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TMI Blog2016 (12) TMI 492X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, 1961 of Rs. 14,91,850/-. 2) The learned Commissioner of Income Tax (Appeals) has considered the claim of the appellant u/s 54F while the appellant has claimed exemption u/s 54 of the Act. 3) The learned Commissioner of Income Tax (Appeals) erred in stating that the appellant has failed to submit the evidence for construction of new house within the prescribed time. 4) The appellant submits that all the conditions u/s 54 except the deposit of funds in a separate bank account was complied with and, therefore, a liberal view be taken in the matter. 5) Without prejudice and in alternate, the appellant submits that the learned Commissioner of Income Tax (Appeals) ought to have allowed exemption u/s 54 for amount invested in purchase of plot of land and construction of new house till due date of filing of the return of income." 3. The brief facts of the case are that the assessee is an individual deriving income from salary, capital gains and interest. The A.O. observed from AIR information that the assessee was having transaction in immovable property for Rs. 1,25,58,500/- on 16.10.2007 along with two other persons. The AO observed that the assessee has sold his share in a buil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of appellate proceedings before the ld. CIT(A), the assessee submitted the details of amount spent on the construction of the new residential house, which are as under:- (i) Purchase of plot of land Rs. 1,87,500/- (ii) Amount spent on construction of house Rs. 17,55,750/- Total Rs. 19,43,250/- The assessee submitted that in the intervening period, the sale proceeds of the old residential house were kept in a fixed deposit with the bank as the intention of the assessee was to utilize the sale proceeds in the construction of new residential premises . It was submitted that keeping the funds in the interim period in the fixed deposits with the bank instead of keeping in a separate capital gain account with bank as per capital gain scheme is just a technical omission . It was submitted that spirit of law to kept the money separately for construction was fully followed as the assessee kept the amount in bank in fixed deposit. In support, the assessee relied upon the decision of the Hon'ble Supreme Court in the case of Bajaj Tempo Ltd. v. CIT (1992) reported in 196 ITR 380(Bom.) , whereby the Hon'ble Bombay High Court held as under:- " The provision in a tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an Merchant v. Chief Commissioner of Income Tax, (2016) 73 taxmann.com 2 (Bombay) has held that exemption u/s 54F shall be allowed if the same is utilized for the purpose of construction of new house before the date of filing of return u/s 139 of the Act or the same has been deposited in the notified capital gain bank account before the date of filing of return u/s 139(1) of the Act, the exemption shall be allowed. The ld. Counsel submitted that the assessee is joint owner of the property , wherein the assessee share in property was sold on 15th October, 2007 for a consideration of Rs. 18,50,000/- wherein capital gain earned was Rs. 14,91,000/- which is not a disputed position. The due date of filing of return was 31st July, 2008 while the return of income was actually filed on 18th November, 2008. Thus, the ld. Counsel submitted that the assessee had not deposited the amount in the notified capital gain bank account before 31st July, 2008 i.e. due date prescribed u/s 139(1) of the Act , but the assessee had invested the amount for construction of the new residential house before filing of the return of income on 18th November, 2008 i.e. within time prescribed u/s 139 of the Act, o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 15th October, 2007 for a consideration of Rs. 18.50 lacs. The assessee had earned capital gain of Rs. 14.91 lacs on the sale of the said property which is not a disputed position between rival parties. The assessee has deposited the proceed of the sale of the afore-stated property in the fixed deposit with bank instead of depositing in the notified capital gain account maintained with the bank as per the capital gain scheme before the due date of filing of return u/s 139(1) of the Act ie. 31st July, 2008. The assessee did not also file return of income within the time prescribed u/s 139(1) of the Act i.e. 31st July, 2008 , rather the assessee filed return of income on 18th November, 2008 which was albeit filed within time stipulated u/s 139 of the Act. The assessee has acquired the land in Rajasthan for a consideration of Rs. 1.87 lacs and cost of construction of new residential house is claimed at Rs. 17,86,490/- till 02-05-2009 as per paper book/page 59-60 filed before the tribunal, which contains the general details of various expenses incurred for the construction of the new residential house . The claim of the assessee was rejected at threshold by the authorities below as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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