TaxTMI 
TaxTMI 
2024 (5) TMI 294
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....t was deposited in Capital Gain Account before due date of filing return of income under section 139(1) of the Income Tax Act, 1961. 3. On the facts in circumstances of the case and in law the National Faceless Appeal centre ought to have allowed claim for exemption under section 54 by interpreting the incentive section liberally." 3. The only dispute raised by the assessee, in the present appeal, pertains to the denial of a claim of exemption u/s 54 of the Act. 4. The brief facts of the case pertaining to this issue, as emanating from the record, are: The assessee is an individual and for the year under consideration, filed his return of income on 01.10.2013 declaring a total income of Rs. 11,93,108/-. The return filed by the assessee was selected for scrutiny and statutory notices u/s 143(2) as well as section 142(1) of the Act were issued and served upon the assessee. The assessee was a co-owner, having 80% of shares, in an immovable property at Iraniwadi, Kandiwali (W), Mumbai. The said property was transferred by the assessee on 24.04.2012 by the registered deed of conveyance to M/s.Arihant Enterprises for a total consideration of Rs. 9 cr. As per the deed of conveyance of....
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....sessment year 2013-14. Accordingly, the AO held that the capital gains arising to the assessee from the aforesaid sale transaction are taxable only in the assessment year 2013-14. The AO further held that in order to claim the benefits of exemption u/s 54 of the Act, the assessee is required to purchase the new residential house property within a period of two years from the date of transfer of the original property. However, in the present case, even though the assessee deposited the entire sale consideration of Rs. 7.20 cr in the Capital Gains Scheme Account, the new residential house property was purchased only on 29.09.2014, i.e. after the lapse of two years from the sale of original property on 24.04.2012. Thus, the assessee is not entitled to claim the benefit u/s 54 of the Act. Accordingly, the AO treated the long-term capital gains amounting to Rs. 6.68,93,794/- accrued to the assessee by transferring the property at Iraniwadi, Kandiwali (W), Mumbai as taxable in the hand of the assessee for the assessment year 2013-14 and added the same to the total income of the assessee. 6. The learned CIT(A) vide impugned order, dismissed the appeal filed by the assessee and held that ....
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.... cr, out of which he received Rs. 1.20 cr before the execution of the aforesaid conveyance deed and the balance payment of Rs. 6 cr was received by the assessee on 26.09.2013. (c) Upon receipt of the balance payment, the assessee deposited the entire consideration of Rs. 7.20 cr in the Capital Gains Scheme Account on 26.09.2013. (d) On 29.09.2014, the assessee purchased the residential property for a total consideration of Rs. 7.03 cr. 10. In the aforesaid facts, the first issue that arises for our consideration pertains to the year in which the capital gains accrued to the assessee is taxable. As per the assessee, since the full consideration was received by him only on 26.09.2013, therefore, the capital gain arising from the sale transaction with M/s. Arihant Enterprises is taxable in the assessment year 2014-15. On the other hand, as per the Revenue since the assessee has signed the deed of conveyance on 24.04.2012 and even handed over the physical possession of the land and structure thereon in favour of M/s. Arihant Enterprises on the same date, the "transfer" u/s 2(47) of the Act has taken place in the assessment year 2013-14, and therefore, the capital gains arising to ....
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....rnishing such return. It is the plea of the assessee that he had deposited the entire sale consideration of Rs. 7.20 cr in the Capital Gains Scheme Account before filing his original return of income u/s 139(1) of the Act and therefore, is entitled to the claim the benefit of exemption as provided in the provisions of section 54 of the Act. On the other hand, as per the Revenue, the assessee deposited the consideration from the sale of the original asset in the Capital Gains Scheme Account on 26.09.2013 and further the new residential house was purchased on 29.09.2014, i.e. after a period of two years from the sale of the original asset, therefore, the assessee is not entitled to claim the benefit u/s 54 of the Act. 12. From the perusal of the original return of income filed by the assessee u/s 139(1) of the Act on 01.10.2013, forming part of the paper book from pages 6-30, we find that the assessee was liable to get his accounts audited u/s 44AB of the Act and in this regard also furnished audit report in Form no. 3CB dated 16.09.2013 for the financial year 2012-13. From the perusal of Explanation-2 to section 139(1) of the Act, we find that in the case of a person whose accounts....