Strict compliance with section 54F deposit timing denied capital gains deduction when deposit missed the section 139(1) due date.

Section 54F relief requires strict compliance with the capital gains account scheme deposit condition. The statutory language of section 54F(4) links deposit of the net consideration to the due date under section 139(1), and depositing the amount only within the extended period under section 139(4) was held insufficient. Authorities dealing with purchase of a residential house were distinguished on their facts. As the deposit was not made within the prescribed due date, deduction under section 54F was denied.

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Issues: Whether the assessee was entitled to deduction under section 54F of the Income-tax Act, 1961 when the net consideration was deposited in the capital gains account scheme only after the due date prescribed under section 139(1), but within the extended time under section 139(4).

Analysis: The deposit requirement under section 54F(4) was held to be explicit and unambiguous. For deposit in the capital gains account scheme, the statutory text ties the time limit to the due date under section 139(1), and the broader time under section 139(4) was not accepted as sufficient compliance. The exemption provision was construed strictly, and the cited authorities on purchase of a residential house on their own facts were distinguished.

Conclusion: The assessee was not entitled to deduction under section 54F because the deposit in the designated account was not made within the due date under section 139(1).

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