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TaxTMI 
TaxTMI 
TaxTMI 
2018 (5) TMI 2119
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....Revenue reads as under: I. On the facts and circumstances of the case and in law Ld. CIT(A) erred in ignoring the provision of section 54(2) clearly spelt that to avail the deduction u/s 54 the assessee is required to deposit the capital gain to any notified capital gain account scheme on or before the due date of filing return of income u/s 139(1). In the instant case, the section 139(4) allows the assessee to file belated return but to avail the deduction u/s 54 the assessee is required to deposit the unutilized capital gain to eligible capital gain account scheme or purchase new asset within the due date of filing the return of income and the assessee has failed to do that without any reason. II. The appellant prays that the order of....
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.... section 54(2) clearly states that the deposit in CGAS must be made not later than the due date applicable in the case of the assessee for furnishing the return of income u/s 139(1) of the Act. The AO also found the explanation of the assessee that "he was not able to deposit the proceeds in Capital Gains Deposit Scheme due to his personal problems and his professional commitments as a pilot" as not at all acceptable. In view of the above reasons, the AO disallowed the claim of Rs. 1,46,20,735/- made by the assessee u/s 54 of the Act. 4. Aggrieved by the order of the AO, the assessee filed an appeal before the Ld. CIT(A). The Ld. CIT(A) took note of the fact that the assessee had filed his return of income on 26.03.2014 which was a belat....
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.... instead of section 139(1). As the assessee in the instant case had invested in new property before filing of return of income on 26.03.2014 u/s 139(4), the Ld. CIT(A) directed the AO to allow the deduction u/s 54 of the Act. 5. Before us, the Ld. DR submits that the deposit CGAS must be made not later than the due date applicable in the case of the assessee for furnishing the return of income u/s 139(1) of the Act. Also it is stated that the plea of the assessee that CGAS is a procedural compliance and the assessee was not able to spare time for opening the account and delay in withdrawal of the amounts, are not acceptable, as the Act is very clear with the wording 'shall be deposited' which implies that the deposit in CGAS is mandatory. ....
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.... the Income-tax Act for exemption of the capital gain from being charged to income-tax on the sale of property used for residence up to March 30, 1998, inasmuch as the return of income-tax for the assessment year 1997-98 could be furnished before the expiry of one year from the end of the relevant assessment year or before the completion of the assessment whichever is earlier under sub-section (4) of section 139 of the Income-tax Act, 1961." 7.1 In the case of Kishore H. Galaiya (supra), the assessee sold his share of residential flat on 07.03.2006 and earned a Long Term Capital Gain of Rs. 9.98 lac. He purchased a new flat jointly with his wife for a consideration of Rs. 35 lac. A total payment of Rs. 13.50 lac was made by the assessee ti....
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....der the provisions of section 139(1) of the Act. Accordingly, the Hon'ble High Court held that sub-section (4) to section 139 had to be read along with sub-section (1) and the due date for furnishing the return of income u/s 139(1) is subject to the extended period provided u/s 139(4) and hence the extended period u/s 139(4) has to be considered for the purposes of utilization of the capital gain amount. In that case, the assessee had sold the old flat on 13.1.2006 and the new residential house was purchased by the assessee on 2.1.2007 which was within the extended time limit till 31.3.2007 u/s 139(4) for assessment year 2006-07 and therefore the claim was allowed even though the amount had not been deposited in the capital gain account....