR. AS PER THE MANDATE OF THE SAID SECTION AND THE PROVISO THEREUNDER, WHERE THE ASSESSEE MAKES AN INVESTMENT OF RS.50 LAKHS IN THE SPECIFIED BONDS WITHIN TIME FRAME OF SIX MONTHS FROM THE DATE OF SALE, IN ANY FINANCIAL YEAR, THEN THE BENEFIT OF SAID SECTION IS TO BE ALLOWED TO THE ASSESSEE. IN C ASE, THE PERIOD OF SIX MONTHS FALLS WITHIN TWO FINANCIAL YEARS, THEN THE QUESTION WHICH ARISES FOR ADJUDICATION IS WHETHER THE ASSESSEE CAN CLAIM THE AFORESAID DEDUCTION UNDER SECTION 54EC OF THE ACT TO THE EXTENT OF RS.50 LAKHS IN EACH OF THE FINANCIAL YE AR TOTALING RS.1 CRORE, WHERE THE INVESTMENT IS MADE IN THE AFORESAID BONDS IN TWO FINANCIAL YEARS SEPARATELY BUT WITHIN PERIOD OF SIX MONTHS FROM THE DATE OF SALE OF ASSETS. THIS ISSUE AROSE FOR CONSIDERATION BEFORE THE HONBLE HIGH COURT OF MADRAS IN CI T VS. C. JAICHANDAR (SUPRA) AND LATER IN CIT VS. COROMANDEL INDUSTRIES LTD. (2015) 370 ITR 586 (MAD) HAVE LAID DOWN THAT THE EXEMPTION GRANTED UNDER THE PROVISO TO SECTION 54EC(1) OF THE ACT SHOULD BE CONSTRUED NOT TRANSACTIONWISE BUT FINANCIAL YEAR WISE, WHEREIN IF THE ASSESSEE WAS ABLE TO INVEST SUM OF RS.50 LAKHS EACH IN TWO DIFFERENT FINANCIAL YEARS, WITHIN PERIOD OF SIX MONTHS FROM THE DATE OF TRANSFER OF CAPITAL ASSETS, THE SAID DEDUCTION WAS ALLOWABLE TO THE ASSESSEE. THE HONBLE HIGH COURT OF MADRA S IN CIT VS. C. JAICHANDAR (SUPRA) HAS HELD THAT AS PER THE MANDATE OF SECTION 54EC(1) OF THE ACT, TIME LIMIT FOR INVESTMENT IS SIX MONTHS AND BENEFIT THAT FLOWS FROM THE FIRST PROVISO IS THAT IF THE ASSESSEE MAKES INVESTMENT OF RS.50 LAKHS IN ANY FINANCIA L YEAR, IT WOULD HAVE BENEFIT OF SECTION 54EC(1) OF THE ACT. THE HONBLE HIGH COURT FURTHER HELD THAT HOWEVER, TO REMOVE THE AMBIGUITY IN THE ABOVE SAID PROVISIONS, LEGISLATURE BY FINANCE (NO.2) ACT, 2014 W.E.F. 01.04.2015 HAD INSERTED PROVISO AFTER EXIST ING PROVISO TO SUB - SECTION (1) OF SECTION 54EC OF THE ACT. THE SECOND PROVISO, AS PER WHICH THE INVESTMENT MADE BY THE ASSESSEE IN LONG TERM CAPITAL GAINS SPECIFIED ASSETS OUT OF CAPITAL GAINS ARISING FROM TRANSFER OF ONE OR MORE ORIGINAL ASSETS, DURING T HE FINANCIAL YEAR IN WHICH THE ORIGINAL ASSET OR ASSETS ARE TRANSFERRED AND IN SUBSEQUENT FINANCIAL YEARS, DOES NOT EXCEED RS.50 LAKHS. THE SAID AMENDMENT WAS HELD TO BE APPLICABLE FROM ASSESSMENT YEAR 2015 - 16 AND SUBSEQUENT ASSESSMENT YEARS. THE HONBLE HIGH COURT THUS, CATEGORICALLY HELD THAT THE INVESTMENT MADE ON OR AFTER 01.04.2007 IN LONG TERM SPECIFIED ASSETS BY AN ASSESSEE DURING ANY FINANCIAL YEAR SHOULD NOT EXCEED RS.50 LAKHS. HOWEVER, THE BENEFIT THAT FLOWS FROM THE PROVISO WAS THAT WHERE THE ASSESSEE MAKES INVESTMENT OF RS.50 LAKHS IN ANY FINANCIAL YEAR, IT COULD HAVE THE BENEFIT OF SECTION 54EC(1) OF THE ACT. APPLYING THE AFORESAID PROPOSITION TO THE FACTS OF THE PRESENT CASE, WHERE THE ASSESSEE HAD INVESTED RS.50 LAKHS IN REC BONDS I.E. SPE CIFIED ASSETS AS PROVIDED UNDER SECTION 54EC OF THE ACT ON 28.02.2010 I.E. IN FINANCIAL YEAR 2009 - 10 AND RS.22,50,000/ - ON 30.04.2010 I.E. IN FINANCIAL YEAR 2010 - 11 AS AGAINST THE CAPITAL GAINS ARISING OF RS.72,49,401/ - ON THE TRANSFER OF LONG TERM CAPITAL GAINS I.E. SALE OF SHARES ON 21.01.2010 FALLING IN FINANCIAL YEAR 2009 - 10, THE ASSESSEE IS ENTITLED TO THE BENEFIT PROVIDED BY THE PROVISO UNDER SECTION 54EC OF THE ACT AND CONSEQUENTLY, THE ORDER OF CIT(A) MERITS TO BE UPHELD. DISMISSING THE 7 ITA NO. 40 & 41 /PUN/20 16 BIMAL DESAI & ANR GROUNDS OF APPEAL RAISED BY THE REVENUE, THE APPEAL OF THE REVENUE IS DISMISSED. 11. IN VIEW OF THE RATIO LAID DOWN BY THE HONBLE HIGH COURT OF MADRAS, WHICH UNDOUBTEDLY, IS NOT THE JURISDICTIONAL HIGH COURT BUT THE SAID VIEW HAS PERSUASIVE VALUE AND HAS BEEN APPL IED BY THE PUNE BENCH OF TRIBUNAL IN ANOTHER CASE AND HENCE, WE FIND NO MERIT IN THE OBSERVATIONS OF THE CIT(A) IN THIS REGARD. ACCORDINGLY, WE REVERSE THE FINDINGS OF THE CIT(A) AND HOLD THAT THE AMENDMENT BY THE FINANCE (NO.2) ACT, 2014 W.E.F. 01.04.201 5 BY WHICH PROVISO HAS BEEN INSERTED AFTER THE PROVISO TO SECTION 54EC(1) OF THE ACT IS TO BE APPLIED PROSPECTIVELY FROM ASSESSMENT YEAR 2015 - 16 ONWARDS. ACCORDINGLY, THE YEAR UNDER APPEAL BEING ASSESSMENT YEAR 2012 - 13, THE ASSESSEE IS ENTITLED TO CLAIM T HE DEDUCTION UNDER SECTION 54EC OF THE ACT AT RS.1 CRORE I.E. ON ACCOUNT OF INVESTMENT MADE IN THE FINANCIAL YEAR IN WHICH THE ASSET WAS SOLD AT RS.50 LAKHS AND FURTHER DEDUCTION OF RS.50 LAKHS WHICH WAS MADE IN THE SUBSEQUENT FINANCIAL YEAR, THOUGH WITHIN PERIOD OF SIX MONTHS FROM THE DATE OF SALE OF ASSET. ACCORDINGLY, WE ALLOW THE CLAIM OF ASSESSEE AND DIRECT THE ASSESSING OFFICER TO ALLOW THE DEDUCTION UNDER SECTION 54EC OF THE ACT AT RS.1 CRORE. THE GROUND OF APPEAL RAISED BY THE ASSESSEE IS THUS, AL LOWED. 12. IN THE CASE OF BIMAL DESAI, THE FIRST GROUND OF APPEAL IS IDENTICAL TO THE GROUND OF APPEAL NO.1 RAISED IN SMT. KINNA PATEL AND APPLYING THE SAME PRINCIPLE, WE HOLD THAT THE ASSESSEE IS ENTITLED TO CLAIM DEDUCTION UNDER SECTION 54EC OF THE ACT AT RS.1 CRORES. 13. HOWEVER, THE ASSESSEE HAS FURTHER RAISED GROUND OF APPEAL NO.2, WHICH READS AS UNDER: - 8 ITA NO. 40 & 41 /PUN/20 16 BIMAL DESAI & ANR 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LOWER AUTHORITIES HAVE ERRED IN NOT ALLOWING THE CLAIM OF EXEMPTION U/S 54EC OF THE INCOME TAX ACT, 1961, A SUM OF RS.45,95,766/ - INVESTED IN THE NAME OF MINOR DAUGHTER, MS. JOGOYA B DESAI AS NOT ELIGIBLE FOR SEPARATE EXEMPTION. HOWEVER, THE GAIN ACCRUING TO HER IS SEPARATELY CLUBBED TO THE INCOME OF THE APPELLANT. 14. BRIEF FACTS RELATING TO THE ISSUE ARE THAT THE MINOR DAUGHTER OF ASSESSEE HAD ALSO DECLARED INCOME FROM CAPITAL GAINS AND HAD FURTHER CLAIMED DEDUCTION UNDER SECTION 54EC OF THE ACT, WHEREIN INVESTMENT TO THE EXTENT OF RS.45,95,765/ - WAS MADE IN THE SPECIFIED ASSETS. THE ASSESSING OFFICER WAS OF THE VIEW THAT SINCE THE ASSESSEE HIMSELF IN THE FINANCIAL YEAR HA D CLAIMED DEDUCTION UNDER SECTION 54EC OF THE ACT AT RS.50 LAKHS, NO FURTHER DEDUCTION UNDER SECTION 54EC OF THE ACT WA S ALLOWABLE TO THE MINOR DAUGHTER OF ASSE SSEE. THE SAID VIEW WAS TAKEN BY HOLDING THAT UNDER SECTION 54EC OF THE ACT AT BEST THE DEDUCTION IS TO BE ALLOWED TO THE EXTENT OF RS.50 LAKHS ONLY ON ACCOUNT OF INVESTMENT IN SPECIFIED ASSETS UNDER SECTION 54EC OF THE ACT. BOTH THE AUTHORITIES BELOW DI D NOT ALLOW THE CLAIM OF ASSESSEE, AGAINST WHICH THE ASSESSEE IS IN APPEAL. 15. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THE ASSESSING OFFICER HAS NOT CONSIDERED THE COMPUTATION OF INCOME IN THE HANDS OF MINOR DAUGHTER OF AS SESSEE SEPARATELY. UNDER THE PROVISIONS OF SECTION 64 OF THE ACT, WHAT IS ADDED IN THE HANDS OF PARENTS IS THE NET INCOME OF MINOR CHILD / CHILDREN OR THE WIFE, AS THE CASE MAY BE. HE REFERRED TO THE PROVISIONS OF THE ACT AND ALSO POINTED OUT THAT THE IS SUE IS NOW STANDS COVERED BY THE RATIO LAID DOWN IN THE FOLLOWING DECISIONS: - A) CIT VS. S.K. NAYAK (1984) 145 ITR 791 (KAR) B) CIT VS. LALJI AGRAWAL (1998) 234 ITR 820 (ALL) C) DCIT VS. RAJEEV GOYAL (2012) 52 SOT 335 (KOL TRIB) D) JCIT VS. GOVIND ROHIRA ALIAS SRICHAND ROHRA (2005) 96 TTJ 346 (MUM - TRIB) 9 ITA NO. 40 & 41 /PUN/20 16 BIMAL DESAI & ANR 16. HE FURTHER POINTED OUT THAT THE FACTS IN DCIT VS. RAJEEV GOYAL (SUPRA) ARE IDENTICAL TO THE FACTS BEFORE THE TRIBUNAL IN ASSESSEES OWN CASE. 17. THE LEARNED DEPARTMENTAL REP RESENTATIVE FOR THE REVENUE ON THE OTHER HAND, POINTED OUT THAT MAXIMUM DEDUCTION ALLOWABLE UNDER SECTION 54EC OF THE ACT IS AT RS.50 LAKHS WHICH HAS BEEN ALLOWED IN THE HANDS OF ASSESSEE. HENCE, THERE IS NO MERIT IN CLAIMING ANY FURTHER DEDUCTION ON THIS COUNT. 18. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. IN THE FACTS OF THE ISSUE WHICH IS RAISED THE ASSESSEE HAD COMPUTED THE INCOME IN THE HANDS OF MINOR DAUGHTER MS. JOGOYA B DESAI ON ACCOUNT OF SALE OF CERTAIN ASSETS AND HAD CLAIMED DEDUCTION UNDER SECTION 54EC OF THE ACT AT RS.45,95,766/ - AND THE BALANCE INCOME WAS ADDED IN THE HANDS OF ASSESSEE UNDER SECTION 64(1A) OF THE ACT. THE ASSESSING OFFICER ON THE OTHER HAND, WAS OF THE VIEW THAT THE ASSESSEE IS ONLY ENTITLED TO THE DEDUCTION UNDER SECTION 54EC OF THE ACT AT MAXIMUM OF RS.50 LAKHS WHICH HAS BEEN ALLOWED IN HER HANDS WHILE COMPUTING H ER INCOME FROM LONG TERM CAPITAL GAINS ON SALE OF ASSETS. IN RESPECT OF CLUBBING OF INCOM E OF MINOR, HE WAS OF THE VIEW THAT NO FURTHER DEDUCTION UNDER SECTION 54EC OF THE ACT IS TO BE ALLOWED IN THE HANDS OF ASSESSEE. 19. THE ISSUE NEEDS TO BE ADJUDICATED ON ACCOUNT OF INTERPRETATION OF PROVISIONS OF CLUBBING OF INCOME UNDER SECTION 64(1) OF THE ACT. IT MAY BE POINTED OUT THAT THE ACT PROVIDES THAT WHERE THE CHILD IS A MINOR, THEN HIS / HER INCOME IS TO BE CLUBBED WITH THE PARENT WHOSE INCOME IS HIGHER. IN OTHER WORDS, WHAT IS TO BE CLUBBED IS THE INCOME DETERMINED IN THE HANDS OF MINOR. SO, THE FIRST STEP IS TO DETERMINE INCOME IN THE HANDS OF MINOR CHILD AND THEREAFTER INCLUDE IT IN THE HANDS OF PARENT I.E. THE FATHER OR THE MOTHER, AS THE CASE MAY BE. 10 ITA NO. 40 & 41 /PUN/20 16 BIMAL DESAI & ANR WHILE COMPUTING THE INCOME IN THE HANDS OF MINOR, THEN THE FIRST STEP IS TO COMPUTE THE GROSS INCOME AND THEN ALLOW THE DEDUCTION, IF ANY, WHICH IS PERMISSIBLE UNDER THE ACT. 20. THE HONBLE HIGH COURT OF KARNATAKA IN CIT VS. S.K. NAYAK (SUPRA) WHICH RATIO WAS FURTHER APPLIED BY THE HONBLE HIGH COURT OF ALLAHABAD IN CIT VS. LALJI AGRA WAL (SUPRA) HELD THAT THE NET SALARY INCOME OF SPOUSE IS TO BE DETERMINED AFTER PROVIDING THE STANDARD DEDUCTION UNDER SECTION 16(1) OF THE ACT, WHICH IN TURN, IS TO BE CLUBBED UNDER SECTION 64(1) OF THE ACT IN THE HANDS OF HUSBAND. 21. THE KOLKATA BENC H OF TRIBUNAL IN DCIT VS. RAJEEV GOYAL (SUPRA) ON IDENTICAL FACTS AS BEFORE US ON COMPUTATION OF INCOME IN THE HANDS OF MINOR CHILDREN ON SALE OF BENEFICIAL SHARES, WHEREIN THE CHILDREN HAD PURCHASED R E C BONDS AND CLAIMED THE DEDUCTION UNDER SECTION 54EC O F THE ACT, IT WAS HELD THAT THE INCOME OF ANY PERSON , WHO IS AN ASSESSEE , HAS TO BE COMPUTED AS PER PROVISIONS OF THE ACT AND THE NET INCOME IS TO BE CLUBBED WITH THE INCOME OF THE PARENT. THE TRIBUNAL THUS, HELD AS UNDER: - 7. WE HAVE HEARD RIVAL SUBMISS IONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND FROM THE NOTIFICATION ISSUED BY RURAL ELECTRICITY CORPORATION LTD. DATED 29.06.2006 (REPRODUCED ABOVE IN PARA 5) THAT THERE IS NOTHING IN THE ABOVE NOTIFICATION IN SO FAR AS THE DEDUCTION I S TO BE ALLOWED U/S. 54EC OF THE ACT. FROM THE ABOVE NOTIFICATION ISSUED BY RURAL ELECTRICITY CORPORATION LTD., WHICH SAYS THAT 'A PERSON' SHALL NOT BE 'ALLOTTED' BONDS MORE THAN RS. 50,00,000/ - . THIS WORD 'PERSON' HAS BEEN DEFINED IN SEC. 2(31) OF THE ACT , WHICH INCLUDES AN INDIVIDUAL. THE RELEVANT DEFINITION OF 2(31) READS AS UNDER: '(31) 'PERSON' INCLUDES (I) AN INDIVIDUAL, (II) A HINDU UNDIVIDED FAMILY, (III) A COMPANY (IV) A FIRM, 11 ITA NO. 40 & 41 /PUN/20 16 BIMAL DESAI & ANR (V) AN ASSOCIATION OF PERSONS OR A BODY OF INDIVIDUALS, WHETHER INCORP ORATED OR NOT, (VI) A LOCAL AUTHORITY, AND (VII) EVERY ARTIFICIAL JURIDICAL PERSON, NOT FALLING WITHIN ANY OF THE PRECEDING SUBCLAUSES; EXPLANATION - FOR THE PURPOSES OF THIS CLAUSE, AN ASSOCIATION OF PERSONS OR A BODY OF INDIVIDUALS OR A LOCAL AUTHORITY O R AN ARTIFICIAL JURIDICAL PERSON SHALL BE DEEMED TO BE A PERSON, WHETHER OR NOT SUCH PERSON OR BODY OR AUTHORITY OR JURIDICAL PERSON WAS FORMED OR ESTABLISHED OR INCORPORATED WITH THE OBJECT OF DERIVING INCOME, PROFITS OR GAINS' FROM THE ABOVE DEFINITION OF 'PERSON' IT IS CLEAR THAT IN CASE MINOR IS AN ASSESSABLE ENTITY EVEN THOUGH HIS INCOME IS CLUBBED U/S. 64(1) OF THE ACT IN THE HANDS OF HIS PARENTS, HE IS TO BE CONSIDERED SEPARATE THAN HIS PARENTS WHO IS ALSO AN INDIVIDUAL AND A PERSON AS PER THIS DEFI NITION. THERE WAS NO LIMIT IN SEPARATELY ALLOTTING BONDS UP TO RS. 50,00,000/ - TO EACH OF SUCH PERSON NOR THERE IS ANY MENTIONED LIMITING THE DEDUCTION TO AN ASSESSEE. SECTION 54EC (3) EXPLANATION (B) OF THE ACT, SUGGESTS THAT THE CONDITIONS FOR PROVIDING A LIMIT ON THE AMOUNT OF INVESTMENT BY AN ASSESSEE CAN BE NOTIFIED OR COULD HAVE BEEN NOTIFIED BY THE CENTRAL GOVT. BUT IN THE NOTIFICATION RELIED ON THE BY THE AO AS AFORESAID, NO LIMIT OF INVESTMENT BY AN 'ASSESSEE' IS PRESCRIBED. BUT THE CONDITION FOR A LLOTMENT OF BONDS TO A SINGLE PERSON IS SPECIFIED. IN FACT THE ISSUING AUTHORITY WAS FULLY AWARE OF THE NOTIFICATION AND TAKING INTO ACCOUNT THE FACT THAT IT WAS BEING ISSUED TO THREE DIFFERENT 'PERSONS' THE ALLOTMENT WAS MADE. THE DEDUCTION OR OTHERWISE W AS NOT THE SUBJECT MATTER OF NOTIFICATION RATHER IT WAS OUT OF THE PURVIEW OF THE AFORESAID NOTIFICATION. IN VIEW OF THE ABOVE EVEN IF SECTION 54EC(3) EXPLANATION (B) OF THE ACT IS CONSIDERED, ASSESSEE'S CASE FALLS OUTSIDE THE EMBARGO PUT ON BY THE AMENDME NT MADE IN THIS SECTION. EVEN SECTION 64(1A) SPEAKS OF THE ADDITION OF THE TOTAL INCOME OF MINOR CHILD AND INCOME OF A MINOR CHILD FOR THE PURPOSE OF INCLUSION U/S 64(1A) WILL BE HIS TOTAL INCOME. THE RELEVANT PROVISIONS OF SECTION 64 (1A) OF THE ACT READS AS UNDER: 64 INCOME OF INDIVIDUAL TO INCLUDE INCOME OF SPOUSE, MINOR CHILD, ETC. '(1A) IN COMPUTING THE TOTAL INCOME OF ANY INDIVIDUAL, THERE SHALL BE INCLUDED ALL SUCH INCOME AS ARISES OR ACCRUES TO HIS MINOR CHILD NOT BEING A MINOR CHILD SUFFERING FROM ANY DISABILITY OF THE NATURE SPECIFIED IN SECTION 80U'. 8. WE FIND THAT THIS SECTION SAYS THAT IN COMPUTING THE 'TOTAL INCOME' OF AN INDIVIDUAL ALL SUCH INCOME AS ARISES OR ACCRUES TO THE MINOR CHILD. THE WORD 'SUCH' MEANS THE TOTAL INCOME OF THE MINOR, BE CAUSE 'SUCH' IS PRECEDED BY THE WORD TOTAL INCOME. THE WORD 'SUCH' MEANS THE 'SAME' OR OF THE 'SAME NATURE' AS HAS BEEN DEFINED IN ALL THE DICTIONARIES AND HERE THE WORD 'SUCH' IS PRECEDED BY THE WORD TOTAL INCOME. THE WORD TOTAL INCOME HAS BEEN DEFINED U/ S. 2(45) OF THE ACT WHICH IS AS UNDER: (45) 'TOTAL INCOME' MEANS THE TOTAL AMOUNT OF INCOME REFERRED TO IN SECTION 5, COMPUTED IN THE MANNER LAID DOWN IN THIS ACT;' FROM THE ABOVE DEFINITION OF TOTAL INCOME, IT IS CLEAR THAT IT IS NOT THE GROSS TOTAL INCOM E BUT THE INCOME OF ANY PERSON, WHO IS AN ASSESSEE, AS COMPUTED UNDER THE PROVISIONS OF THE ACT, MEANS THE TOTAL INCOME AS COMPUTED UNDER THE PROVISIONS OF THE ACT IS TO BE ADDED. AS REFERRED BY LD. COUNSEL CBDT CIRCULAR 12 ITA NO. 40 & 41 /PUN/20 16 BIMAL DESAI & ANR NO. 636, DATED 31 - 8 - 1992 AND SCOPE OF THIS SECTIONS IS EXPLAINED IN PARA - 36 PAGE 31 OF SAID CIRCULAR REPORTED IN 198 ITR(ST.)1 WHICH READS AS UNDER : - 'CLUBBING OF MINOR'S INCOME' '36. SECTION 64 OF THE INCOME - TAX ACT PROVIDED THAT IN COMPUTING THE TOTAL INCOME OF ANY INDIVIDUAL, THERE SHALL BE INCLUDED ALL SUCH INCOME AS ARISES DIRECTLY OR INDIRECTLY TO A MINOR CHILD OF SUCH INDIVIDUAL FROM, - 9. WE FURTHER FIND SUPPORT FROM THE DECISION OF BANGALORE BENCH OF THIS ITAT IN THE CASE OF BAJAJ ASHOK CHUNNILAL (SUPRA), WHEREIN IT IS HELD AS UNDER: 'CONSIDERING ALL THE AFORESAID DECISIONS IT CAN BE HELD THAT UNLESS AND UNTIL THE INCOME OF THE MINOR CHILD IS COMPUTED, THE CLUBBING PROVISION WILL NOT APPLY. ' FURTHER, MUMBAI BENCH OF THIS TRIBUNAL IN THE CASE OF SMT. BABITA P. KANUNGO (SUPRA), H ELD AS UNDER: 'FROM THE ABOVE, WE FIND THAT IN COMPUTING TOTAL INCOME OF AN ASSESSEE, ALL SUCH INCOME AS ARISES OR ACCRUES TO HIS MINOR CHILD IS TO BE CLUBBED. THE WORDS 'ALL SUCH INCOME' IN THIS SECTION REFER TO TOTAL INCOME AND WE ARE OF THE CONSIDERED O PINION THAT FOR GIVING EFFECT TO THIS SECTION, FIRST THE TOTAL INCOME OF THE MINOR CHILDREN IS TO BE COMPUTED AND THEN SUCH TOTAL INCOME ONLY OF THE MINOR CHILDREN IS TO BE CLUBBED WITH THE INCOME OF THE PARENT.' WE AFTER GOING THROUGH PROVISIONS OF THE AC T ARE OF THE VIEW THAT CAPITAL GAIN WHICH IS THE SUBJECT MATTER OF THIS APPEAL IS TO BE COMPUTED UNDER CHAPTER IV - E OF THE ACT. SECTION 54EC PROVIDES THAT CAPITAL GAIN NOT TO BE CHARGED ON INVESTMENT ON CERTAIN BONDS. THEREFORE THE INVESTMENTS MADE IN CERT AIN BONDS SHALL BE OUTSIDE THE SCOPE OF CAPITAL GAIN FOR THE PURPOSE OF COMPUTATION OF TOTAL INCOME ITSELF. IT IS NOT A DEDUCTION UNDER CHAP. VIA WHICH COMES INTO PICTURE ONLY AFTER COMPUTING THE TOTAL INCOME AND THE DEDUCTIONS ARE BEING ALLOWED FROM GROSS TOTAL INCOME AS PER SECTION 80A(L). AS STATED EARLIER FOR THE PURPOSE OF COMPUTATION OF GROSS TOTAL INCOME FROM CAPITAL GAIN, ANY AMOUNT INVESTED AS PER THE PROVISION OF SECTION 54EC IS OUTSIDE THE COMPUTATION OF TOTAL INCOME ITSELF. IT MAY ALSO BE MENTIO NED THAT THERE IS DIFFERENCE BETWEEN THE WORD 'ASSESSEE' AND THE WORD 'PERSON'. THE NOTIFICATION ON WHICH THE AO RELIED UPON HAVE NOT PUT ON ANY EMBARGO ON THE INVESTMENTS BY AN ASSESSEE BUT THE EMBARGO IS ON ALLOTMENT OF THE BONDS TO A 'PERSON' AND SUCH E MBARGO IS ON THE ALLOTTING AUTHORITY. THE BONDS HAVE BEEN ALLOTTED TO THE THREE PERSONS AS PER THE NOTIFICATION ITSELF AND THE ASSESSEE IS ENTITLED TO THE BENEFITS AS PER PROVISIONS OF SEC. 54EC UNDER WHICH RESTRICTION HAVE BEEN PUT ONLY FOR INVESTMENTS FR OM 1.4.2007. FURTHER WE HAVE DRAWN SUPPORT FROM JCIT VS. GOVIND ROHIRA ALIAS SRICHAND ROHRA (2005) 095 ITD 0077 (MUM), WHEREIN IT IS HELD AS UNDER: FIRSTLY, IT IS TO BE NOTED THAT A MINOR IS ENTITLED TO HAVE HIS OWN INCOME. MINOR COULD BE AN OWNER OF HOUSE OF HIS OWN. IF THE MINOR IN CASE WAS HAVING SUCH A HOUSE OF HIS OWN, THERE WAS NO DIFFICULTY IN ALLOWING HIS CLAIM UNDER SECTION 54F OF THE ACT. ONLY BECAUSE MINOR IS NOT HAVING A HOUSE OF HIS OWN, IT CANNOT BE SAID THAT HE IS NOT ENTITLED FOR THE BENEFIT S CONTEMPLATED UNDER THIS SECTION. THE BUSINESS IS CARRIED ON BEHALF OF THE MINOR BY HIS PARENT. THE CIT (A) IN PARA 3 RECORDS THAT SHARES WERE HELD BY ASSESSEE IN RAMANI HOTELS PVT. LTD. BOUGHT ON DIFFERENT DATES BETWEEN 1988 AND 1993. SUCH SHARES WERE SO LD ON 21.4.1994FOR A CONSIDERATION OF RS. 37,21,000. THE CAPITAL GAIN WORKED OUT TO RS. 13 ITA NO. 40 & 41 /PUN/20 16 BIMAL DESAI & ANR 31,37,392, BUT, A RESIDENTIAL HOUSE WAS BOUGHT FOR RS. 31,99,000 IN THE NAME OF ASSESSEE'S MINOR SON AND IT WAS CLAIMED THE BENEFIT UNDER SECTION 54 OF THE ACT. THE INC OME ARISES FROM THE SALE OF THE SHARES STOOD IN THE NAME OF THE ASSESSEE'S MINOR SON. IF HE COULD LEGALLY PURCHASE AND SELL THE SHARES THROUGH HIS FATHER, THE INCOME REALIZED FROM THIS SALE ALSO CAN BE UTILISED FOR THE PURCHASE OF THE HOUSE PROPERTY ACTING THROUGH HIS FATHER. MERELY BECAUSE THE INCOME IS CLUBBED WITH THE INCOME OF THE ASSESSEE'S FATHER, THERE IS NO MEANING IN SAYING THAT HE IS NOT ENTITLED FOR THE BENEFITS CONTEMPLATED UNDER THE SECTION AS RIGHTLY CONTENDED BY THE ASSESSEE. THE MINOR SON IS NOT A NON - ENTITY, BUT, HE ACTS ONLY THROUGH HIS PARENT. IN THE CASE OF S. K. NAIK (SUPRA), THE HON'BLE HIGH COURT HELD THAT 'IT WOULD BE CONTRARY TO THE SCHEME OF THE ACT ITSELF NOT TO ALLOW DEDUCTIONS BEFORE CLUBBING THE INCOME OF THE WIFE WITH THAT OF H ER HUSBAND. ' THIS WAS THE CASE WHERE WE FIND INCOME WAS CLUBBED IN THE HANDS OF HER HUSBAND AND WHERE THE REVENUE DID NOT ALLOW THE STANDARD DEDUCTION. THE HON'BLE HIGH COURT HELD CONCURRING WITH THE TRIBUNAL THAT THE STANDARD DEDUCTION IS TO BE ALLOWED. FURTHER MORE IN THE CASE OF SEGU HARNATH (SUPRA), THE HON'BLE A.P. HIGH COURT HELD 'WHERE THE ASSESSEE WAS A PARTNER IN A FIRM AND HIS MINOR DAUGHTER WAS. ADMITTED TO THE BENEFIT OF PARTNERSHIP IN THE FIRM AND ASSESSEE BORROWED FUNDS AND INVESTED THE SAME IN THE PARTNERSHIP FIRM IN THE NAME OF HIS MINOR DAUGHTER, THE INTEREST PAYABLE BY THE ASSESSEE ON CAPITAL BORROWED BY THE ASSESSEE ON BEHALF OF THE MINOR DAUGHTER WAS DEDUCTIBLE UNDER SECTION 67(3) FROM THE SHARE INCOME ARISING TO THE MINOR CHILD AND IT W AS ONLY THE RESULTANT INCOME, AFTER DEDUCTION WHICH WAS TO BE INCLUDED IN THE TOTAL INCOME OF THE ASSESSEE UNDER SECTION 64(1) (III)'. THE ABOVE JUDGMENT CLEARLY SHOWS THAT EVEN IF THE INCOME OF THE MINOR IS CLUBBED WITH THE INCOME OF THE OTHER INDIVIDUAL, ALL THE DEDUCTIONS ARE TO BE ALLOWED WHILE COMPUTATION OF INCOME OF THE MINOR/SPOUSE AND ONLY THE NET TAXABLE INCOME IS TO BE CLUBBED UNDER SECTION 64. IN VIEW OF THE ABOVE, WE ALLOW THE CLAIM OF ASSESSEE AND DIRECT THE AO TO RECOMPUTE THE LONG TERM CAPIT AL GAINS ACCORDINGLY. THE FACTS AND CIRCUMSTANCES IN ITA NO.951/K/2011ARE EXACTLY SIMILAR, HENCE, TAKING A CONSISTENT VIEW, WE ALLOW THE CLAIM IN THIS APPEAL ALSO. 22. APPLYING THE SAID PRINCIPLE TO THE FACTS OF THE PRESENT CASE, WE HOLD THAT WHILE COMPU TING THE INCOME OF MINOR CHILD, FIRST THE INCOME HAS TO BE COMPUTED IN THE HANDS OF SAID CHILD I.E. INCOME LESS DEDUCTION ALLOWABLE UNDER THE ACT AND THE BALANCE IS TO BE THEN, ADDED TO THE INCOME OF FATHER. IN THE PRESENT CASE, THE MINOR CHILD AGAINST IT S INCOME FROM LONG TERM CAPITAL GAINS HAD CLAIMED THE DEDUCTION UNDER SECTION 54EC OF THE ACT ON ACCOUNT OF INVESTMENTS IN SPECIFIED ASSETS, WHICH HAS TO BE ALLOWED IN THE HANDS OF SAID MINOR CHILD AND THE BALANCE INCOME IS TO BE ADDED IN THE HANDS OF PARE NT. THERE IS NO MERIT IN THE STAND OF REVENUE AUTHORITIES THAT WHERE THE PARENT HAS ALREADY CLAIMED THE DEDUCTION UNDER SECTION 54EC OF THE ACT AT RS.50 LAKHS, THEN THE MINOR CHILD IS NOT ENTITLED 14 ITA NO. 40 & 41 /PUN/20 16 BIMAL DESAI & ANR TO ANY DEDUCTION UNDER SECTION 54EC OF THE ACT. THE SAID DEDUCTION WHICH IS CLAIMED BY THE MINOR CHILD IS ON FOOTING OF THE MINOR CHILD BEING AN INDIVIDUAL IN WHOSE HANDS THE INCOME HAS TO BE COMPUTED FIRST I.E. AFTER ALLOWING DEDUCTION PERMISSIBLE UNDER THE ACT AND THE BALANCE ONLY IS TO BE ADDED IN THE HANDS O F PARENT UNDER SECTION 64(1) OF THE ACT . ACCORDINGLY, WE HOLD SO. THE GROUND OF APPEAL NO.2 RAISED BY THE ASSESSEE IS THUS, ALLOWED. 2 3 . IN THE RESULT, BOTH THE APPEALS OF ASSESSEE ARE ALLOWED. ORDER PRONOUNCED ON THIS 31 ST DAY OF OCTOB ER , 201 7 . SD/ - SD/ - (ANIL CHATURVEDI) (SUSHMA CHOWLA) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; DATED : 31 ST OCTO BER , 201 7 . G G C C V V S S R R / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPONDENT; 3. ( ) / THE CIT (A) - 4, PUNE ; 4. THE PR. CIT - 1 , PUNE ; 5. , , / DR B , ITAT, PUNE; 6. / GUARD FILE. / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE