2025 (9) TMI 1495

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.... is 2010-11. 2. There is a delay of 45 days in filing this appeal. The assessee has filed a petition for condonation of delay and also a supporting affidavit. On perusal of the reason stated in the petition for condonation of delay, we are of the view that there is sufficient cause in belated filing of this appeal and no latches can be attributed to the assessee. Hence, we condone the delay in filing this appeal and dispose of the same on merits. 3. The solitary issue argued by the Ld.AR is whether the First Appellate Authority (FAA) is justified in confirming the AO's action in disallowing the claim of deduction u/s. 54 of the Act amounting to Rs. 10,27,558/-. 4. Brief facts of the case are as follows: The assessee, for the ass....

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..... In this case, the due date for furnishing the return of income was 31- 07-2010 and the assessee has not made any deposit under the capital gain deposit scheme before this date nor utilized the capital gain for purchase or construction of property before the due date for furnishing the return of income. Hence, the assessee has not satisfied the provisions of section 54(2) of the Income-tax Act, 1961 and therefore not eligible to claim exemption u/s 54 of the Income-tax Act, 1961. Accordingly the deduction claimed u/s. 54 of the Income-tax Act, 1961 is disallowed and added to the income returned." 5. Aggrieved by the assessment order, assessee filed appeal before the FAA. The FAA confirmed the disallowance made by the AO. Further, the FA....

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....assessee has utilised the capital gains for the purchase or construction of a residential house within the prescribed period, the benefit of Section 54 of the Act cannot be denied merely for not depositing the amount in the specified account. It was submitted that Section 54 of the Act is a beneficial provision intended to promote investment in housing. Therefore, it has to be interpreted liberally and purposively, not in a restrictive or technical manner. The Ld.AR submitted that the AO himself has not disputed the creation of the new asset. In such circumstances, sustaining disallowance solely on the basis of non-deposit under the Capital Gain Account Scheme is contrary to both the letter and spirit of the law. Therefore, he prayed that t....

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....ding of the Tribunal reads as follows: "8. We have heard rival submissions and perused the material on record. Before we adjudicate the issues raised, it is necessary to bring on record the relevant dates, consideration received, deemed sale value u/s. 50C of the Act, etc., as detailed below:- Date of sale of the Agricultural Land : 16.06.2015 Due date for filing the ITR u/s 139(1) : 31.07.2016 Due Date for filing the ITR u/s. 139(4) : 31.03.2018 Date of filing of the ITR (within 139(4) : 15.09.2017 Due date for completion of the house - (3 yrs from the date of Original Transfer) : 15.06.2018 Period of construction (within the time) : 11.09.2016 to 31.03.2018 House-warming ce....

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....tion. On the other hand, it has to verify as to whether the said sum was utilised by the petitioner within the time stipulated under Section 54(1) for the purpose of construction. If it is found that such utilisation was made within such time, the Revenue is bound to grant deduction. Therefore, this Court is of the view that the matter needs to go back to the first respondent for considering the issue as to whether the disputed amount, claimed by the assessee as deduction, has been utilised by the petitioner towards the additional construction within the time limit prescribing under Section 54(1) and thereafter, to pass fresh order accordingly in the light of the findings and observations rendered supra. Accordingly, the writ petition is al....