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TMI Blog2017 (10) TMI 1143X X X X Extracts X X X X X X X X Extracts X X X X ..... /c can be considered as compliance u/s 54(2) of the Act, provided the assessee has deposited the entire capital gains and has not availed any loan against the said A/c and has utilized the same for purchase of the new property. The issue is therefore, set aside to the file of the AO only for verification of this aspect. The other objection of the AO that the new property is purchased in the joint names of the assessee and his son also is not sustainable in view of the decision of the Hon'ble Delhi High Court in the case of CIT vs. Ravinder Kumar Arora [2011 (9) TMI 343 - DELHI HIGH COURT]. Assessee’s appeal is treated as allowed for statistical purposes. - ITA No.1707/Hyd/2016 - - - Dated:- 31-8-2017 - Smt. P. Madhavi Devi, Judicial M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hence there is no default under Section 54 (2) of the Act considering that the time limit must be interpreted to include section 139 (4) of the Act. 5. The Learned Commissioner (Appeals) failed to appreciate that the time limit under Section 54 (1) of the Act has to be read as including the time limit under Section 139 (4) of the Act and hence the appellant having purchased the new asset within the period prescribed under Section 139 (4), the exemption cannot be denied merely on the ground that appellant has deposited the capital gains in term deposit with bank within the time instead of depositing in the Capital gains Account within the period prescribed under Section 139 (1). 6. The Learned Commissioner (Appeals) failed to ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4F of the Act with the narration Investment in Capital Gain amount in Bank ₹ 50,40,000 and thus admitted Nil capital gain. In the cash account filed along with the return of income also, the assessee has shown that this amount was deposited in capital gains account. In the return of income filed, the assessee has claimed deduction u/s 54F of the Act on the entire amount received towards his share i.e. ₹ 50,40,000. 3. During the course of assessment proceedings u/s 143(3) of the Act, the AO asked the assessee to furnish the details of deposits in capital gains A/c. Though the assessee claimed that the amount of capital gain was invested in capital gains a/c u/s 54(2), the assessee, vide letter dated 16.11.2015 came up with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lan reported in (2006) 286 ITR 274 (Gau.) and also the decision of the Hon'ble Punjab Haryana High Court in the case of CIT vs. Jagriti Aggarwal reported in (2011) 339 ITR 610 (P H H.C). 6. The learned DR, on the other hand, supported the orders of the authorities below. 7. Having regard to the rival contentions and the material on record, we find that the following facts are relevant for adjudication of the issue: i) Date of sale of the property 9.2.2012 ii) Date of deposit of Previous year 2011-12, A.Y 2012-13 capital gains in term deposit a/c 13.8.2013 iii) Due date for filing the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n is also chargeable to tax as income from other sources . Taking the above features into consideration and also that the assessee has not utilized the term deposit for any other purpose till investment in the residential flats, we agree with the contention of the assessee that the defect is only a technical defect which can be condoned provided he fulfils all the conditions of the capital gains a/c except for the nomenclature of the a/c. It is not the case of the Revenue that the assessee has violated any of the above conditions. 9. The other argument of the assessee is that the funds have been utilized for investment in residential flats within the period allowed to file the return of income u/s 139(4). For this purpose, the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, in the case of Petron Engineering Construction (P) Ltd vs. CBDT (1989) 175 ITR 523 (S.C), the Hon'ble Supreme Court held that It is true that an exemption provision should be liberally construed but this does not mean that such liberal construction should be made doing violence to the plain meaning of such exemption provision. Liberal construction will be made whenever it is possible to be made without impairing the legislative requirement and the spirit of the provision . 13. Therefore, it is important to understand the legislative intent behind the introduction of section 54 of the I.T. Act. It was introduced with a view to encourage house construction in India as explained by CBDT in its Circular No.348 dated 30.06.1982. We a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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