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TMI Blog2005 (9) TMI 508X X X X Extracts X X X X X X X X Extracts X X X X ..... F even though the capital gains was used for investment in house property as per requirement of the section. That the rejection of the claim was on technical ground even though there is no dispute about the facts that the capital gain was used for investment in property in accordance with spirit and object of the section." 3. In brief, the facts are that the assessee individual is a non-resident who filed his return of income for the assessment year under consideration declaring nil income. The return was due to be filed for the assessment year under consideration on or by 30th June, 1997 but was filed on 13-11-1998. The Assessing Officer noticed that the assessee had declared capital gain on sale of shares during the year under considera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l property was 1-12-1997, i.e., on a date falling after the due date applicable in the case of assessee for furnishing return of income in terms of sub-section (1) of section 139, i.e., 30-6-1997. Accordingly, the assessee was required in terms of section 54F(4) to deposit the net consideration in a designated account in such bank as specified in Capital Gains Accounts Scheme, 1988 before 30-6-1997. Instead, the Assessing Officer noticed that the assessee deposited the sale proceeds in a bank account maintained with State Bank of India on 3rd August, 1996. Since the Assessing Officer found that the net consideration was neither appropriated towards the purchase of residential property before the due date and nor was it deposited in the acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nial of exemption has been done on a mere technical lapse. The ld. counsel has justified the exemption on the ground that the sale proceeds of shares were utilized only for the purpose of investment in the new house property and not for any other purpose. In support, our reference was invited to a copy of bank account wherein the sale proceeds have been credited and the only withdrawals were for the purpose of acquisition of the said property. According to the ld. counsel, although the sale proceeds were not deposited in a bank account as specified in terms of the Capital Gains Accounts Scheme, 1988, yet they were kept in a separate bank account which were utilized only for the purpose of investment in the house property. The only other cre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in the purchase of a new residential property and for such re-investment, he claimed exemption in terms of section 54F of the Act. However, the appropriation of net consideration in the house property was not made before the due date of filing of return as mentioned under section 139(1) of the Act. As a result thereof, sub-section (4) of section 54 provides that the net consideration which is not so appropriated towards the purchase of new asset, before the specified date of hearing shall be deposited in bank account which is specified in terms of the Capital Gains Accounts Scheme, 1988. The same has not been done in the present case and, therefore, it disentitles the assessee from exemption. The plea of the assessee that it is a mere tec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case, admittedly, the funds had been utilized for purchase of property on 1-12-1997 and in the interregnum, the same were not kept deposited in a specified bank account. In the instant case, there is no material to conclude that in the interregnum, the funds were utilized for the purchase or for construction of the new property. Therefore, the assessee has not fulfilled the conditions of section 54F(4). We have also perused the decisions of the Calcutta High Court in the case of Smt. Bharati C. Kothari (supra) and of the Delhi High Court in the case of R.L. Sood (supra ), which are distinguishable on facts. Similarly, the plea of the assessee that the provisions be construed liberally so as to further its objective is also not tenable havi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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