TaxTMI 
TaxTMI 
TaxTMI 
2020 (8) TMI 312
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....ugh 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 purchasing the new house on 26-8-2016. Since the amou....
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....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 Tannu [2019] 106 taxmann.com 256 (Mum. - Trib.) and the assessee's submissions etc. held, inter alia, that ....
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..... 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 decision of the Hon'ble Jurisdictional High Court in the case of Venkata Dilip Kumar v. CIT 111 taxmann.com 18....
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.... 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, the Division Bench decision of the Karnataka High Court made in I. T. A. No. 47 of 2014 in the case of CIT v. K. Ramachandra Rao is releva....
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....im 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 clear that for seeking benefit of deduction under section 54 of the Act, the assessee should have substantially complied with section 54(1). In this case, the as....