2018 (1) TMI 1065

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....t assessee is an individual who is a retired public servant deriving income from House Property, Capital Gain on sale of immovable property, dividend, interest etc. Assessee filed his return of income for A.Y.2009-10 on 22.07.2009 declaring total income of Rs. 4,40,939/- and claiming refund of Rs. 27,597/-. Return was processed u/s.143(1) with assessed income of Rs. 29.48.720/- raising demand of Rs. 6,31,9307-. Assessee filed an application for revision of this order u/s.264, before the Ld. CIT-16, Mumbai and who passed order u/s.264 on 13.03.2013, Assessment u/s.143(3) r.w.s.264 of the IT. Act, 1961 was completed by the Ld. A.O. on 30.12.2013 determining total income of Rs. 19,56,220/-. 5. During the year under consideration, the assess....

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.... only. (b) The capital gain should arise from transfer of a long-term capital asset. (c) Such long term capital asset (referred to as 'original asset') should be a residential house and the income from such house should be assessable under the head 'Income from House Property'. (d) If the assessee has either purchased a residential house one year before the date of transfer of original asset or two years after the date of transfer of original asset or constructed a residential house within a period of 3 years from the date of transfer of original assets, the long term capital gain resultant from transfer of original asset shall be dealt with as follows: (1) If the long term capital gain fr....

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....ose of the section is to encourage investment in new residential house within specified period and not to encourage investment under 'Capital Gain Account Scheme, 1988'. As the purchase or construction of residential house is a difficult and time consuming decision, it may not be possible for the assessees to invest in new residential house before the due date of filing of Return of Income. Therefore, sub-section (2) was enacted to ensure that the proceeds of sale of original assets are available to the assessee in the intervening period for investment in residential house and are not frittered away. However, where the assessee invested the sale proceeds in FDR instead of the Capital Gain Account Scheme, 1988 and acquired the house ....

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....onsidered view Sec.54 is an incentive provisions and it should be interpreted and applied liberally as held by the honourable Supreme Court in the case of Bajaj Tempo Ltd. Vs. C.I.T. (196 ITR 188). The honourable Supreme Court also held in the case of C.I.T. Vs. Gwalior Rayon Silk Manufacturing Co. Ltd. (196 ITR 149) that the expression used in the taxing statutes would primarily be understood in the sense in which it is harmonious with the object of the statute to effectuate the legislative intention. 11. Furthermore Hon'ble Supreme Court in case of Sanjeev Lal 365 ITR 389 observed as under:- "Income-tax on the long-term Capital gain. The intention of the Legislature or the purpose with which the said provision has been incorpo....