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TMI Blog2014 (11) TMI 1077X X X X Extracts X X X X X X X X Extracts X X X X ..... t that the assessee had neither invested the capital gain arising out of the transfer of the long term capital asset for construction/purchase of new residential property, within the stipulate time nor deposited the unutilized amount in any bank account framed in accordance with the Capital Gain Account Scheme, 1988 on or before the due date for filing the return of income u/s. 139(1). (c) Since sec. 54(2) is very specific that deposit of unutilized capital gain in specified bank accounts should be made in any case 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) erred in deciding that the due date for furnishing the return of income contemplated in section 54(2) should also include sub-section (4) of sec. 139 of the I.T. Act inasmuch as sub-section (2) of sec. 54 mentions only section 139. 2. The brief facts of the case are that assessee sold a property for ₹ 23,00,000/- during the previous year relevant to the assessment year 2008-09 and claimed an amount of ₹ 16,63,166/- as exempt u/s. 54. The assessee had claimed this exemption in respect of a property p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore the due date for filing the return of income u/s. 139(1) of the I.T. Act and the balance consideration was paid by way of cheque dated 31/11/2008. The Ld. AR submitted that in view of the provisions of sec. 54(2) of the I.T. Act, in order to claim exemption u/s. 54, the unutilized portion of capital gain should be deposited in a capital gain deposit before the due date for filing return of income u/s. 139(1) of the I.T. Act. Further, according to the Ld. DR, such deposit being made in any case not later than the due date applicable in the case of the assessee for furnishing the return of income under sub-section (1) of sec. 139 of the I.T. Act. The Ld. DR relied on the order of the co-ordinate Bench of the Tribunal in the case of ITO vs. Smt. Rosamma Korah in I.T.A. No. 646 663/Coch/2013 dated 07/03/2014. 6. On the other hand, the Ld. AR submitted that the assessee purchased the property for sale consideration of ₹ 15,00,000/- on 10th June, 2008 and the assessee has paid a sum of ₹ 1,00,000/- as advance on 10th June, 2008 and the balance of ₹ 14,00,000/- was paid by cheque dated 31/11/2008. Being so, it should be deemed that the assessee has completed the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the net sale consideration which was not appropriated towards the purchase of the new asset within one year from the date on which the transfer of original asset took place or used for construction of a new asset before the date of filing of return of income u/s 139(1) shall be deposited before furnishing the return of income. The assessee has not utilized the portion of the amount before the due date for filing the return of income u/s 139(1). Therefore, according to the ld.DR, the assessee is not entitled for exemption of the entire amount of ₹ 33,33,805. Therefore, the CIT(A) has rightly confirmed the disallowance. 13. We have considered the rival submissions on either side and also perused the material available on record. Section 54(2) reads as follows: (2) The amount of the capital gain which is not appropriated by the assessee towards the purchase of the new asset made within one year before the date on which the transfer of the original asset took place, or which is not utilized by him for the purchase or construction of the new asset before the date of furnishing the return of income under 139, shall be deposited by him before furnishing such return ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng of return of income as per section 139(1) is subject to extended period provided u/s 139(4) of the Act. In view of section 54 of the Act it is obvious that if the assessee could not utilize the amount within one year either for purchase of a new asset or for construction of a new asset, the capital gain shall be deposited in the appropriate account before the due date for filing of return of income u/s 139(1). 16. Thus, the question arises for consideration is whether the due date mentioned in section 54(2) of the Act would be the due date for filing of return of income u/s 139(1) or the date by which the assessee could files the return u/s 139(4) of the Act. We find that the Apex Court in the case of Prakash Nath Khanna Ors vs CIT another (2004) 266 ITR 1 (SC) had an occasion to consider the words due date as mentioned in section 139(1) and 139(4) of the Act. The case before the Apex Court is with regard to a criminal prosecution u/s 276CC of the Act. While interpreting section 139(1), 139(2) and 139(4) of the Act, the Apex Court found that due date certainly mean due date as prescribed in sub section (1) of section 139. In fact, the Apex Court observed as follows a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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