AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2018 (1) TMI 1572
X X X X Extracts X X X X
X X X X Extracts X X X X
.... No.180/2016-17/A.Y.2014- 15/CIT(A)-4 for the assessment year 2014-15 passed U/s.250(6) r.w.s. 143(3) of the Act. 2. The Revenue has raised five grounds in its appeal however the crux of the issue is that the Ld.CIT(A) has erred in deleting the disallowance made by the Ld.AO to the tune of Rs. 1,72,35,484/- with respect to the disallowance of deduction U/s.54(2) of the Act for not depositing the residue sale proceeds in capital gain scheme account within the stipulated period U/s.139(1) of the Act. 3. The brief facts of the case are that the assessee is an individual filed his return of income for the assessment year 2014- 15 electronically on 05.02.2016 declaring total income of Rs. 65,66,850/-. Initially the return was processed U/s....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ithdrew the benefit of Section 54 of the Act to the assessee and added to the Long Term Capital Gain the amount of Rs. 1,72,35,494/-. 5. On appeal, the Ld.CIT(A) citing various decisions of higher judiciary allowed the appeal of the assessee in his favour by observing as under:- "10.1 have gone through the facts of the case and have also considered the rival submissions. In view of that, the case is discussed as under. 11. The only question that needs to be answered in the present case of the appellant is that whether the unutilised amount of capital gains at Rs. 1,72,35,494/- which was not appropriated towards construction of new house property before the due date for filing of the return of income as envisaged u/s 139....
X X X X Extracts X X X X
X X X X Extracts X X X X
....residential house within three years from the date of sale of the original asset, as envisaged u/s 54(1), the appellant was eligible for deduction u/s 54 even if the unappropriated capital gains was not deposited in the capital gains account scheme before the date of filing of return of income u/s 139(1) of the Act. In this regard, the appellant has furnished copy of the Agreement for Construction of Residential Building, the approved map of the building and the relevant bank account statements to reflect the amount withdrawn for construction of the residential house. I have perused the same and it is found from the documents that the construction of the residential house was carried out by the appellant and got completed within the stipula....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nstructing a residential house within the period stipulated in section 54F (1), if the assessee wants the benefit of section 54 F, then he should deposit the said capital gain in an account which is duly notified by the Central Government. In other words, if he wants the claim of exemption from payment of income tax by retaining the cash, then the said amount is to be invested in the said account. If the intention is not to retain cash but to invest in construction or any purchase of the property and if such investment is made within the period stipulated therein; then section 54 F (4) is not at all attracted and, therefore, the contention that the assessee has not deposited the amount in the bank account as stipulated and, therefore, he is....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Ld. AR relied on the decision of the Ld.CIT(A). The Ld.AR further clarified that though the amount of Rs. 1,72,35,494/- was not transferred to the scheme account it was held in nationalized bank until it was utilized for construction of the building and therefore it was only a technical breach. The Ld.DR could not controvert to the submission of the Ld.AR that the amount remained as deposit in the nationalized bank until it was utilized for the construction of the residential house. 7. We have heard the rival submissions and carefully perused the material on record. At the outset we find this issue squarely covered by the decision of the Chennai Bench of the Tribunal in ITA No.1167/Mds/2016 vide order dated 15.09.2016 wherein on the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ad made is that the assessee though had placed the entire sale proceeds in the nationalized bank he has not transferred the same in the "Capital gain scheme account". Considering these facts of the case and the decisions of the Tribunal and the Hon'ble Apex Court cited above, we are of the considered view that for this small technical lapse of the assessee, the benefit of section 54 should not be denied. Section 54 of the Act is a beneficial provision and a beneficial interpretation has to be made as far as possible for giving benefit to the assessee. The assessee had proceeded to comply with the provisions of section 54 of the Act but has only made a small technical breach which we are of the considered view should not disentitle the asses....