2019 (3) TMI 384

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....13-14 vide order dated 11.03.2016 under section 143(3) of the Income Tax Act, 1961 (hereinafter 'the Act'). 2. The only issue in this appeal of assessee is against the order of CIT(A) confirming the action of the AO in disallowing the claim of deduction of long term capital gain claimed under section 54 of the Act on the ground that the assessee has neither utilized nor deposited full capital gain in the capital gain account scheme till the date of filing of return of income under section 139 of the Act for the relevant assessment year. For this assessee has raised the following two grounds: - "1. The ld. CIT(A) erred in confirming the disallowance of deduction of LTCG u/s 54 of the Act at Rs. 77,43,425/- on the ground that the ....

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.... that for availing exemption under section 54F, the concerned return of income under section 139(1) should have been filed within the time stipulated under section 139(1) of the Act. However, no return of income was filed under section 139(1) of the Act. It was further noted that as per condition, the unutilized capital gain should have been deposited in a specified capital gain scheme in any of the bank or institution notified by the Central Government. Such deposits should have been made before furnishing return of income under section 139(1) of the Act and conditions prescribed under section 54 of the Act, the AO declined the claim of exemption under section 54F of the Act. The CIT(A) also confirmed the action of the AO. Aggrieved, as....

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....f new house till the date of filing return 18.11.2008 should be allowed. ITAT followed the Bombay High Court Humayun Suleman Merchant and matter set aside for verification. 5. We find that this issue has been considered by Hon'ble Bombay High Court in the case of Humayun Suleman Merchant (supra), wherein it is held that if the amount is utilized before the last day of filing of return of income under section 139 of the Act than the provisions of section 54(2) of the Act would not hit the assessee. The Hon'ble Bombay High Court held as under: - v) Lastly and in the alternative, it is submitted by Mr. Chatterji, that as the entire amount has been paid to the developer/builder before the last date to file the return of Income under....

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....tilized before the date of filing of return of income. In this case 4th November, 1996 is the date of filing the return of Income. It is not disputed that on 4th November, 1996 when the return of income was filed, the entire amount which was subject to capital gain tax had not been utilized for the purpose of construction of new house nor were the unutilized amounts deposited in the notified Bank Accounts in terms of Section 54F(4) of the Act before filing the return of income. It is also to be noted that in line with the interpretation of Gauhati High Court on Section 54F(4) of the Act, the Assessing Officer had taken into account all amounts utilized for construction of a house before filing the return of income on 4th November, 1996 for ....