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2020 (1) TMI 450 - AT - Income TaxDisallowance of deduction u/s. 54F in respect of capital gain - not admitting the claim of deduction made in respect of deposits made in the capital gains scheme account beyond the date specified in section 139(1) - HELD THAT - Hon'ble Apex Court in SMT. TARULATA SHYAM AND OTHERS 1977 (4) TMI 3 - SUPREME COURT has held that there is no scope for importing into the statue words which are not there whereas as per the facts of the present case different Hon'ble High Courts have time and again interpreted the provisions of section 54 of the Income Tax Act and in all those judgments it has been held that even if the sale consideration received on transfer of asset is deposited into the capital gain bank account before the due date of filing the return of income prescribed u/s.139(4) of the Act then the deduction u/s.54 of the Act cannot be denied. We are of the firm view that the judgment referred to by the ld.CIT(A) of Hon'ble Apex Court in the case of Smt. Tarulata Shyam is not applicable to the facts and circumstances of the case rather the judgment has cited above are clearly applicable to the facts and circumstances of the present case wherein it has been held that even if the sale consideration received on transfer of asset is deposited into the capital gain bank account before the extended date of filing the Return of Income u/s.139(4) of the Act, the deduction u/s.54F of the Act cannot be denied. Since from the facts of the present case the amounts has already been deposited by the assessee in the capital gain account with the bank before the due date for filing Return of Income u/s.139(4) of the Act, thus in this eventuality the deduction u/s.54F of the Act cannot be denied to the assessee and thus we allow this ground and set-aside the order of the ld.CIT(A) and direct the AO to give deduction to the assessee u/s.54F of the Act, accordingly effective ground of the assessee is allowed.
Issues Involved:
1. Disallowance of deduction claimed under Section 54F of the Income Tax Act. 2. Determination of the due date for depositing capital gains in the capital gains scheme account. Issue-wise Detailed Analysis: 1. Disallowance of Deduction Claimed Under Section 54F of the Income Tax Act: The primary issue raised by the assessee was the confirmation of disallowance of deduction claimed under Section 54F of the Income Tax Act in respect of capital gains amounting to ?1,17,03,937/-. The assessee argued that the deduction should not be denied as the deposits were made into the capital gains scheme account before the expiry of the time limit provided in Section 139(4) of the Act. The assessee relied on various judgments from High Courts which stated that the provisions of sub-section (4) of Section 139 should be treated as a proviso to sub-section (1) of Section 139. The judgments emphasized that the due date for filing the Return of Income extends to the time limit provided in Section 139(4), and hence, deposits made before this extended date should qualify for deduction under Section 54F. 2. Determination of the Due Date for Depositing Capital Gains in the Capital Gains Scheme Account: The Assessing Officer (AO) and the Commissioner of Income Tax (Appeals) [CIT(A)] held that the deposits made beyond the date specified in Section 139(1) but before the date specified in Section 139(4) were not eligible for deduction under Section 54F. The CIT(A) referenced Section 54F(4) which mandates that deposits should be made "not later than the due date applicable in the case of the assessee for furnishing the return of income under sub-section (1) of section 139." The CIT(A) concluded that allowing deposits beyond the date specified in Section 139(1) would make the statutory words redundant and that the preconditions for claiming the deduction were not met. Tribunal's Findings: The Tribunal evaluated the arguments and the material on record, including the judgments cited. It noted that the assessee had deposited the sale consideration into the capital gain account before the due date for filing the return of income under Section 139(4). The Tribunal observed that various High Courts had interpreted Section 54F to allow deductions if the sale consideration was deposited before the extended date for filing the return under Section 139(4). The Tribunal disagreed with the CIT(A)'s reliance on the Supreme Court judgment in the case of Smt. Tarulata Shyam, noting that the facts of that case were different and not applicable to the present case. The Tribunal concluded that the judgment of the CIT(A) was not aligned with the interpretations provided by various High Courts. It held that the deduction under Section 54F should be allowed if the sale consideration was deposited before the due date specified under Section 139(4). Consequently, the Tribunal set aside the order of the CIT(A) and directed the AO to allow the deduction claimed by the assessee. Outcome: The appeal filed by the assessee was allowed, and the Tribunal directed the AO to give the deduction under Section 54F. Similar Case (ITA No.3040/Ahd/2014): The Tribunal noted that the facts and circumstances in the case of another assessee (Shri Champaklal Ambalal Patel) were identical to the present case. Therefore, the same findings and directions were applied, and the appeal was similarly allowed. Final Pronouncement: Both appeals filed by the assessee were allowed, and the order was pronounced in the open court on 13-12-2019.
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