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TMI Blog2019 (1) TMI 1134X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee filed return of income on 31.03.2010 declaring total income of Rs. 15,21,169/-. The case was selected for scrutiny and statutory notices were issued. The assessee derived income from salary & has shown income from house property, business and profession, being share of partnership firm and other sources. It was noticed that the assessee had sold out her residential building at second floor, W-12, G.K.-1, New Delhi as per sale deed executed on 05.06.2008 for sale consideration of Rs. 2.20 crores and claimed long-term capital gains of Rs. 1,71,52,494/- as exempt u/s. 54 of the IT Act. In the computation of income, the assessee had claimed this exemption on the basis of investment/construction in new residential property at A-26, New Fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... use property which was paid from her saving bank account and capital account of the partnership firm out of which Rs. 49,03,637/- related to the period from 01.06.2008 to 30.09.2009, i.e., from the date of sale to the date of furnishing of return of income and he also noted that the assessee failed to open capital gain account before 30.09.2009. Therefore, the claim on account of construction made on later period is not allowable. Accordingly, the assessee was entitled for deduction u/s. 54 only to the extent of Rs. 49,03,637/- and the balance amount of capital gain to the tune of Rs. 1,22,48,857/- was added back to the total income of the assessee. 4. In appeal before the ld. CIT(A), the assessee filed detailed written submissions and rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 61,33,234/- and upto 30.09.2009, total amount was spent on the construction of house to the tune of Rs. 49,03,637/- which has been allowed as exempt u/s. 54 of the Act by the Assessing Officer out of the total capital gain. It is also not in dispute that the assessee has not opened any capital gain account within due date of filing the return of income. Now, we have to decide two issues. Firstly, the repayment of loan which was taken in 2004 for the purchase of property and expenditure incurred in construction of house after the due date of filing the return of income. The provisions of section 54 read as under : Profit on sale of property used for residence. 54. (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 ..... nd for the purpose of computing in respect of the new asset any capital gain arising from its transfer within a period of three years of its purchase or construction, as the case may be, the cost shall be reduced by the amount of the capital gain. (2) The amount of the capital gain which is not appropriated by the assessee towards the purchase of the new asset made within one year before the date on which the transfer of the original asset took place, or which is not utilised by him for the purchase or construction of the new asset before the date of furnishing the return of income under section 139, shall be deposited by him before furnishing such return [such deposit being made in any case not later than the due date applicable in the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tructed the house within three years from the date of sale of original asset. If the assessee is unable to invest entire capital gain before furnishing of return of income u/s. 139, he has to deposit the unutilized amount of capital gain by opening an account in any nationalized bank under the Capital Gain Scheme. From the perusal of the order of the authorities below, we find that the assessee has furnished his return of income on 31.03.2010 u/s. 139(4) and he has spent money to the extent of Rs. 61,33,234/- upto the filing of its return. The ld. CIT(A) has followed the decision of Hon'ble Gauhati High Court in the case of CIT v. Rajesh Kumar Jalan, 286 ITR 274. In view of the above decision, the assessee can deposit the balance capital ga ..... X X X X Extracts X X X X X X X X Extracts X X X X
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