TaxTMI 
TaxTMI 
2012 (7) TMI 555
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....allowing the claim of the appellant u/s 54F to the tune of Rs. 27,44,063. 1.3. Learned Commissioner of Income-tax (Appeals) erred in confirming the decision of the assessing officer to the effect that appellant did not deposit the sale consideration, on sale of shares, in capital gains account scheme before due date for furnishing return and hence appellant is not eligible for deduction u/s 54F, except to the extent of Rs. 3 lakh, allowed by CIT (A) u/s 54F, which amount was paid by the appellant to the builder before the said due date for construction of a flat at Velachery Chennai. 1.4 They failed to appreciate that appellant not having filed his return of income for AY 2008-09 within the time allowed u/s 139(1), is elig....
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....e assessee had not deposited the sale consideration in the capital gains account scheme before the due date for furnishing of return. 4. The brief facts of the case are that during the year under consideration the assessee derived long term capital gains of Rs. 38,64,751/- on sale of shares. The assessee claimed deduction u/s 54F of the Act for Rs. 27,44,063/- in his return of income on the ground that he has invested the capital gains in acquisition of a residential flat at Chennai. The Assessing Officer found that the due date for filing of return of income by the assessee was 31.7.2008 and the assessee should have either invested the entire sale consideration in the residential flat or in capital gains account with any authorized bank....
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....to encourage owning of house so that shortage of housing can be overcome and that the assessee has invested major portion of the sale consideration in a residential house which was the only house owned by the assessee and therefore, too narrow and strict interpretation of section 54F(4) of the Act may not be called for. He submitted that the assessee having filed his return of income on 9.1.2009 which was before the due date for filing of return of income u/s 139(4) was entitled to exemption u/s 54F to the extent of amount paid to the builder before 31.3.2009 i.e. Rs. 15 lakhs. Therefore, the CIT(A) should have allowed deduction of the balance amount of Rs. 12 lakhs u/s 54F also. He placed reliance on the following decisions: (a) C....
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.... the assessee is eligible for deduction u/s 54F with reference to the amount of Rs. 3 lakhs which he invested for the purchase of new residential house before 31.7.2008 as held by the CIT(A) or with reference to Rs. 15 lakhs which was invested by the assessee up to 9.1.2009 as claimed by the assessee before us. 10. The assessee, in support of his contention, has placed reliance on the decisions of Ms. Jagriti Aggarwal's case (supra), Fathima Bai (supra) and Rajesh Kumar Jalan (supra). 11. On the other hand, the DR supported the order of the CIT(A) and placed reliance on the decision of the Hon'ble Kerala High Court in the case of V.R. Desai (supra). 12. We find that the relevant provisions of sub-section (4) of section 54F ....
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....efore 9.1.2009 qualifies for consideration with reference to which deduction u/s 54F(1) is to be computed. Thus, the CIT(A) was not justified in holding that only the amount which was utilized by the assessee before 31.3.2008 only qualifies for deduction u/s 54F of the Act. The assessee claimed before us that Rs. 15 lakhs was utilized by him for the purchase of new residential flat on or before 9.1.2009. We, therefore, set aside the orders of the lower authorities on this issue and direct the Assessing Officer to verify the amount which was invested by the assessee before the date of furnishing of return of income u/s 139 by the assessee and thereafter allow the deduction u/s 54F(1) with reference to the said amount as per law. Needless to ....