2018 (12) TMI 397 - AT - Income Tax

Disallowance u/s 54F - assessee not offered any capital gain for taxation - assessee has not indicated the provision under which the assessee was claiming deduction - assessee claimed deduction under Section 54B/54D/54EC/54F/54G/54GA - as per assessee before due date for filing of the return of income, according to the assessee the Department seized the amount by withdrawing the same from bank account, therefore, the money was with the Department thus was physically prevented from depositing the same in the Capital Gains Account - Held that - Admittedly, the property was sold for ₹ 9 Crores. The sale consideration disclosed in the sale deed was only ₹ 6 Crores. The assessee apparently received sale consideration to the extent of ₹ 3 Crores in cash. However, he deposited the same in S.B. Account in the names of self, his wife and children. ₹ 1.40 Crores was used for repayment of loan and ₹ 4.60 Crores was deposited in Capital Gains Account. The balance amount to the extent of ₹ 2,99,50,000/- was deposited in State Bank of India in the name of assessee, his wife and children and the same was taken over by the Department before the due date for filing of return of income - rightly the assessee was prevented from depositing the money in the Capital Gains Account. The total capital gain is ₹ 6,71,08,935/-. Hence, considering the deposit of ₹ 4.60 Crores in Capital Gains Account and the money taken by the Department to the extent of ₹ 2,99,50,000/-, this Tribunal is of the considered opinion that the CIT(Appeals) has rightly allowed the claim of the assessee under Section 54F . Failure of the assessee to make a specific claim under specific provision - Held that - No doubt, the assessee has not made any specific claim - return of income clearly shows that the assessee claimed deduction under Section 54B/54D/54EC/ 54F/54G/54GA - provisions of Section 54 and 54F are beneficial provisions. Merely because the assessee has not made any specific reference, that cannot be a reason to disallow the claim of the assessee. It is not a case of the Revenue that the assessee is not eligible for deduction under Section 54F. Therefore, mere non-reference about specific section under which the assessee is making claim cannot be a reason to disallow the claim of the assessee.- decided in favour of assessee

Summary

Issues: Disallowance under Section 54F of the Income-tax Act, 1961

Analysis:
1. The Revenue challenged the disallowance made by the Assessing Officer under Section 54F of the Income-tax Act, 1961 for the assessment year 2012-13.

2. The Departmental Representative argued that the assessee sold a property for ?9 Crores but registered the sale deed for only ?6 Crores, receiving the balance in cash. The assessee claimed exemption under Section 54F but did not construct a house within three years or deposit the amount in a Capital Gains Account. The CIT(Appeals) granted the deduction under Section 54F, which the Departmental Representative contested.

3. The counsel for the assessee explained that the assessee deposited ?1.40 Crores towards a loan account, ?4.60 Crores in a capital gain scheme, and ?2,99,50,000/- in a bank account, which was later seized by the Department before the due date for filing the return of income. The counsel argued that the assessee was physically prevented from depositing the money in the Capital Gains Account, leading to the allowance of the claim by the CIT(Appeals).

4. The Tribunal noted that the property was sold for ?9 Crores, with ?3 Crores received in cash. The assessee deposited ?4.60 Crores in a Capital Gains Account and the remaining amount in a bank account, which was seized by the Department before the due date for filing the return of income. Considering these facts, the Tribunal upheld the decision of the CIT(Appeals) to allow the claim under Section 54F.

5. The Revenue contended that the assessee did not make a specific claim under a particular provision. Although the assessee did not specify a provision, the return of income indicated a claim under various sections including 54F. The Tribunal held that the provisions of Section 54 and 54F are beneficial and the lack of specific reference does not warrant disallowance if the assessee is eligible. As the Revenue did not dispute the eligibility of the assessee for deduction under Section 54F, the Tribunal confirmed the lower authority's decision.

6. Consequently, the Tribunal dismissed the appeal filed by the Revenue, affirming the decision of the lower authority to allow the deduction under Section 54F of the Income-tax Act, 1961.

This detailed analysis of the judgment highlights the issues, arguments presented by both sides, and the Tribunal's reasoning leading to the final decision.