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2020 (8) TMI 409 - AT - Income TaxDeduction u/s 54F - Assessee claims to have made payments by the time allowable for filing the revised return of income under section 139 (4) - HELD THAT - As decided in the case of Smt. Vatsala Asthana 2019 (10) TMI 1025 - ITAT DELHI in support of the contention that for the purpose of utilisation of the amount for purchases/construction of residential house, the date of filing of return of income under section 139 (1) of the Act has to be construed with reference to the due date prescribed for filing return of income under section 139 (4) of the Act. Respectfully following the above decision rendered by a coordinate Bench of this Tribunal in the light of the decision in the case of K.Ramachandra Rao 2015 (4) TMI 620 - KARNATAKA HIGH COURT we are of the considered opinion that in case the assessee paid the amount equivalent to or more than the capital gains derived in the sale transaction of the house, the assessee is entitled to claim the relief under section 54F of the Act. We set aside the impugned order and direct the assessing officer to consider the amount utilised by the assessee for purchase of the house till the time allowable under section 139 (4) of the Act for filing the revised return, for deduction under section 54F of the Act. Appeal of the assessee is allowed in part.
Issues:
1. Disallowance of exemption claimed under section 54 of the Income Tax Act. 2. Failure to deposit unutilized capital gain amount in the capital gains account scheme. 3. Interpretation of the due date for filing the return of income under section 139(4) of the Act in relation to claiming deduction under section 54 of the Act. Issue 1: Disallowance of exemption claimed under section 54: The assessee filed an appeal against the order disallowing the exemption claimed under section 54 of the Income Tax Act. The assessing officer had added back the long term capital gains claimed as an exemption under section 54 due to a delay in the completion of the new property beyond the stipulated period. The CIT(A) upheld the addition, citing a Bombay High Court decision. The assessee contended that the issue was not raised during the assessment proceedings and cited conflicting decisions from different high courts. The Tribunal considered the facts and directed the assessing officer to allow the deduction under section 54 of the Act. Issue 2: Failure to deposit unutilized capital gain amount: The CIT(A) rejected the assessee's claim for deduction under section 54 due to the failure to deposit the unutilized capital gain amount in the capital gains account scheme before filing the return of income. The Tribunal noted the CIT(A)'s reliance on a Bombay High Court decision and the clear provisions of section 54F(4) of the Act. However, the Tribunal referred to a Karnataka High Court decision and directed the assessing officer to consider the amount utilized by the assessee for the purchase of the house till the due date for filing the revised return under section 139(4) for deduction under section 54F of the Act. Issue 3: Interpretation of due date for filing return of income under section 139(4): The Tribunal analyzed the due date for filing the return of income under section 139(4) in relation to claiming deduction under section 54 of the Act. Citing a Rajasthan High Court decision and a Karnataka High Court decision, the Tribunal held that payments made by the assessee for the purchase of the residential house till the due date of filing the return of income under section 139(4) should be considered for deduction under section 54F of the Act. Relying on a coordinate Bench decision, the Tribunal concluded that if the assessee paid an amount equivalent to or more than the capital gains derived from the sale transaction, they are entitled to claim relief under section 54F of the Act. In conclusion, the Tribunal allowed the assessee's appeal in part, setting aside the CIT(A)'s decision and directing the assessing officer to consider the amount utilized for the purchase of the house till the allowable time for filing the revised return for deduction under section 54F of the Act.
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