2025 (2) TMI 1472

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....s that the Ld.CIT(A) erred in confirming the disallowance made by the AO to the tune of Rs. 1,58,37,000/- with respect to the disallowance of deduction u/s. 54(2) of the Income-tax Act, 1961 (hereinafter in short "the Act") for not depositing the residue sale proceeds in capital gain scheme account within the stipulated period u/s. 139(1) of the Act. 3. The brief facts are that the assessee filed her return of income (RoI) on 07.05.2015 for AY 2014-15 declaring income of Rs. 3,62,240/-. Later, the return (RoI) was selected for scrutiny u/s. 143(3) of the Act, which led to pass of an assessment order dated 30.12.2016 by which the AO disallowed Rs. 1,58,37,000/-, since, the assessee didn't deposit the said sum in capital gain account s....

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....4,80,000/- and from such a transaction, she claimed LTCG of Rs. 1,56,91,000/-. Out of the sale-consideration received, the assessee deposited under the capital gain account scheme i.e. Rs. 1.08 crores [i.e. Rs. 90 lakhs on 11.08.2014 and Rs. 18.50 lakhs on 14.08.2014]. The assessee is also seen to have invested the said sum for construction of new residential house at Neelankarai which was built for a total cost of Rs. 2,00,75,384/-. However, the AO has denied the exemption claimed u/s. 54 of the Act on the ground that assessee didn't utilize/invest the capital gain for purchase of new residential property at Neelankarai within the due date u/s. 139(1) of the Act i.e. on or before 31.07.2014; and had belatedly deposited it only in 11th&....

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....e had fulfilled all the conditions prescribed under section 54 of the Act barring the deposit of the sale proceeds in the "capital gain scheme account" as prescribed under section 54(2) of the Act. In that decision reliance was also placed in the decision of Hon'ble Apex Court in the case of Motilal Padampat Sugarmill Co.Ltd. Vs. State of Uttar Pradesh & Ors wherein it was held that 'thus there is no presumption that every person knows the law. It is often said that everyone is presumed to know the law, but that is not a correct statement there is no such Maxim known to the law. In the given case before us also, it is not disputed that the assessee had not fulfilled the conditions prescribed under section 54 of the Act barring the d....