TaxTMI 
TaxTMI 
2012 (7) TMI 460
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..... The facts indicate that during the previous year relevant to assessment year 2006- 07, the assessee sold a residential property in Bangalore for Rs.4,00,00,000/- on 29.4.2005 and long term capital gains of Rs.3,95,38,545/- was arisen in the hands of the assessee. 2.1 The assessee made the following two investment in residential properties: (i) Rs.3,65,00,000/- paid to Triumph Estate Private Limited for construction of a residential property in Bangalore. The construction was to be completed by 31st March, 2008. The following payments were made: Date of payment Amount (in Rs.) 10.03.06 50,00,000/- 18.02.06 2,50,00,000/- 27.07.06 30,00,000/ 22.08.06 35,00,000 Total: 3,65,00,000 (ii) Rs.1,9....
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....al gain u/s 54 of the Act of Rs.1,90,95,606/- based on the residential property occupied in Gurgaon instead of Rs.3,65,00,000/- being the payment made to builder for a new Bangalore property. The assessee paid the differential income tax along with interest thereon and produced the challans before the Assessing Officer. 2.6 The Assessing Officer agreed to the claim of the assessee but restricted the claim to Rs.1,76,33,244/- as against Rs.1,90,95,606/-, difference being the payment of Rs.14,62,363/- made by the assessee after the date of filing the income tax return for assessment year 2006-07." 2.7 Aggrieved by the order of Assessing Officer, the assessee took up the matter in appeal and filed written submissions before CIT(A), chall....
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....ction 139(4) would have no application. It is submitted that the contention of the Assessing Officer is not correct as the section 54 refers to complete section 139 and not to sub-section (1) only of section 139. v) The appellant is placing reliance on judgment of Gauhati High Court in the case of CIT vs. Rajesh Kumar Jalan (2006) reported at 286 I.T.R. 274. In this case, the Hon'ble High Court has found that the assessee, who had made the deposit after u/s 139(4) but before the due date u/s 139(4) and had utilized such deposit within the prescribed time was eligible for deduction u/s 54 of the Act." 3. The CIT(A) while considering, but not accepting the plea of the assessee has concluded to confirm the Assessing Officer's action. ....
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.... that language of the relevant provision is very much clear and deduction u/s 54(2) can only be allowed to the assessee in case the deposits of the sale proceeds is invested in the new asset within the due time prescribed for filing return of income u/s 139(1) of the Act. In this case, neither the assessee has deposited the surplus in the capital gain scheme nor invested the entire amount in the new asset as prescribed. Therefore, Assessing Officer is justified in making the disallowance of Rs.14,62,362/- out of Rs.1,90,95,606/- claimed u/s 54 of the Act from long term capital gain. Therefore, action of the authorities below to make/confirm the disallowance is legally correct which should be further confirmed. It was urged for confirmation ....
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....hin three years from the date of sale of the residential property at Bangalore on which the capital gain of Rs.3,95,38,545/- arose. However, while the assessment proceedings for assessment year 2006-07 were carrying on, the assessee was informed that due to reasons beyond the control of the builder, the construction would not be completed before the time limit to construct a residential house i.e., before 28.4.2008. (e) In the mean time, the assessee had taken the possession of the immovabale property at Park View Apartments within three years from the date of sale of the residential property at Bangalore on which the capital gain of Rs.3,95,38,545/- arose. (f) Based on the opinion taken from an expert, the assessee suo moto approache....
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....as taken in the hands of the previous owner. In view of these facts, we do not find any infirmity in the decision of CIT(A). Our view is supported by the decision of Special Bench of ITAT in the case of DCIT vs. Manjula J. Shah (supra). 10. Now, coming to second issue, the Hon'ble Punjab & Haryana High Court in the case of CIT vs. Miss Jagriti Aggarwal (supra) has held that sub-section (4) of section 139 provides the extension period of limitation as an exception to subsection (1) of section 139 of the Act. Sub-section (1) was in relation to the time allowed to an assessee under sub-section (1) to file the return. Therefore, such provision was not an independent provisions, but relates to the time contemplated under sub-section (1) of se....