TaxTMI 
TaxTMI 
2019 (7) TMI 1058
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....turn of income relating to the assessment year 2016-2017. On verification of the same, show-cause notice under Section 142(3) of the Income Tax Act 1961 (for short 'the Act') dated 28.2.2018 has been issued to subject the proportionate unutilised deposit in capital gain account scheme, of Rs. 91,89,609/- to taxation as the income of the petitioner for the assessment year 2016-17. Being aggrieved by the same, the petitioner is before this court. 3. The petitioner had sold two properties i.e., 1) Land in 61-C, Marthahalli, ITI Employees Housing Society Layout, Bangalore 560 056 in May 2012 for Rs. 1,19,20,000/- 2) Land situated in Yerlapdy, Udupi in January 2013 for Rs. 4,00,000/-. 4. Out of the aforesaid sale consideration amount, Rs. 1,15,00,000/- was deposited by the petitioner in the Capital Gain Account Scheme, 1988, with Syndicate Bank, Brahmagiri Branch, Udupi and Vijaya Bank Main Branch, Udupi. The return of income for the Assessment year 2013-14 was filed on 14.7.2013 and exemption was claimed under Section 54F of the Act. In the meantime, the petitioner had purchased a flat for Rs. 21,32,470/- (including stamp duty and registration) on 20.08.2013 bef....
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....l asset took place, or which is not utilised by him for the purchase or construction of the new asset before the date of furnishing the return of income under section 139, shall be deposited by him before furnishing such return [such deposit being made in any case not later than the due date applicable in the case of the assessee for furnishing the return of income under sub-section (1) of section 139] in an account in any such bank or institution as may be specified in, and utilised in accordance with, any scheme which the Central Government may, by notification in the Official Gazette, frame in this behalf and such return shall be accompanied by proof of such deposit ; and, for the purposes of sub-section (1), the amount, if any, already utilized 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 utilized wholly or partly for the purchase or construction of the new asset within the period specified in subsection (1), then,- (i) the amount by which- (a) the amount of capital gain arisin....
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.... with Section 54(2), 54 B(2) of the Act. Section 54(1) of the Act reads thus: "54 (1) - Subject to the provisions of sub-section (2), where, in the case of an assesse being an individual or a Hindu undivided family], the capital gain arises from the transfer of a long-term capital asset, xxxxxxxx (2) The amount of the capital gain which is not appropriated by the assessee towards the purchase of the new asset made within one year before the date on which the transfer of the original asset took place, or which is not utilised by him for the purchase or construction of the new asset before the date of furnishing the return of income under section 139, shall be deposited by him before furnishing such return [such deposit being made in any case not later than the due date applicable in the case of the assessee for furnishing the return of income under sub-section (1) of section 139] in an account in any such bank or institution as may be specified in, and utilised in accordance with, any scheme which the Central Government may, by notification in the Official Gazette, frame in this behalf and such return shall be accompanied by proof of such deposit; a....
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....ded as per Section 54 F(1). Section 54F[4] do not waive of the payment of tax under Section 45 if the amount deposited under the said section is not utilized wholly or partly for the purchase or construction of the new asset. The words employed in the proviso are "not utilized wholly or partly" not "utilized wholly or partly", the negation clause 'not' in the construction of the sentence makes the difference. The interpretation suggested by the petitioner would have been countenanced if the language employed is 'utilised wholly or partly' For eg., If the amount deposited under Section 54 F(4) is Rupees one crore in the capital gain account scheme, an amount of Rupees Forty lakhs is utilized for the purchase of the new asset, unutilized amount would be Rupees Sixty lakhs. 'Not utilised partly' applies to the said Sixty lakhs. The reasonable interpretation is 'not utilized partly' means the balance amount available in the capital gain deposit scheme after the expiry of the period of three years from the date of the transfer of the original asset. 13. The phrase "not utilized wholly or partly" refers to two eventualities. In the aforesaid given example, (i) the entire amou....
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....V/s. Union of India MANU/SC/0086/1962 : [(1964) 1 SCR 371], the Hon'ble Apex Court has held thus: "The Court must ascertain the intention of the Legislature by directing its attention not merely to the clauses to be construed but to the entire statute; it must compare the clause with the other parts of the law, and the setting in which the clause to be interpreted occurs." 17. In Reserve Bank of India V/s. Peerless General Finance and Investment Co. Ltd. [1987] 2 SCR 1, the Hon'ble Apex Court has held thus: "Interpretation must depend on the text and the context. They are the bases of interpretation. One may well say if the text is the texture, context is what gives the colour. Neither can be ignored. Both are important. That interpretation is best which makes the textual interpretation match the contextual. A statute is best interpreted when we know why it was enacted. With this knowledge, the statute must be read, first as a whole and then section by section, clause by clause, phrase by phrase and word by word. If a statute is looked at, in the context of its enactment, with the glasses of the statute maker, provided by such context, its scheme, th....