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TMI Blog2006 (8) TMI 126X X X X Extracts X X X X X X X X Extracts X X X X ..... onsideration is 1996-97. The issue involved in the present appeal is the claim for benefit of exemption from being charged to income-tax on the sale of properties used for residence under section 54 of the Income-tax Act, 1961. Section 54 of the Income-tax Act, 1961, is a beneficial provision of the Income-tax Act, 1961 for the assessee in the matter relating with the sale of properties used for residence, it appears, for the constitutional goal of providing residence to the citizen of India. It is fairly well-settled that in construing a beneficial enactment, the view that advances the object of the beneficial enactment and serves its purpose must be preferred to the one which obstructs the objects and paralyses the purpose of the beneficial enactment. In this regard, we may refer to the decision of the apex court in Kunal Singh v. Union of India [2003] 4 SCC 524. Since section 54 of the Income-tax Act, 1961, is required to be read and discussed in the present appeal it would be more convenient to quote section 54 of the Income-tax Act, 1961, in entirety. "54. Profits on sale of property used for residence.-(1) Subject to the provisions of sub-section (2), where, in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of income under sub-section (1) of section 139] in an account in any such bank or institution as may be specified in, and utilized in accordance with, any scheme which the Central Government may, by notification in the Official Gazette, frame in this behalf and such return shall be accompanied by proof of such deposit; and, for the purposes of sub-section (1), the amount, if any, already utilized by the assessee for the purchase or construction of the new asset together with the amount so deposited shall be deemed to be the cost of the new asset: Provided that if the amount deposited under this sub-section is not utilized wholly or partly for the purchase or construction of the new asset within the period specified in sub-section (1), then,- (i) the amount not so utilized shall be charged under section 45 as the income of the previous year in which the period of three years from the date of the transfer of the original asset expires; and (ii) the assessee shall be entitled to withdraw such amount in accordance with the scheme aforesaid." The facts which would suffice for deciding the present appeal are that the respondent/assessee sold his 1/4th share in a residential propert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iting the unappropriated amount of capital gain in the Capital Gains Deposit Scheme, 1988, within the stipulated time of furnishing the return of income-tax under section 139(1) of the Income-tax Act. The respondent/assessee preferred the first appeal being Appeal No. GUWA-75/99/2000 against the assessment order of the Assessing Officer to the Commissioner of Income-tax (Appeals), Guwahati. The first appellate authority had partly allowed the appeal by passing the final order dated September 24, 1999, wherein the first appellate authority held that even a lease also amounts to a transfer within the meaning of the Transfer of Property Act, 1882, by referring to two decisions of the Supreme Court in R.K. Palshikar (HUF) v. CIT [1988] 172 ITR 311 and A. R. Krishnamurthy v. CIT [1989] 176 ITR 417, 421, and as such the transfer in question between the respondent/assessee on the one side and Shri Radha Krishna Jalan and Smt. Anguri Devi Jalan on the other side is the transfer of capital asset within the provisions of section 2(47)(v) of the Income-tax Act but the first appellate authority held that the respondent/assessee could utilise only Rs. 14,43,254 (rupees fourteen lakhs forty-thre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he sale of the property used for residence could be deposited by the assessee before the date of furnishing return of income-tax under section 139 of the Income-tax Act and also that the sub-section (2) of section 54 of the Income-tax Act does not mention that the date of furnishing of return of income-tax should be construed within the meaning of section 139(1) of the Income-tax Act, 1961. The learned Income-tax Appellate Tribunal, Gauhati Bench was of the view that the date of furnishing of return of income-tax contemplated in sub-section (2) of section 54 should also include sub-section (4) of section 139 of the Income-tax Act inasmuch as sub-section (2) of section 54 of the Income-tax Act mentions only section 139 of the Income-tax Act without any further restriction or without confining to sub-section (1) of section 139 of the Income-tax Act, 1961. The operative portion of the order of the learned Income-tax Appellate Tribunal, Gauhati Bench, Gauhati, dated April 18, 2001, reads as follows: "9. We have carefully considered the submissions of the learned representatives of the parties. We have also gone through the orders of the authorities below and the copies of the document ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... representative of the assessee that the assessee has complied with the requirements as laid down in section 54(1) of the Act by purchasing the flat at a cost of Rs. 30 lakhs as against the capital gain of Rs. 29,73,048. Therefore, we agree with the learned authorized representative of the assessee that there has been no necessity to comply with the conditions for availing of the benefit from tax of the capital gain, as laid down under section 54(2) of the Act, i.e., to deposit the unpaid amount in a separate bank account under the capital gain account scheme. We are of the view that the assessee had already appropriated the entire capital gain for purchase of the new asset within the stipulated time. In this regard, we find support from the decision of the Kerala High Court in the case of K.C. Gopalan wherein it was held that the assessee is entitled to exemption under section 54 even though for the construction of the new house, the amount that was received by way of sale of his old property as such was not utilised. It was held by the Kerala High Court that no provision is made by the statute that the assessee should utilise the amount which he obtained by way of sale considerati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld be furnished before the expiry of one year from the end of the relevant assessment year or before the completion of the assessment whichever is earlier under sub-section (4) of section 139 of the Income-tax Act, 1961. The apex court in State of Maharashtra v. Santosh Shankar Acharya [2000] 7 SCC 463 held that it is too well known a principle of construction of statutes that the Legislature engrafted every part of the statute for a purpose. The legislative intention is that every part of the statute should be given effect. The Legislature is deemed not to waste its words or to say anything in vain and a construction which attributes redundancy to the Legislature will not be accepted except for compelling reasons. The apex court in Bhavnagar University v. Palitana Sugar Mill P. Ltd. [2003] 2 SCC 111, held that it is the basic principle of construction of statute that statutory enactment must ordinarily be construed according to their plain meaning and no words should be added, altered or modified unless it is plainly necessary to do so to prevent a provision from being unintelligible, absurd, unreasonable, unworkable or totally irreconcilable with the rest of the statute. Paras ..... X X X X Extracts X X X X X X X X Extracts X X X X
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