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IV. Useful Case Laws:
1. Shri Vivek Jairazbhoy Vs. Dy. CIT, ITA No. 236/Bang/2012, Date of Pronouncement: 14.12.2012, ITAT – Bangalore
Section 54EC limit of Rs. 50 Lakh applies to financial year not to transaction
It is clear from the Circular no.3/2008
of CBDT (supra) that the Government only intended to restrict the
investment in a particular financial year and thus has fixed a limit of
Rs.50 lakhs as permissible investment in a particular financial year.
We are of the
considered view that it would be in the fitness of things, to follow the
decision of the ITAT, Ahmedabad Bench in the case of Aspi Ginwala &
Others (supra) relied on by the assessee and hold that the assessee is
entitled to total deduction under section 54EC of the Act spread over a period of two financial years @ Rs.50 lakhs each on investments made in specified instruments within a period of six months from the date of sale of the property.
(Please click here for judgment)
2. Gujarat Mineral Dev. Corpn. Ltd., Vs. ACIT, ITA Nos. 128, 186/ Ahd/2005, Date of order: 25. 05.2012, ITAT - Ahmedabad
Expenditure to set-up a new line of business is capital expenditure
Interest expenditure under section 36(1)(iii)
will be allowable if it is found that borrowed funds were used for the
purpose of setting up of a new unit of the existing running business. In
the instant case, the borrowed funds were not used for setting up of a
new unit of an existing running business, but it was setting up of a new
unit for production of an altogether new product, i.e., power; whereas
the existing business of the assessee was production of lignite. Since this aspect is not fulfilled, even interest expenditure is not allowable under section 36(1)(iii).
(Please click here for judgment)
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