TaxTMI 
TaxTMI 
2023 (1) TMI 753
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.... capital gains arising from the sale of residential house was invested in purchase of new house vide agreement dated 20.03.12. The entire purchase consideration was paid by 31.03.2012 and possession was obtained on 23.04.2012. However, the assessee did not deposit the amount of capital gains in the capital gains account scheme before the due date of filling return of income u/s 139(1) which was 31.07.2011. 3. The Assessing Officer held that; i) The Assessee did not show the capital gains in his computation of income along with return of income. These facts emerged during the scrutiny proceedings. Therefore, as held by the Supreme Court in Goetz (I) ltd. 284 ITR 323 (SC), no new claim can be made before the Assessing Officer except through a revised return and not through mere filling of revised computation as in this case. ii) There is failure on the part of the Assessee to deposit the capital gains in the capital gains account scheme before due date of furnishing return of income u/s 139(1). In view of the same, AO denied the exemption u/s 54 to the assessee. 4. The Ld. CIT (A) upheld the contention of the Assessing Officer holding that: i) Claim u/s 54 is not automatic u....
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.... 22.11.2020 to 01.12.2010. Since then he was suffering from permanent physical disability. On account of all these circumstances, the appellant could not comply with the provisions of sec. 54(2). 6. On the other hand, Ld. DR strongly relied the order of the Assessing Officer and CIT (A) and submitted that it is a statutory requirement that Assessee should deposit the proceeds in the special capital gains account before the due date of filling of the return of income u/s. 139(1) which Assessee has failed to do so and Assessee has to satisfy the condition prescribed u/s. 54(2). 7. After hearing, both the parties and on perusal of the impugned order, it is seen that, Assessee had on capital gain from the sale of flat the relevant chronology of events is as under: Event Date Date of agreement of sale of property giving rise to capital gains 04.06.2010 Due Date of filing return of income under sec. 139(1) 31.07.2011 Date of purchase agreement of new Flat in respect of which the appellant claimed exemption u/s 54 20.03.2012 Possession of flat 23.04.2012 Actual Date of filing return of income 31.08.2012 Due Date of filing return of income u/s 139(4) 31.03.2013 7. Thus, th....
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....er is earlier, Provided that where the return relates to a previous year relevant to the assessment year commencing on the 1st day of April 1988, or any earlier assessment year, the reference to one year aforesaid shall be construed as a reference to two years from the end of the relevant assessment year." 11. A reading of the aforesaid Sub-Section would show that if a person has not furnished the return of the previous year within the time allowed under Sub-Section (1) Le before 31st day of July of the Assessment Year, the assessee can file return before the expiry of one year from the end of the relevant Assessment Year. 12. The sale of the asset having been taken place on 13.1.2006, falling in the previous year 2006-2007, the return could be filed before the end of relevant assessment year 2007-2008 i.e. 31.3.2007 Thus, Sub-Section (4) of Section 139 provides extended period of limitation as an exception to Sub-Section (1) of Section 139 of the Act. Sub-Section (4) is in relation to the time allowed to an assessee under Sub-Section (1) to file return. Therefore, such provision is not an independent provision, but relates to time contemplated under Sub-Section (1) of Section ....
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....om the date of transfer. Thus, this compliance is to be treated and construed as substantial compliance to consider the claim of the benefit under section 54. Thus, it is clear that meeting out the expenses towards the cost of construction of the house within a period of three years entitles an assessee for claiming deduction under section 54. * No doubt, section 54 (2) contemplates that if the amount of the capital gain is not appropriated by the assessee towards purchase of new assets within one year before the date on which the transfer of original asset took place or which is not utilised by him for the purchase of new asset before the date of furnishing the return of income under section 139, he has to deposit the said sum in an account in any such bank and utilised in accordance with any scheme which the Central Government may, by notification frame in that behalf. In other words, if the assessee has not utilised the amount of the capital gain either in full or part, such unutilised amount should be deposited in a capital gain account to get the benefit of deduction in the succeeding assessment years. * In instant case, the only objection raised by the revenue is that the....