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TMI Blog2010 (10) TMI 543X X X X Extracts X X X X X X X X Extracts X X X X ..... on of Hon'ble Gauhati High Court in the case of CIT vs. Rajesh Kumar Jalan [2006 -TMI - 9858 - GAUHATI High Court], decided in favour of assessee. - ITA No. 1297/Mad/2009; ITA No. 1298/Mad/2009; - - - Dated:- 14-10-2010 - K.K. Gupta, George Mathan, JJ. K. Ravi for the Appellant Shaji P. Jacob far the Respondent ORDER K.K. Gupta, Accountant Member:- 1. ITA No. 1297/Mad/2009 is an appeal filed by the assessee, Shri P. Thirumoorthy and ITA No. 1298/Mad/2009 is an appeal filed by the assessee, Shri P. Mohan Gandhi, against the orders of learned CIT(A)-I, Coimbatore in appeal No. 285 of 2008-09 and No. 284 of 2008-09 respectively. Both the orders are dt. 16th June, 2009 and both for the asst. yr. 2006-07. 2. S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e correspondingly identical which may, therefore, be considered on hearing of the appeal of the assessee, namely, Shri Thirumoorthy. Hence we take up ITA No. 1297/Mad/2009 to adjudicate the issue which is common in both the appeals. 5. The brief facts of the issue in dispute are regarding the denial of claim of the assessee under s. 54F of the Act and the assessment by the AO invoking s. 50C of the Act. 6. The assessee filed his return of income for the impugned assessment year admitting income after claiming deduction under s. 54F of the Act to the tune of Rs. 44,94,918, which was scrutinized by the AO under the provisions of s. 143(3) of the Act. The AO in the course of assessment proceedings, denied the assessee's claim of deduct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kept only for three months and not able to satisfy himself whether the same amount had been invested in a house property so as to become entitled to claim deduction under s. 54F of the Act. However, the learned CIT(A) tried to analyse the issue by holding that funds were not directly invested in house property but the investments were made out of borrowed funds and not out of the sale proceeds. He has given a categorical finding that investment was made in term deposit but not in the Capital Gains Account Scheme as provided in law. 9. The learned counsel for the assessee further submitted that it is not the case of the Revenue that identical amount from the sale consideration is only to be invested as deposit in the Capital Gains Accou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e learned AO and learned CIT(A) misplaced to hold neither there was capital gains deposit scheme or term deposit which only resulted in obtaining the loan and therefore, failed to identify the very amount which entitled the assessee to claim deduction under s. 54F in its entirety to the extent that the assessee had complied with the provisions of s. 139(1) and 139(4) of the Act. He further submitted that sub-s. (4) of s. 54F clearly indicates that the amount of the consideration which is not appropriated by the assessee towards the purchase of new asset made within one year before the date on which the transfer of original asset took place, or which is not utilized by him for purchase of new asset before the date of furnishing the return of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d vacant land for Rs. 1,40,00,000 and the guideline value is prescribed as Rs. 325 per sq. ft. as obtained by the assessee and placed on paper book at page No. 31 indicating that the AO had not indicated the basis from where he adopted the value to enhance by Rs. 8,80,000 for the three owners as against Rs. 43,744. However, he pointed out that the learned CIT(A) has not adjudicated on the issue confining himself to the issue of claim of deduction under s. 54F of the Act. 11. The learned Departmental Representative supported the orders of the authorities below. He submitted that the facts clearly indicated that the assessee had not filed a return in order to comply with the provisions of s. 139(4) and more so, the learned CIT(A) identifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deduction under s. 54F as amounts as not chargeable on sale consideration which is to be taxed as capital gains in the hands of the assessee. We are of the considered opinion that the learned CIT(A) once refused to accept the claim that the Capital Gains Deposit Scheme made by the assessee amounting to Rs. 45,00,000 in May, 2006 ought not to have identified the amount as from some other sources which the AO has not brought on record. Therefore, having scrupulously followed only the bank statements, the learned CIT(A) misdirected himself to hold that the purchase of new residential building by the assessee was not that 1/3rd sale consideration of Rs. 45,00,000 received on 2nd Feb., 2006 from Capital Gains Deposit Scheme. Both the authorities ..... X X X X Extracts X X X X X X X X Extracts X X X X
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