TaxTMI 
TaxTMI 
2023 (1) TMI 357
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....High Court in the following cases i. CIT Vs VR Desai(Ker) 197 Taxman52. ii. Humayan Suleman Merchant Vs CCIT(Bom) 387 ITR 421. iii. OM Prakash Trivedi Vs Union of India(All) 287 ITR 11. 4. For these and other grounds that may be adduced at the time of hearing, it is prayed that the order of the learned CIT(A) may be set aside and that of the Assessing Officer restored." 3. The brief facts of the case are that, the assessee is an employee of State Government working as Section Officer in the High Court of Madras, had filed his return of income for the assessment year 2016-17 on 24.09.2016, declaring total income of Rs. 5,28,270/-. During the financial year relevant to assessment year 2016-17, the appellant along with his siblings sold a residential property on 23.03.2016 for a consideration of Rs. 2,84,00,000/- and received total consideration of Rs. 3,50,00,000/- in his bank account which includes his share of consideration and consideration of his siblings. The assessee has computed long term capital gains from sale of property and claimed exemption u/s. 54 of the Income-tax Act, 1961 (hereinafter referred to as "the Act") by paying a sum of ....
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....d 17.10.2005 for the Assessment Year 1996-97 the Hon'ble ITAT, Chennai on a similar issue has held as under: In the instant case the appellant has apparently satisfied the ultimate objective of the section by investing in a residential house by way of construction within the time allowed u/s.54. What the appellant has Jailed to do is to make an investment in the capital gains account scheme as required u/s.54(2) within the time allowed for furnishing the return u/s.139(1). This, the appellant contends is only a technical breach. The appellant apparently intended to invest in a residential house which is obvious from the fact that he acquired the land within a short time after the end of the previous year and before the time allowed for filing the return and commenced construction later on the said land which was completed within the time allowed u/s.54(1). These acts of the appellant clearly go to show that appellant always intended to invest in a residential house by way of construction. It therefore appears that the failure to invest in the capital gains account scheme is only a technical default which given the circumstances and the peculiar facts should not be exte....
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....The appellant stated that the. new property was given possession to him on January 2017 and the appellant has occupied the same on 29.04.2017. The arguments of the appellant deserve consideration. In respectful deference to the decision of jurisdictional ITAT in the case of Shri. Madhuvan Prasad, as cited supra, it was held that it therefore appears that the failure to invest in the capital gains account scheme is only a technical default which given the circumstances and the peculiar facts should not be extended to such an extent as to deny the exemption u/s.54 when the ultimate purpose of the provision is achieved. To hold that the exemption should be forfeited for a technical breach does not appear to be the correct proposition. In view of the above, all the grounds of appeal raised in this regard are treated as allowed." 7. The Ld. DR referring to the grounds of appeal filed by the Revenue submitted that, although number of decisions of various High Courts held that in order to claim deduction u/s. 54 of the Act, the assessee should strictly comply with conditions therein, but, the CIT(A) allowed relief to the assessee, even though the assessee himself admits violation of co....
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.... of deduction u/s. 54 of the Act, and we ourselves do not subscribe to the reasons given by the AO for simple reason that first of all, deduction provided u/s. 54 of the Act is a beneficial provision to encourage purchase of house by any assessee's, who sells his house and such provision should be construed literally to give benefit to the assessee. However, it does not mean that said benefit may be given to all assessee's who are not satisfying conditions prescribed therein u/s. 54 of the Act. In other words, in a case where assessee satisfies all conditions, but there is a technical breach in satisfying any one of the condition, then such technical breach needs to be viewed literally to give benefit, in light of the intent of legislature by way of section 54 of the Act. In this case, the assessee has satisfied all conditions, except there is a technical breach in one of the conditions of depositing unutilized capital gain amount in capital gains deposit account scheme on or before due date for filing return of income u/s. 139(1) of the Act, however, such deposits has been made on or before extended due date for filing return of income u/s. 139(4) of the Act. Admittedly, in the pr....