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TMI Blog2017 (6) TMI 5X X X X Extracts X X X X X X X X Extracts X X X X ..... gain, the assessee has claimed deduction of Rs. 1,52,14,375/- u/s 54 of the Act on account of investment made in new residential house. From the various details furnished by the assessee, the A.O observed that the payment of Rs. 81,72,207/- was made for acquiring new house property before filing of return. He, therefore, asked the assessee to explain as to whether the balance capital gain was deposited in the capital gain account or not? 3. The assessee replied that he has sold the residential property on 21.08.2012 and earned net capital gain of Rs. 1,45,80,180/-. To avail benefit of section 54F of the Act, he entered into an agreement to purchase a flat in Lotus Boullward Project of Cloud and Projects Pvt Ltd on 27.09.2012 for a consideration of Rs. 1,52,14,375/-. Payments for the same were made from time to time as per the demand from the builder within a period of two years after the date on which the transfer took place as stipulated u/s 54F of the Act. The assessee however, admitted that he could not utilize the whole of the capital gain before filing of the return as the demands from the builder were staggered nor could he deposit the same amount in the Capital Gain Scheme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and circumstances of the case, the ld. CIT(A) has erred in law and on facts in confirming the action of the A.O in not allowing the deduction u/s 54 amounting to Rs. 64,07,973/- and that too without observing the principles of natural justice. 2. That in any case and in any view of the matter, section of ld. CIT(A) confirming the action of the A.O in not allowing the deduction u/s 54 amounting to Rs. 64,07,973/- is bad in law and against the facts and circumstances of the case. 3. That having regard to the facts and circumstances of the case, the ld. CIT(A) has erred in law and on facts in not reversing the action of the A.O in charging of interest u/s 234A, 234B, 234C and 234D of the Act." 8. The ld. counsel for the assessee strongly objected to the order of the A.O which has been upheld by the ld. CIT(A). He submitted that the assessee has filed his return of income on 26.03.2014 declaring total income of Rs. 14,57,120/- wherein capital gain of Rs. 1,45,80,180/- was declared on account of sale of house property on 21.8.2012. Referring page 2 of the assessment order, he drew the attention of the Bench to the payments made towards purchase of the flat amounting to Rs. 1,35,1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntial property with a builder within two years after purchase of property, the assessee is entitled to claim exemption u/s 54 of the Act even when legal title in the said property was not passed or transferred to the assessee within the specified period of two years from the date of sale of the first property. 12. He, however, submitted that the Hon'ble Bombay High Court in the case of Humayan Suleman Merchant Vs CCIT in ITA No. 545/MUM/2002 order dated 18.08.2016 has taken a contrary view and has held that only the amount invested/utilized for the purpose of construction of house property before the due date of filing of the return u/s 139(1) only is entitled for exemption. He submitted that since there is no adverse decision of the Hon'ble jurisdictional High Court, therefore, in view of the decision of the Hon'ble Supreme Court in the case of vegetable product reported in 88 ITR 192, the decision which is in favour of the assessee should be followed. He submitted that since the assessee has paid an amount of Rs. 1,35,16,000/- before the filing of the return u/s 139(4) of the Act, therefore, the said amount should be allowed as deduction u/s 54 of the Act. 13. As re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee being within the time specified u/s 139(4) of the Act is eligible for exemption u/s 54 of the Act. Therefore, in the instant case also, the payments made upto the date of filing of return u/s 139(4) of the Act is eligible for deduction. 17. We have considered the rival arguments made by both the sides, perused the orders of the A.O and the ld. CIT(A) and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find the assessee in the instant case has sold the house property for a consideration of Rs. 1,70,00,000/- on 21.08.2012. After claiming indexed cost of acquisition at Rs. 24,19,820/- the assessee declared capital gain of Rs. 1,45,80,180/-. The assessee has claimed deduction of Rs. 1,52,14,375/- u/s 54 of the Act as investment made in new residential house amounting to Rs. 1,52,14,375/-. From the various details furnished by the assessee in the paper book as well as a perusal of the order of the authorities below, it is seen that the assessee has made payment of Rs. 81,72,207/- upto 10th July 2013 [i.e. before 31st July 2013] being the due date of filing of return. It is also seen from various details that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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