2020 (8) TMI 312

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....oth the appeal and the cross-objection together through Virtual Court and disposing them by this common order. 2. The facts in brief are, Smt. S. Rekha Shetty, the assessee, an individual and a senior citizen, received her share from the sale of an immovable property, sold on 19-10-2015. In her return of income filed for assessment year 2016-17, she claimed deduction, inter alia, at Rs. 4,33,00,000/- under section 54, being the amount utilized towards a new house purchased on 26-8-2016. During the assessment proceedings, the A.O. found that the due date for filing the return under section 139(1) was on 5-8-2016, but, the assessee had deposited the amount in Capital Gains Accounts Scheme (CGAS) on 18-8-2016 only and finally utilized it in....

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....r the section should not be denied for the procedural lapses, if any, etc. The learned CIT (A), after examining the relevant facts, viz, (i) The due date to file the return u/s 139(1) : 05-8-2016 (ii) The due date to file the return u/s 139(4) : 31-3-2018 (iii) Date of filing the return : 20-6-2016 (iv) Date of purchase of new property(Registered) : 26-8-2016 (v) Date of depositing in CGAS : 18-8-2016 and after considering various case laws, viz (a) CIT v. Rajesh Kumar Jalan of Guwahati [2006] 286 ITR 274 (b) Fathima Bai v. ITO [I.T.A. No. 435 of 2004, date 17-10-2008] (c) CIT v. Jagtar Singh Chawla [2013] 33 taxmann.com 38(Punj. & Har.) (d) ITO v. Nilima Abhijit Tan....

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....f ITO v. Chimanlal Kalidas Vankawala 98 taxmann.com 433(Chennai), which are in favour of Revenue. Further, the Ld. D.R. submitted that learned CIT (A) erred in directing the A.O. to allow deduction under section 54 by holding that the assessee is eligible to claim deduction under section 54 as she has utilized the amount before the due date for filing the return of income under section 139(4), which is not in accordance with Section 54(2) of the Act, as per which the assessee should have deposited the disputed amount in Capital Gains Accounts Scheme (CGAS) on or before the due date for filing the return under section 139(1) i.e., on or before 5-8-2016. 4. Per contra, the Ld. A.R supported the order of the learned CIT(A) and relied on the....

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....ht for under section 54 is utilised either for purchasing or constructing the residential house in India within the time prescribed under section 54(1), the deduction is bound to be granted without reference to section 54(2), which compliance in my considered view, would come into operation only in the event of failure on the part of the assessee to comply with the requirement under section 54(1). Mere non-compliance of a procedural requirement under section 54(2) itself cannot stand in the way of the assessee in getting the benefit under section 54, if he is, otherwise, in a position to satisfy that the mandatory requirement under section 54(1) is fully complied with within the time limit prescribed therein. 15. At this juncture, ....

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.... above decision relied on by the Revenue is not helping the case of the respondents under the facts and circumstances of the present case. 17. The claim of the assessee for deduction of the disputed sum towards the additional construction cost was rejected only on the ground that the said sum was not deposited in the capital gains account. In view of my findings rendered supra, the Revenue is not justified in making such objection. On the other hand, it has to verify as to whether the said sum was utilised by the petitioner within the time stipulated under section 54(1) for the purpose of construction. If it is found that such utilisation was made within such time, the Revenue is bound to grant deduction." From the above, it is ....