2013 (3) TMI 657 - AT - Income Tax

Summary

Issues Involved:
1. Deletion of addition made by the Assessing Officer on account of disallowance of deduction claimed u/s 54B.
2. Allowing the deduction u/s 54F which was not claimed before the Assessing Officer.
3. Justification of allowing deduction u/s 54F despite non-satisfaction of stipulated conditions.

Summary:

Issue 1: Deletion of Addition u/s 54B
The revenue challenged the deletion of Rs. 53,83,335/- made by the Assessing Officer on account of disallowance of deduction claimed u/s 54B. The assessee initially claimed deduction u/s 54B for investment in agricultural land, which was rejected by the AO. The CIT(A) accepted the assessee's contention that the deduction should have been claimed u/s 54F instead, as no agricultural land was involved.

Issue 2: Allowing Deduction u/s 54F
The CIT(A) allowed the deduction u/s 54F, which was not claimed before the AO. The CIT(A) referred to the decision of the Hon'ble Supreme Court in Goetze (India) Ltd. Vs. CIT 284 ITR 323, which allows the Tribunal to entertain such claims. The CIT(A) examined the scheme of u/s 54F and found that the assessee fulfilled the conditions for claiming the deduction.

Issue 3: Justification of Deduction u/s 54F
The CIT(A) analyzed the conditions u/s 54F, noting that the assessee:
- Is an individual.
- Transferred a long-term capital asset (N.A. plot).
- Purchased a residential house within three years of the transfer.
- Invested Rs. 55,91,740/- in the new residential house before 31-03-2010, within the extended time limit u/s 139(4).

The CIT(A) cited several decisions supporting the view that the time limit for filing the return u/s 139(4) should be considered for depositing the unutilized sale proceeds. The CIT(A) concluded that the assessee met all conditions for deduction u/s 54F and allowed the claim, confirming the addition to the extent of Rs. 3,93,044/- and deleting Rs. 53,83,335/-.

Final Decision:
The Tribunal upheld the CIT(A)'s decision, confirming that the assessee fulfilled the conditions for deduction u/s 54F and dismissing the revenue's appeal. The judgment was pronounced in open court on 18.03.2013.