TaxTMI 
TaxTMI 
TaxTMI 
2017 (10) TMI 1481
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....d claimed exemption u/s. 54B of the Act. During the course of scrutiny assessment proceedings, the Assessing Officer discovered that three parcels of land were purchased by the assessee for aggregate consideration of Rs. 71,56,000/-after due date for filing return of income u/s. 139(1) of the Act had elapsed. As per documents on record, the aforesaid three pieces of agricultural land on which the Assessing Officer disallowed the benefit of exemption u/s. 54B were purchased in the month of August, 2012, whereas, the due date for filing return of income u/s. 139(1) was 30.09.2011. Aggrieved by the assessment order dated 10.02.2014, the assessee filed appeal before the Commissioner of Income Tax(Appeals). The Commissioner of Income Tax(Appeals) upheld the findings of Assessing Officer and rejected the claim of assessee. 4. Now, the assessee is in second appeal before the Tribunal and has impugned the findings of Commissioner of Income Tax (Appeals) by raising following grounds: "1. On the facts and in the circumstances of the case and in law, the learned Assessing Officer has erred in not granting exemption u/s. 54B of the Income Tax Act, 1961 for the part of investment of Rs. ....
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....ovides for extension of period of due date for filing return of income in certain circumstances and, therefore, exemption u/s. 54 is allowable to the assessee where new property has been purchased before the extended due date for filing return of income as per section 139(4) of the Act. Further to buttress his submission, the ld. AR placed reliance on the following decisions: i) Smt. Shashi Varma Vs. CIT reported as 224 ITR 106 (MP) ii) CIT Vs. K. Ramchandra Rao reported as 277 CTR 522 (Kar) iii) CIT Vs. Ravinder Kumar Arora reported as 342 ITR 38 (Del) 6. On the contrary, Dr. Vivek Aggarwal representing the Department vehemently defended the findings of the Commissioner of Income Tax (Appeals) in rejecting assessee's claim of exemption u/s. 54B of the Act in respect of three properties purchased after due date of filing return of income as specified u/s. 139(1) of the Act. The ld. DR submitted that the provision of section 54B(2) are ambiguous. A bare perusal of the provision of sub section (2) would show that benefit of exemption u/s. 54B is permissible only if the new asset is purchased or capital gain is invested in specified bank account before the due date for furn....
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....under sub-section (1) of Section 139 of the Act. 9. The Hon'ble Gauhati High Court in the case of CIT Vs. Rajesh Kumar Jalan (supra.) while considering assessee's claim of exemption u/s. 54 where the assessee had deposited unutilized portion of capital gain in the specified scheme after the stipulated time for furnishing return of income u/s. 139(1) of the Act has expired held: "6. From a plain reading of sub-s (2) of s. 54 of the IT Act, 1961, it is clear that only s. 139 of the IT Act, 1961, is mentioned in s. 54(2) in the context that the unutilized 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 s. 139 of the IT Act. Sec. 139 of the IT Act, 1961, cannot be meant only as s. 139(1) but it means all sub-sections of s. 139 of the IT Act, 1961. Under sub-s.(4) of s. 139 of the IT Act any person who has not furnished a return within the time allowed to him under sub-s. (1) of s. 142 may furnish the return for any previous year at any time before the expiry of one year from the end of the relevant assessment year or before the completion of the assessment whichever is e....
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.... return before the expiry of one year from the end of the relevant assessment year. 12. The sale of the asset having taken place on 13th Jan., 2006, falling in the previous (sic-assessment) year 2006-07, the return could be filed before the end of relevant asst. yr. 2007-08 (sic-2006-07) i.e. 31st March, 2007. Thus, sub-so (4) of s. 139 provides extended period of limitation as an exception to sub-so (1) of s. 139 of the Act. Sub-so (4) is in relation to the time allowed to an assessee under sub-so (1) to file return. Therefore, such provision is not an independent provision, but relates to time contemplated under sub-so (1) of s. 139. Therefore, such sub-so (4) has to be read along with sub-so (1). Similar is the view taken by the Division Bench of Karnataka and Gauhati High Courts in Fatima Bai and Rajesh Kumar Jalan cases (supra) respectively." 11. The Hon'ble Punjab & Haryana High Court in another case CIT Vs. Jagtar Singh Chawla reported as 33 taxmann.com 38 following the ratio laid down in the case of Rajesh Kumar Jalan (supra.) allowed assessee's claim of exemption u/s. 54F where the assessee paid substantial amount of sale consideration for residential house within....
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....6 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 extending the benefit of exemption under Section 54F of the Act. Therefore, in the present facts, the decision of the Gauhati High Court in Rajesh Kumar Jalan's case (supra) would not apply so as to hold that the appellant had complied with the Section 54F(4) of the Act." 13. In the present case, the assessee has claimed exemption u/s. 54B of the Act. We observe that the provision of sub section (2) of Section 54, provision of sub section (2) of section 54B and provisions of sub section (4) of Section 54F are perimeteria. The judgments on which the ld. AR has placed reliance are rendered with reference to claim....