TaxTMI 
TaxTMI 
2022 (3) TMI 152
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....ef facts of the case is that the assessee is an individual and Non-Resident Indian [for short NRI]. For the Asst.Year 2015-16, the assessee has filed his return of income on 31.8.2015 and the same was revised by filing a Revised Return on 05.11.2015. Assessee has received a sum of Rs. 2.40 crores against sale of property as per sale deed dated 2.12.2014 from Krupesh Patel and others. The payments were received in the following manner: Amount (Rs) Ch.no. Date of credit in Bank 30,00,000 422148 07/07/2015 30,00,000 422149 07/07/2015 30,00,000 422150 07/07/2015 30,00,000 422151 07/07/2015 30,00,000 422152 12/10/2015 30,00,000 422153 12/10/2015 30,00,000 422154 12/10/2015 30,00,000 422155 12/10/2015 4. The assessee re-invested the sale consideration and purchased a residential flat for a sum of Rs. 2,54,53,193/- which was an ongoing project and possession of the flat vide NOC letter dated 2.8.2016 was given to the assessee. The re-investment made by the assessee by way of instalments as follows: Amount Received Rs. Paid Rs. Remark Upto 31/08/15 (Ext. 02/09/15) 12000000 1,83,6....
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.... received entire sale proceeds and still appellant has not deposited funds in a separate capital gain scheme as envisaged in section 54/54F of the Act and non-deposit in such separate account clearly mean that appellant has failed to comply with specific provisions of the Act hence AO was correct in making disallowance u/s 54 of the Act." 8. Further, Ld.CIT(A) relied upon judgment of the Bombay High Court in the case of Humayun Suleman Merchant Vs. CIT, 73 taxan.com 2 and few other judgments, and ultimately held that the assessee on the date of filing of revised return, entire sale consideration of the sale of the property was received by him but not deposited such consideration in separate capital gains account. Therefore the AO was correct in making disallowance under section 54 of the Act proportionately for Rs. 48,00,572/- thereby dismissed the appeal filed by the assessee. 9. Aggrieved with this appellate order, the assessee is in appeal before the Tribunal. 10. The Ld AR submitted that the lower authorities are legally not correct in restricting the relief to Rs. 48,00,572/-. The CIT[A] erred in relying on the judgement of the Bombay High Court in the case of Humayun....
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....dvance amount of Rs. 15,00,000/= paid 04-11-96 RoI filed but balance amount not deposited in Capital Gains Account. Thus the above case is factually not applicable to the present case in hand on the following reasonings - [a] Part [50%] Sale Consideration of Rs. 1,20,00,000/= received by the assessee on 07-07-2015, however invested Rs. 1,83,60,084/= on the purchase of new flat, which is not disputed by the assessee. Original RoI filed on 31-08-2015 is accepted and relief is given to the assessee. [b] Balance [50%] sale consideration of Rs. 1,20,00,000/= received by the assessee on 12-10-2015 only, reinvested substantial amount in the new flat and filed a revised RoI on 05-11-2015 claiming entire consideration for deduction u/s.54/54F. [c] Unlike the Humayun Suleman Merchant case [cited supra] full consideration is not available with the assessee for reinvestment or to be deposited in Capital Gains account, before filing the RoI. 12.2. Now let us look in to the Karnataka High Court judgement in the case of CIT -Vs- K. Ramachandra Rao held as follows: "... ... Sub-section (4) is attracted only to a case where the sale consideration is N....
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....ale consideration in construction of a residential house within three years from date of transfer, he could not be denied exemption under section 54F on ground that he did not deposit said amount in capital gains account scheme before due date prescribed under section 139(1). Sub-section (4) of section 54 is attracted only in a case where sale consideration is not utilised either for purchase of/construction of a residential house. 12.3. Further research on the subject, we find a very useful judgement rendered by the Hon'ble Madras High Court in the case of Ms. Moturi Lakshmi -Vs- Income Tax Officer reported in [2020] 119 taxmann.com 488 (Madras) wherein it was held that where advance was paid by assessee to purchase residential flat prior to sale of capital asset, such advance was to be considered as part of purchase for purpose of section 54 of the Act. The Hon'ble High Court also referred its two more judgements on similar issues as follows: ".... 6. The substantial question of law framed for consideration in this appeal has been answered in several decisions and the issue is no longer res integra. To answer the substantial question of law, we may have to refer to th....