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TMI Blog1998 (8) TMI 610X X X X Extracts X X X X X X X X Extracts X X X X ..... 377; 4,957 and the long-term capital gain shown was claimed as exempt under section 54F of the IT Act, 1961 on the ground that the assessee has purchased old house and constructing the house by investing the above amount of capital gain which is deposited in bank and pass book is enclosed. In account No. 9405 with the Bank of Baroda, Itwari, Nagpur, on 13-5-1995, the Assessing Officer found that a sum of ₹ 1,42,425 was deposited. Since this deposit was not in terms of section 54F(4) of the IT Act, ₹ 39,399 being the difference between the amount of ₹ 1,81,824 and the deposited amount was treated as charging to tax and the Assessing Officer made prima facie ad justments under section 143(1)(a) of the Act. 4. The assessee carried the matter before the first Appellate Authority. The first objection of the assessee was that it was beyond the scope of prima facie adjustment on the ground that the assessee has clearly mentioned that she has purchased old house and was constructing a new house by investing the amount of long-term capital gains which was deposited in her bank account. The first Appellate Authority noticed that this was an ordinary saving bank account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 54F(4) were violated. In terms of footnote given by the appellant along with the computa tion of capital gains, it should be accepted that ₹ 60,575 (2,03,000-1,42,425) has been utilised by the appellant for construction of old house and construction thereon in accordance with section 54F. Since copy of the bank pass book enclosed with the return of income clearly shows that a sum of ₹ 1,42,425 has not been deposited in accordance with the Capital Gains Account Scheme, 1988, the Assessing Officer should have made prima facie adjustment in respect of ₹ 1,27,568 (1,81,824 1,42,425/2,03,000). The above conclusion drawn is based on the information supplied by the appellant along with the return of income. Hence any other facts here not material. The Assessing Officer should tax ₹ 1,27,568 as capital gain. On the basis of the above, the CIT(A) held that the amount of ₹ 1,27,568 should have been taxed as capital gain. It is against this order, the assessee is in appeal before the Tribunal. 5. The learned counsel for the assessee firstly objected to the observations of the CIT(A) in para 7 which reads as under : Sale proceeds out of ₹ 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsel confined his arguments to the following : (a) It cannot be said that the amount was not utilised before the date of furnishing of return; (b) appropriated does not mean that the same amount is to be utilised as it can never be in a case before the date of transfer; (c) in any case, the assessee having purchased the new asset and appropriated the entire consideration received on transfer, the cost under section 54F(4) shall be ₹ 3,82,000; (d) there cannot be any prima facie adjustment as the assessee was not bound to give any proof of purchase of any asset; (e) in any case, there cannot be prima facie adjustment on a debatable point; and lastly, (f) no adjustment can be made as per the Board s circular, summed up the learned counsel. 6. Opposing the above contentions of the learned counsel for the assessee, the learned Departmental Representative submitted that it was within the permissible scope of prima facie adjustment as from the pass book of the assessee, it was reflected that the assessee has shown a different amount than the sale proceeds of the share as deposit and she further submitted that the learned CIT(A) was justified in enha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... posit and not in a case where the same has been utilised for acquisition of new asset. However, in the instant case, the assessee has attached a copy of the bank account as a proof of depositing the sale proceeds in her account. The amount of ₹ 1,42,425, according to the asses see, was a portion of the sale proceeds of the capital asset. There is no evidence that the assessee has utilised the very same amount for acquisition of the new asset. Section 54F stipulates that the assessee should appropriate net consideration towards the purchase of a new asset made within one year before the date on which the transfer of original asset took place. 9. Chamber s Twentieth Century Dictionary, Six Impression 1971, gives the meaning of the word appropriate as follows : to make to be the private property of any one; to make to one self as one s own; to filch; to set apart for a purchase; assign; to suit (with to) adj. set apart for a purpose; peculiar; suit able. It means that the sale proceeds of the old asset should be appro priated, set apart for a purpose and the purpose should be the purchase of a new asset purchased before one year of the sale of the old asset. 10 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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