2019 (2) TMI 1318

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....ng Officer (AO) under s. 143(3) of the Income Tax Act, 1961 (the Act) concerning AY 2013-14. 2. As per the grounds of appeal, the assessee has challenged the action of the Revenue authorities in denying deduction under s.54F of the Act amounting to Rs. 2,67,18,560/-. 3. Briefly stated, the assessee, an individual filed its return of income for AY 2013-14 belatedly under s.139(4) of the Act on 31.03.2014 declaring a total income of Rs. 6,996/- therein. The return filed was subjected to scrutiny assessment. In the course of the scrutiny assessment, the AO noticed that the assessee has sold certain urban agricultural land at Gota, Ahmedabad at a sale consideration of Rs. 3,50,00,000/- and after reducing index cost of acquisition of Rs. 8....

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....) of the Act. The assessee accordingly pleaded before the AO that the inability of the assessee to deposit the money within the due date under s.139(1) of the Act should be borne in mind and deposit in the later period within the due date under s.139(4) of the Act should be taken as sufficient compliance of Section 54F of the Act by granting liberal construction to the beneficial provision. 3.2 The AO however did not pay any heed to such arguments and held that Section 54F(4) of the Act requires that such deposit in capital gain account scheme cannot be made later than due date applicable to the assessee for furnishing the return of income under s.139(1) of the Act. The AO accordingly declined to grant exemption of Rs. 2,67,18,560/- clai....

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....r s.139(1) of the Act. The other plank of contention being that time limits under s.139(4) of the Act should be reckoned for the purpose of eligibility of deduction under s.54F of the Act. The learned AR for the assessee relied upon the decision of the co-ordinate bench in Sunayana Devi vs. ITO ITA No. 996/Kol/2013 order dated 13.09.2017 and Mrs. Seema Sabharwal vs. ITO ITA No. 272/Chd/2017 order dated 05.02.2018 for this purpose. 8. The learned DR, on the other hand, relied upon the Revenue authorities. 9. We have carefully considered the rival submissions. The central controversy in the instant case is towards allowability of deduction under s.54F of the Act having regard to the deposits made in the designated capital gain account s....

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....ehalf and such return shall be accompanied by proof of such deposit; and, for the purposes of sub-section (1), the amount, if any, already utilised by the assessee for the purchase or construction of the new asset together with the amount so deposited shall be deemed to be the cost of the new asset: Provided that if the amount deposited under this sub-section is not utilised wholly or partly for the purchase or construction of the new asset within the period specified in sub-section (1), then,- (i) the amount by which- (a) the amount of capital gain arising from the transfer of the original asset not charged under section 45 on the basis of the cost of the new asset as provided in clause (a) or, as the case may be....

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....he designated scheme before the date of filing of return of income. At this juncture, we straightway notice that the legislature in its own wisdom has used the expression; Section 139 of the Act with reference to second limb i.e. purchase etc. of new asset, while on the other hand, the time limit was under s.139(1) of the Act has been specified for deposit in capital gain account scheme. Thus, when viewed, the distinction between the two different forms of expression of time limit can yield different results. While Section 139 used with reference to purchase of new asset is possibly open to varied interpretation i.e. time limit under s. 139(1) of the Act as well as extended time under s.139(4) of the Act, the time limit provided for deposit....