2019 (2) TMI 1318 - AT - Income Tax

Appeal Dismissed: Deposit Timing Crucial for Tax Benefits

Smt. Hansaben Pravinbhai Patel Versus The Income Tax Officer, Ward-3 (3) (2), Ahmedabad

Smt. Hansaben Pravinbhai Patel Versus The Income Tax Officer, Ward-3 (3) (2), Ahmedabad - TMI Issues involved:1. Denial of deduction under section 54F of the Income Tax Act.2. Interpretation of the provisions of section 54F regarding the time limit for deposit in the capital gain account scheme.Detailed analysis:1. The appeal was filed by the Assessee against the order of the Commissioner of Income Tax (Appeals) denying deduction under section 54F of the Income Tax Act amounting to Rs. 2,67,18,560. The Assessee sold urban agricultural land and claimed exemption under section 54F for the entire capital gains deposited in the capital gain account scheme. The Assessing Officer denied the exemption as the deposit was made after the due date under section 139(1) of the Act. The CIT(A) upheld the AO's decision, leading to the appeal before the Tribunal.2. The main issue revolved around the interpretation of section 54F(4) of the Act concerning the time limit for deposit in the capital gain account scheme. The Assessee argued that the deposit within the extended due date under section 139(4) should suffice for eligibility. However, the AO held that the deposit must be made before the due date under section 139(1) for furnishing the return of income. The Tribunal analyzed the provisions of section 54F(4) and emphasized that the net consideration must be utilized for deposit before the due date of filing the return of income under section 139(1). The Tribunal referred to the strict construction of beneficial provisions and the Supreme Court's decision in Dilipkumar & Co. case, concluding that the Assessee's deposit after the due date specified under section 139(1) did not align with the provisions of section 54F(4).3. The Tribunal dismissed the Assessee's appeal, stating that the clear mandate of section 54F(4) required the deposit to be made before the due date under section 139(1) and that the Assessee's argument for eligibility of deposits after that time limit was not in accordance with the law. The Tribunal distinguished the cases cited by the Assessee, where the consideration was invested for purchase of a residential house, from the present case, which dealt with deposit in the scheme. The decisions cited did not have the benefit of the interpretation of beneficial provisions by the Supreme Court, leading to the dismissal of the appeal.