TaxTMI 
TaxTMI 
2019 (7) TMI 1073
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....t shall be deposited with in time limit u/s. 139(1) of the Act as per Central government notification in the official Gazette, and such return shall be accompanied by proof of such deposit with in due date of filing of Return as per prescribed time limit u/s. 139(1) of the IT Act." 2. "On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the disallowance of Rs. 82,89,448/- on account of exemption u/s. 54F of the IT Act. Further the legislature would not have emphasized that such deposit being made in any case later than the due date applicable in the case of the assessee for furnishing the return of income under sub section 1 of the section 139." 3. "The appellant prays that the order of the CIT(A) on the above grounds be set aside and that of the assessing officer be restored. 4.The appellant craves leave to amend or to alter any ground or add a new ground, which may be necessary. 4. As per the facts of the present case are that the assessee is an individual and is earning income in the form of income from salary, capital, gain and income from other sources. The return of income had e-filed on 27.08.2013 declaring total inco....
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....re two different dates specified for the investments u/s 54F of the Act. According to Ld. DR, in the first situation where the utilization of sale consideration are made for purchase/construction of property before the date of filing the return, it was mentioned as before the date of furnishing the return of income u/s 139 of the Act. It was further submitted that in the second situation, where the amounts are to be deposited in the specified modes it was mentioned as 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 section 1 of section 139 of the Act. Thus, according to Ld. DR, it is clear that the time limits for the purpose of utilization of sale proceeds for purchase/construction of property before the date of filing of return and for the purposes of making deposits in the specified modes are totally different. According to Ld. DR, in the former case, it was the date of filing the return u/s 139 of the Act, however, in the later situation it was the date to file return u/s 139(1) of the Income Tax Act. 9. Ld. DR relied upon the judgment of Hon'ble Supreme court in the case of P....
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....i) Now, as pointed out by AO and as evident from isolated reading of provisions of sub section 4 of section 54F, the unutilised amount, if any was to be deposited in capital gain scheme account before due date of filing return as provided in sub section 1 of section 139 of ITA. iii) From joint reading of the entire sub section 4 of section 54F, the legislature has prescribed due date for utilization of sale consideration is as provided under section 139 of ITA, Now, as per provisions of section 139(4) of the ITA, the due date is one year from end of the relevant assessment year, in this case being 31.03.2015. The purchase of new assets was made on 10.06.2014, being within the time provided. The assessee in support of the said contention relies on the judicial precedents as below; iv) Hon 'ble Mumbai Bench of ITAT in case of Anil Kumar Omkar Singh Aurora v/s ITO 12(3) (4), Mumbai, held that section 139(4) has to be read along with sub section 1 of section 139 and the due date for furnishing the return of income u/s 139(1) is subject to the extended period provided u/s 139(4). Hence, extended period u/s 139(4) has to be considered for the purpose of utilisation of the capit....
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....lity of exemption u/s 54F of Rs. 82,35,592/-. The A.O. in the assessment order dated 11/02/2016, after considering the facts of the case, has disallowed the claim of the appellant u/s 54F of the IT Act.The AO had mentioned in the assessment order stated that the time limit for investment of sale proceeds towards purchase/construction of new assets was as provided u/s 139, whereas the time limit for deposit of sale consideration in capital gain scheme account was as provided u/s 139(1) of ITA. The AO in the assessment order on page number 3 states that; As per the provisions of section 54F of the Act, the amount of capital gain which is not appropriated by the assessee towards 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 due of furnishing of 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 assesseee for furnishing the return of income under sub-section 1 of section 139 in an accoun....
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....et), and the assessee has within a period of one year before or two years after the date on which the transfer took place purchased, or has within a period of three years after that date constructed, one residential house in India, then, instead of the capital gain being charged to income-tax as income of the previous year in which the transfer took place, it shall be dealt with in accordance with the following provisions of this section, that is to say,- (i) if the amount of the capital gain is greater than the cost of the residential house so purchased or constructed (hereafter in this section referred to as the new asset), the difference between the amount of the capital gain and the cost of the new asset shall be charged under section 45 as the income of the previous year; and for the purpose of computing in respect of the new asset any capital gain arising from its transfer within a period of three years of its purchase or construction, as the case may be, the cost shall be nil; or (ii) if the amount of the capital gain is equal to or less than the cost of the new asset, the capital gain shall not be charged under section 45; and for the purpose of computing in respect o....
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....re beneficial provisions and are to be considered liberally in the aspect of limitation. 5.6. Further stated that the Hon'ble High Court of Punjab and Haryana at Chandigarh, has held in the case of the Commissioner of Income Tax, Rohtak Vrs. Shri Jagtar Singh Chawala, that 'Sec 54F - Deposit in capital gains account scheme by sec 139(4) is the correct due date'. ITA No. 71 of 2012 (O&M). The Honourable High Court of Guwahati, in the case of Commissioner Of Income-Tax vs Rajesh Kumar Jalan on 9 August, 2006, 286 ITR 274, (Paras 6 and 11), held that from a plain reading of Sub-section (2) of Section 54 of the Income-tax Act, 1961, it is clear that only Section 139 of the Income-tax Act, 1961, is mentioned in Section 54(2) in the context that the unutilised portion of the capital gain on the sale of property used for residence should be deposited before the date of furnishing the return of the Income-tax under Section 139 of the Income-tax Act. Section 139 of the Income-tax Act, 1961, cannot be meant only Section 139(1) but it means all sub-sections of Section 139 of the Income-tax Act, 1961. 5.7 The Hon'ble Mumbai Bench of ITAT in case of Anil Kumar Omkar Singh Auro....
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....lso come up before the Hon'ble Guwahati High Court in the case of CIT V/s. Rajesh Kumar Jain (supra) and the Hon 'ble High Court has held that if the assessee fulfils the condition for exemption u/s.54 within the extended time of filing of return u/s. 139(4) of the Act.Jhe assessee is entitled to exemption u/s.54 of the Act. In view of above, we hold that the assessee is entitled to claim deduction u/s.54F of the Ac for utilization of sale consideration for investment in new residential property within due date as stipulate u/s 139 of the Act. Hence, grounds of appeal taken by assessee are allowed by reversing the orders of authorities below. 5.8 The Hon'ble Mumbai Bench of Tribunal in the case of Kishore H.Galaiya V/s.ITO [2012] 24 taxmann.com 11 (Mum), wherein on identical facts and circumstances, the issue has been decided in favour of the assesse. The Hon'ble Mumbai bench of ITAT discussed at length the provisions of section 54 with respect to due dates mentioned in section 139(1) and 139(4) of the I.T.Act. Finally the Hon'ble Mumbai bench of the ITAT held that if investment in new asset is made within the date as stated u/s 139(4) of I.T.Act, then the ex....
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...., or any earlier assessment year, the reference to one year aforesaid shall be construed as a reference to two years from the end of the relevant assessment year." A regarding of the aforesaid sub-section would show that if a person has not famished the return of the previous year within the time allowed under sub-section (1), i.e. before the 31st day of July of the assessment year, the assessee can file return before the expiry of one year from the end of the relevant assessment year. The sale of the asset having taken place on January 13, 2006, falling in the year 2006-2007, the return could be filed before the end of the relevant assessment year 2007-08, i.e., March 31, 2007. Thus, subsection (40 of section 139 provides the extended period of limitation as an exception to sub-section (1) of section 139 of the Act. Sub-section (4) is in relation to the time allowed to an assesse under subsection (1) to tile return. Therefore, such provision is not an independent provision, but relates to time contemplated under sub-section (1) of section 139. Therefore, such sub-section (4) has to be read along with sub-section (1). Similar is the view taken by the Dvision Bench of the Karn....
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....on to deposit within the stipulated time was duly satisfied and the 2nd condition to buy a new house property within a limited time frame was also duly satisfied by the appellant. According to the provisions of section 54 of the Act, an assessee has an option to claim deduction against long term capital gain on transfer of a residential flat, provided he/she invests within a period of one year before or two years after the date on which the transfer takes place to purchase or within a period of three years after that date to construct, one residential house in India. The appellant has duly acquired a new house property within 2 years from the date of the original transfer of flat and has accordingly rightly claimed deduction us/ 54 of the Act. Section 54 only provides that the assessee has to purchase a house property for the purpose of his own residence within a period of one year before or after the date on which the transfer of his property took place or he should have constructed a house property within a period of two years after the date of transfer. It was further held that entitlement of exemption under Section 54 relates to the cost of acquisition of a new estate in the na....
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....id investment in new asset was made within the period of 2 years from the date of sale and the entire sale consideration was invested in purchase of new asset. The Purchase price of new assets being Rs. 1, 58, 10, 000.00 and the sale consideration was Rs. 85,60,916.00. The A.O. disallowed the claim of assessee u/s 54F of the IT Act by holding that the time limit for investment of sale proceeds towards purchase/construction of new assets was as provided u/s 139, whereas the time limit for deposit of sale consideration in capital gain scheme account was as provided u/s 139(1) of IT Act. 14. We are of the view that section 54F of the Act only talks about deposit within the prescribed time period. Even on the plain reading of Sub-section (2) of Section 54 of the Income-tax Act, 1961, it is clear that only Section 139 of the Income-tax Act, 1961, is mentioned in Section 54(2) in the context that the unutilised portion of the capital gain on the sale of property used for residence should be deposited before the date of furnishing the return of the Income-tax under Section 139 of the Income-tax Act. In our view, section 139 of the Income-tax Act, 1961, cannot be meant only Section 139(1....