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TMI Blog2019 (7) TMI 1058X X X X Extracts X X X X X X X X Extracts X X X X ..... provision as a whole along with Clauses [a] and [b] to the proviso, the intention of the Legislature would be gathered that the unutilized capital gain amount under Section 54 F[4] has to be charged under Section 45 as income of the previous year, after the expiry of three years from the date of sale of the capital asset which in the present case is the assessment year 2016-17. In the circumstances, the assessee is entitled to the withdrawal of the amount deposited under Sub-Section (4) of Section 54F of the Act under the capital gain account subject to deduction of tax applicable to the case on hand. The respondent shall consider the petitioner s application in Form G submitted in terms of the observations made hereinabove. With the aforesaid observations and directions, writ petition stands disposed of. - WRIT PETITION No.13541/2018 (T – IT) - - - Dated:- 18-7-2019 - MRS. S. SUJATHA J. PETITIONER [BY SRI P.N.S HETTY, PARTY IN PERSON.] RESPONDENT [BY SRI K.V. ARVIND, ADV.] O R D E R The petitioner has claimed the following reliefs: a. Order the respondent to submit his claim made in Annexure-A1 to the Memorandu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4) of the Act and the proviso thereof is not properly appreciated by the respondent. The petitioner had deposited the sale consideration received on transfer of certain capital assets in the capital gain account scheme with the bankers and utilized ₹ 21,32,470/- out of ₹ 1,15,00,000/- capital gain amount deposited which squarely falls under the proviso to section 54F(4) of the Act. The respondent failed to interpret the phrase wholly or partly enumerated in the proviso in a right perspective. According to the petitioner, the amount deposited under Section 54F (4) of the Act if utilized partly for the purchase or construction of the new asset within three years, then the unutilized amount shall not be liable to tax under Section 45 of the Act. 6. Learned counsel Sri. K.V.Aravind appearing for the Revenue justifying the impugned notice submitted that the reasoning of the respondent is in conformity with Section 54F(4) of the Act and the proviso thereof. It was submitted that the amount of capital gain unutilized under Section 54F(4) of the Act has to be charged under Section 45 of the Act as income of the previous year after the expiry of three years from the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 45 as 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 the unutilized amount in accordance with the scheme aforesaid. (emphasis supplied) 9. The issue involved herein is similar to the subject matter of the case R.S.Sharma Vs. Income Tax Officer, Bangalore considered by this Court in ITA No. 223/2009. This Court placing reliance on the judgment of this Court in the case of CIT Vs. Khoobchand M. Makhija (2014) 223 ITR 189 observed that when the statute prescribes expressly when the capital gain is to be offered to tax, it shall be treated accordingly. If the said amount is deposited in a Nationalized Bank as required under law, in capital gain account the deposit is construed as investment in new asset. Subsequently, if the amount deposited is not utilized, the entire capital gain or the unutilized capital gain chargeable under Section 45 of the Act is to be offered for tax only in the previous year in which the period of three years from the date of transfer of the original asset expires. 10. It i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (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. 54-B (2) The amount of the capital gain which is not utilized by the assessee for the purchase 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 case of the assessee for furnishing the return 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 of the new asset together with the amount so deposited shall be dee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erpretation has to be given to the provision to achieve the object of the Act. To ascertain the intention of the legislature, the provision has to be read as a whole not in isolation. 15. It is apt to refer to S.Sundaram Pillai etc., V/s. V.R.Pattabiraman AIR 1985 SC 582 wherein, scope of proviso is analysed. The Hon'ble Apex Court has held thus: A proviso may have three separate functions. Normally, a proviso is meant to be an exception to something within the main enactment or to qualify something enacted therein which but for the proviso would be within the purview of the enactment. In other words, a proviso cannot be torn apart from the main enactment nor can it be used to nullify or set at naught the real object of the main enactment. While interpreting a proviso care must be taken that it is used to remove special cases from the general enactment and provide for them separately. In short, generally speaking, a proviso is intended to limit the enacted provision so as to except something which would have otherwise been within it or in some measure to modify the enacting clause. Sometimes a proviso may be embedded in the main provision and becomes a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt of a statute and no word of a statute can be construed in isolation. Statutes have to be construed so that every word has a place and everything is in its place 18. In the light of the aforesaid judgments, it is clear that the proviso appended to Section 58[4][f] has to be read as a whole along with the Clauses [a] and [b] therein which would explain the real intendment of the phrase not utilized wholly or partly . In the context, the proviso to Section 54 F[4] becomes an integral part of the enactment acquiring the tenor and colour of the main provision. To make the provision workable, the arguments of the petitioner that the Clauses [a] and [b] of the proviso need not be addressed to, cannot be countenanced for the reasons aforesaid. Thus, it can be held that on reading of the provision as a whole along with Clauses [a] and [b] to the proviso, the intention of the Legislature would be gathered that the unutilized capital gain amount under Section 54 F[4] has to be charged under Section 45 as income of the previous year, after the expiry of three years from the date of sale of the capital asset which in the present case is the assessment year 2016-17. 19. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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