Simultaneous Deduction of 2 Exemptions 54EC & F

The Assessing Officer denied the benefit claimed by the assessee under section 54 EC towards the investment made in REC bonds for a sum of Rs. 50 lakh out of total long-term capital gain of Rs. 3.40 crores. The Assessing Officer was of the view that once the exemption has been claimed under section 54F and the entire capital gain has not been utilised for the purchase of residential house, then the net consideration which is not appropriated by the assessee towards the purchase of new asset and also not deposited in the banks or institution as specified and notified in the official Gazette by the Central Government as per the provisions of sub section (4) of section 54F, the assessee cannot avail the exemption under section 54 EC. It is to be noted that it is not a case of availing double exemption on the same amount but the assessee has claimed exemption under section 54F as well as under section 54 EC for the respective amount of capital gain invested in purchase of new house and REC bonds. Wherever any such restriction is deemed fit, the legislature has provided in the statute a sufficient check under chapter VI-A of the Income Tax Act. As far as the claim of exemption under section 54F and under section 54 EC, there is no such restriction in the statute that the assessee cannot claim the exemption under both sections, even if the conditions provided under the respective sections are complied with and the same does not result in availing double exemption on the same amount.