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TMI Blog2017 (1) TMI 1444X X X X Extracts X X X X X X X X Extracts X X X X ..... urn of income which falls on 31.07.2012. According to AO, it is a mandatory condition on the tax payers to deposit unutilized capital gains in the capital gains account and if she fail to fulfill this condition, she is not eligible for exemption u/s.54 / 54F of the Act. Hence, the AO disallowed a sum of 50,70,180/- from sale consideration as the said sum was not invested in a capital gains scheme, before the date of filing of return of income on 31.07.2012. Aggrieved, the assessee carried the appeal before the Ld.CIT(A). 3.1 On appeal, Ld.CIT(A) observed that the assessee had submitted a confirmation from M/s.N.Tech Infrastructure dated 28.08.2014 addressed to the AO stating that Rs. 56,57,144/- was received from the assessee before 31.07.2012. However, this was factually incorrect as Rs. 5,20,000/- only was withdrawn from the bank before 31.07.2012 and only post dated cheques were given to the builder. Therefore, Ld.CIT(A) confirmed the action of the AO. Against this, the assessee is in appeal before us. 4. Before us ld.A.R drew our attention to the following points for our consideration. a) The assessee had sold the vacant land situated at Kurinji Nagar, Perungudi for a sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id not also consider the improvement costs incurred by the previous owner, of a sum of Rs. 51,489/- incurred in the year 1988-89, which is also forming part of the costs of acquisition for the purpose of arriving at the capital gains on the sale of the asset. e) The assessee had furnished all the relevant documents that were required by the Learned Assessing Officer to establish the fact that: a) The entire sale consideration of Rs. 56,51,000/- was re-invested in the new house as per the Provisions of Section 54F of the Income Tax Act,1961 b) The payments towards the construction cost of Rs. 56,57,144/- was completely disbursed by the appellant before 31.03.2014, and hence are termed as utilised by the assessee within a period of three years towards the construction of the new house. c) As the appellant had utilised all the sale proceeds in the new house, before the due date of filing a return U/s 139(4) , which is 31.03.2014, a case of non - compliance cannot be made out on the assessee u/s 54F (4). d) The applicable cost inflation index is 161 of the year 1988, and that the previous owner had also incurred a sum of Rs. 51,489/- towards improvement, which is also to be c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a new house within 3 years from the date of original asset transferred. In case, it is not used for the purchase of new house or construction of new house, the assessee shall deposit the net consideration with the bank or an institution as may be specified in, and utilized in accordance with, any scheme which the Central Government notified in official gazette in accordance with rules framed by the Central Government. In this regard, the return shall be made before due date of filing of return u/s.139(1) of the Act. In our opinion, this plea of the ld.D.R has no merit. The fact that the assessee has reinvested the sale consideration in the construction of residential house on her own land situated at No.15, Vallalar Main Road, Chelli Nagar, Camp Road, Seliyur Chennai 600 073 for an agreed contract for an agreed construction work cost of 57 lakhs was not disputed by the Department. For this purpose, assessee entered into an agreement with M/s N. Tech infrastructure on September, 2011 and the construction of a house was agreed to be completed on or before March, 31st 2014. The assessee had deposited the consideration into her bank account in Axis Bank (A/c No. 423010100070090) and In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under sub-section (1), i.e., before the 31st day of July of the assessment year, the assessee can file return before the expiry of one year from the end of the relevant assessment year. 12. The sale of the asset having been taken place on January 13, 2006, falling in the previous year 2006-2007, the return could be filed before the end of the relevant assessment year 2007-08, i.e., March 31, 2007. Thus, sub-section (4) of section 139 provides the extended period of limitation as an exception to sub-section (1) of section 139 of the Act. Sub-section (4) is in relation to the time allowed to an assessee under sub-section (1) to file return. Therefore, such provision is not an independent provision, but relates to time contemplated under sub-section (1) of section 139. Therefore, such sub-section (4) has to be read along with subsection (1). Similar is the view taken by the Division Bench of the Karnataka and Gauhati High Courts in Fatima Bai [2009] 32 DTR 243 and Rajesh Kumar Jalan [2006] 286 ITR 274 (Gauhati) respectively." 6.2 Further, Co-ordinate Bench in the case of ITO Vs. K.S.Narasimhan, HUF for assessment year 2004-05 ITA No.166/Mds./2010 vide order dated 25.03.2011 wher ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the utilization is beyond the due date even the kind was not at all purchased, in the alternative, the deposits were also not made within the specified date, the assessee is not entitled to the benefit as envisaged under Section 54F. Therefore, we agree with the findings of the Id. CIT(A) and accordingly the ground raised by the assessee is dismissed." 8. In our opinion, this decision may not be applicable on facts here. In the said case, even the land was not at all purchased before the due date to filing of the return and there was no utilization at all. It was in these circumstances, he Tribunal came to an opinion that assessee was not entitled to benefit under Section 54F of the Act. There was no utilization of the sums by the assessee there nor any investment in residential house upto the due date of the return. Here, on the other hand, assessee had utilized a sum of 3,96,000/- before the date of filing of the return. Assessee filed his return on 19.4.2004 for the impugned assessment year and the due date for filing return was still far away. Thus the intention of the assessee to utilize the sum for the purpose of construction of the residential house could never be doubted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ain earned towards consideration of new residential house within extended period u/s 139(4) of the Act, the claim made by assessee for exemption u/s 54F of the Act could not be denied. 7. The similar issue had also come up before the Honbie Guwahati High Court in the case of CIT V/s Rajesh Kumar Jalan (supra) and the Hon'ble High Court has held that if the assessee fulfils the condition for exemption u/s 54 within the extended time of filing of return u/s 139(4) of the Act, the assessee is entitled to exemption u/s 54 of the Act. In view of above, we hold that the assessee is entitled to claim deduction u/s 54F of the Act for utilization of sale consideration for investment in new residential property within due date as stipulated u/s 139 of the Act. Hence, Grounds of appeal taken by assessee are allowed by reversing the orders of authorities below." 7. So far as, the time limit for assessee to invest the amount of capital gains in purchase/construction of new residential asset or investment in capital gains scheme u/s.54F of the Act is concerned, it has been affirmed by the High Court that "due date" refers to the "extended due date" u/s.139(4) of the Act. 7.1 In view of this, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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