2019 (2) TMI 1318 - AT - Income Tax

Denial of deduction u/s 54F - belated deposits in the scheme is not in terms with the provisions of the Act - deposit in the capital gain account scheme has been made on 31.03.2014 i.e. on or before extended due date in terms of Section 139(4) of the Act instead of depositing it on or before the due date 31 07-2013 in terms of Section 139(1) - deposits made in the designated capital gain account scheme within the extended due date under s.139(4) - HELD THAT - In the present case, we are concerned with utilization of net consideration arising on sale of original assets towards deposit in capital gain account scheme. The time stipulated for such deposit is qua Section 139(1) of the Act. Hence, the suggestion on behalf of the assessee for eligibility of deposits subsequent to expiry of time limit under s.139(1) of the Act expressly provided in the Act is not aligned with and militates against the plain provisions of law codified in Section 54F(4) of the Act. The mandate of Section 54F(4) of the Act being crystal clear, it is quite difficult to depart therefrom. While holding so, we also refer to the decision of the Hon ble Supreme Court rendered in the case of Dilipkumar & Co. 2018 (7) TMI 1826 - SUPREME COURT OF INDIA requiring strict construction of beneficial provision. In the absence of any ambiguity in the exemption provision for eligibility, we do not see any reason to interfere with the order of the CIT(A) where the net consideration has not been utilized for the purposes of deposit in the notified bank account in terms of Section 54F(4) of the Act before due date specified under s.139(1) of the Act. We now turn to decisions referred to on behalf of the assessee. These decisions were rendered in the context of their own facts. In both cases, the consideration was invested for purchase of residential house within stipulated period. In the instant case, the issue is with reference to deposit in scheme. Coupled with this, the benefit of law on interpretation of beneficial provision by Hon ble Supreme Court in Dilipkumar & Co. (supra) was not available in those cases. - Decided against assessee.

Summary

Issues involved:
1. Denial of deduction under section 54F of the Income Tax Act.
2. Interpretation of the provisions of section 54F regarding the time limit for deposit in the capital gain account scheme.

Detailed analysis:
1. The appeal was filed by the Assessee against the order of the Commissioner of Income Tax (Appeals) denying deduction under section 54F of the Income Tax Act amounting to ?2,67,18,560. The Assessee sold urban agricultural land and claimed exemption under section 54F for the entire capital gains deposited in the capital gain account scheme. The Assessing Officer denied the exemption as the deposit was made after the due date under section 139(1) of the Act. The CIT(A) upheld the AO's decision, leading to the appeal before the Tribunal.

2. The main issue revolved around the interpretation of section 54F(4) of the Act concerning the time limit for deposit in the capital gain account scheme. The Assessee argued that the deposit within the extended due date under section 139(4) should suffice for eligibility. However, the AO held that the deposit must be made before the due date under section 139(1) for furnishing the return of income. The Tribunal analyzed the provisions of section 54F(4) and emphasized that the net consideration must be utilized for deposit before the due date of filing the return of income under section 139(1). The Tribunal referred to the strict construction of beneficial provisions and the Supreme Court's decision in Dilipkumar & Co. case, concluding that the Assessee's deposit after the due date specified under section 139(1) did not align with the provisions of section 54F(4).

3. The Tribunal dismissed the Assessee's appeal, stating that the clear mandate of section 54F(4) required the deposit to be made before the due date under section 139(1) and that the Assessee's argument for eligibility of deposits after that time limit was not in accordance with the law. The Tribunal distinguished the cases cited by the Assessee, where the consideration was invested for purchase of a residential house, from the present case, which dealt with deposit in the scheme. The decisions cited did not have the benefit of the interpretation of beneficial provisions by the Supreme Court, leading to the dismissal of the appeal.