AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2019 (5) TMI 403
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....the circumstances of the case and in law, the CIT(A) erred in partly confirming the action of the AO in not granting exemption u/s 54 of the Act to the extent of Rs. 60,79,680 as against claim of Rs. 1,44,51,461 (thereby allowing partly at Rs. 83,71,781) against sale of residential flat situated at Sewree, Mumbai claimed by investing the realized long term capital gains in a new residential flat at Parel, Mumbai within 2 years and/or constructed within 3 years from the date of sale. 3) On the facts and circumstances of the case and in law, the learned CIT(A) legally erred in confirming the consequential chargeability of interest u/s 234B. 4) On the facts and circumstances of the case and in law, the CIT(A) erred in confirming the initiation of penalty proceedings u/s 271(l)(c) of the Act. 5) The appellant craves leave of your Honours to add to, alter, amend and/or delete all or any of the grounds on or before the date of hearing and further prays that additional income so assessed and expenditure disallowed be deleted and allowed. 2. Briefly stated, the assessee had e-filed his return of income for A.Y 2013-14 on 31.07.2013, declaring total income of Rs. 61,40,881/-. The....
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....re the CIT(A). The assessee in the course of the appellate proceedings in order to substantiate his claim of having invested the amount towards purchase of the new residential property viz. Cresent Bay, L&T Parel Project, Mumbai, therein furnished the details of the payments made in respect of the said investment, as under:- Sl. No Milestone Due date Date of Payment Amount (Rs.) Service Tax (Rs) Total (Rs) 1 Application Money OB-Nov-12 28-Oct-12 10,67,029 32,971 11,00,000 2 Earnest money 06-Dec-12 29-NOV-12 70,53,818 2,17,963 72,71,781 3 On Completion of Podium Plinth 05-Oct-13 05-0ct-13 47,01,543 1,74,333 48,75,876 4 2nd Podium Floor Slab 24-Dec-13 24-Dec-13 21,37,065 79,242 22,16,307 5 5th Podium Floor Slab 06-Feb-14 06-Feb-14 21,37,065 79,242 22,16,307 6 2nd Floor Slab 11-May-14 10-May-14 23,50,772 87,167 24,37,939 7 7th Floor Slab 12-Jul-14 12-Jul-14 23,50,772 87,167 24,37,939 8 12th Floor Slab 16-Sep-14 15-Sep-14 23,50,772 87,167 24,37,939 9 18th Floor Slab 02-Dec-14 12-Dec-14 23,50,772 87,167 24,37,939 Stamp Duty 23-Dec-14 23-Dec-14 21,37,100 - 21,37,100 VAT 08-Jan-15 23-De....
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....f his return of income for the year under consideration i.e A.Y 2013-14. In the backdrop of his aforesaid deliberations the CIT(A) concluded that the assessee was entitled for exemption of an amount of Rs. 83,71,781/- u/s 54, i.e. the amount which was invested by him up till the "due date" of filing of his return of income. Resultantly, the CIT(A) directed the A.O to restrict the disallowance of the exemption claimed by the assessee under the aforesaid statutory provision to the extent of Rs. 60,79,680/-. The CIT(A) while concluding that only the amount invested before filing of the return of income by the assessee would be eligible for exemption u/s. 54, relied on the judgment of the Hon'ble High Court of Bombay in the case of Humayun Suleman Merchant Vs. Chief Commissioner Of Income-Tax (2016) 242 Taxman 189 (Bom). 6. The assessee being aggrieved with the order of the CIT(A) to the extent he had upheld the disallowance of his claim of exemption u/s. 54 of the I.T Act, has carried the matter in appeal before us. The Ld. Authorised Representative (for short 'A.R') for the assessee took us through the facts of the case. It was submitted by the Ld. A.R that as the assessee had inve....
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..... Further, the appeal filed by the assessee was dismissed by the Tribunal. On further appeal filed by the assessee, the Hon'ble High Court held that the Tribunal was right in holding that the A.O had rightly computed the deduction u/s. 54(F) by restricting the exemption u/s 54F proportionately to the amount invested by the assessee. In sum and substance, the Hon'ble High Court observed that the payment of Rs. 35 lac made by the assessee towards purchase of the new residential flat viz. (i) 17.07.1996 (Rs. 10 lac) ; (ii) 23.10.1996 (Rs. 10 lac); and (iii) 01.11.1996 (Rs. 15 lac) was eligible for being considered for computing the exemption u/s 54F in the hands of the assessee. Admittedly, the Hon'ble High Court had held that the aforesaid amount of Rs. 15 lac paid by the assessee on 01.11.1996 i.e after the "due date" for filing of the return of income was also eligible for being considered while computing the assesses entitlement towards claim of the exemption u/s. 54F of the I.T Act. 7. We shall now advert to the issue under consideration in the backdrop of our aforesaid observations. The issue involved in the present appeal lies within a narrow compass. Admittedly, the assessee....
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.... had deposited the amount of such capital gain in the CGAS account with the specified bank by the 'due date' contemplated under Sec. 139(1) of the IT Act. Further, in case if any part of the capital gain had already been utilized by the assessee for the purchase or construction of the new asset, the amount of such utilization along with the amount so deposited shall be deemed to be the cost of the new asset. On the basis of our aforesaid deliberations, we are of the considered view that the outer limit for the purchase or construction of the new asset as per sub-section (2) of Sec. 54 is the date of furnishing of the 'return of income' by the assessee under Sec.139. On a plain and literal interpretation of the aforesaid statutory provision, it can safely be gathered that the conscious, purposive and intentional providing by the legislature of "date of furnishing the return of income under Sec.139" cannot be substituted and narrowed down to Sec.139(1) of the IT Act. In our considered view the date of furnishing of the return of income under Sec.139 would safely encompass within its sweep the time limit provided for filing of the 'return of income' by the assessee under Sec.139(4) as....
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....n'ble High Court of Bombay in the case of Humayun Suleman Merchant Vs. Chief Commissioner of Income-Tax (2016) 242 Taxman 189 (Bom), had observed as under : " 4.2 We have heard the rival submissions and perused the relevant materials on record. The reasons for our decisions are given below. In the case of Humayun Suleman Merchant (supra), the Hon'ble Bombay High Court has held that (i) amounts subject to capital gain on sale of capital asset for purpose of exemption has to be utilized before date of filing of return of income, (ii) mandate of section 54F(4) is clear that the amount which has not been utilized in construction and/or purchase of property before filing return of income, must necessarily be deposited in an account duly notified by Central Government, so as to be exempted, (iii) where assessee had filed return of income and entire amount which was subject to capital gains tax had not been utilized for purpose of construction of new house nor were unutilized amounts deposited in notified Bank Accounts in terms of section 54F(4) before filing return of income, the AO has rightly computed deduction u/s 54F, restricting exemption u/s 54F proportionately to amount inve....
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....therein, in the context that the unutilized portion of the capital gains on the sale of property used for residence should be deposited before the date of furnishing the return of income u/s 139 of the Act and section 139 cannot mean only section 139(1) but it means all sub-sections of section 139. In the instant case, the assessee filed her return of income for the impugned assessment year on 20.06.2011 declaring the total income of Rs. 6,90,42,239/-. Subsequently, she revised her return of income on 24.07.2012 at a total income of Rs. 3,37,72,410/-. In the revised return of income, the assessee claimed exemption u/s 54 of the Act. As per the details filed in the Paper Book (P/B) at page 10, the assessee remitted an amount of Rs. 9,00,000/- to Australia on 4th March 2011 and further remitted Rs. 2,90,00,000/- on 11 August 2011 and also remitted Rs. 2 crore on 4th June 2012 from her Standard Chartered Bank Account. In view of the above factual scenario, we follow the ratio laid down in aforementioned decisions and dismiss the 2nd ground of appeal. 5. Finally, we come to the 3rd ground of appeal. In the instant case the assessee had inherited the house property at Chennai from....