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TMI Blog2019 (7) TMI 1073X X X X Extracts X X X X X X X X Extracts X X X X ..... essee is entitled to exemption u/s.54. Accordingly, the assessee is entitled deduction u/s 54 of the Act for utilization of sale consideration for investment in new residential property within due date as stipulated u/s. 139. As already held that Section 139 cannot be meant only section 139(1), but it means all sub-sections of section 139. Thus, under su-section (4) of section 139 any person who has not furnished a return within the time allowed to him under sub-section (1) of section 142 may furnish the return for any previous year at any time before the expiry of one year from the end of the relevant assessment year or before the completion of the assessment year whichever is earlier. Since the assessee has fulfilled the requirement u/s 54 for exemption of the capital gain, therefore the assessee is entitled for the same. Even before us, no new facts or contrary judgments have been brought on record before us in order to controvert or rebut the findings so recorded by Ld. CIT(A). Therefore, we see no reasons to interfere into or deviate from the findings recorded by the Ld.CIT(A). Resultantly, this ground raised by the revenue stands dismissed. - I.T.A. No. 5923/M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome had e-filed on 27.08.2013 declaring total income of ₹ 3,06,787/-. The return was processed u/s. 143(1) of the Income Tax Act, 1961. Subsequently, the case was selected for scrutiny by issue of notice u/s. 143(2) of the Income Tax Act. The authorized representative appeared before the A.O. and filed details during the assessment proceedings. The assessee had shown long term capital gain of ₹ 85,60,916/- on sale of shares and claimed deduction of ₹ 82,89,448/- u/s 54F of I.T. Act on purchase of new flat. The AO had disallowed deduction u/s 54F and added back to the total income of the assessee. 5. Aggrieved by the order of the AO, the assessee preferred appeal before Ld.CIT(A) and Ld. CIT(A) after appreciating the facts of the present case, had allowed the appeal of the assessee. 6. Now before us, the revenue as well as assessee have preferred their respective appeal/ cross objection. Firstly we are dealing with the appeal filed by the revenue. 7. The solitary ground raised by the revenue relates to challenging the order of Ld. CIT(A) in deleting the disallowance of ₹ 82,89,448/- on account of exemp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te to file return u/s 139(1) of the Income Tax Act. 9. Ld. DR relied upon the judgment of Hon'ble Supreme court in the case of Prakash Nath Khanna Ors vs CIT another (2004) 266 ITR 1(SC), wherein the Apex Court interpreted the words due date as mentioned in section 139(1) and 139(4) of the Act. Therefore, while interpreting section 139(1) 139(2) and 139(4) of the Act, the Apex Court found that due dated certainly mean due date as prescribed in sub section 1 of section 139. Even though the concept of criminal prosecution is disastrous for assessee, the Hon'ble Apex Court has decided the intent of legislature behind the insertion of due date in section 139(1) of the Income Tax Act. The Hon'ble Apex Court has held that, even if a return is filed in terms of sub-section (4) of section 139 that would not dilute the infraction in not furnishing the return in due time as prescribed under sub-section (1) of section 139 otherwise the use of the expression 'in due time' would lose its relevant and it cannot be said that the said expression was used without any purpose. Ld. DR also relied upon the judgment in the case of Sri K. T. Biju Kannur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ead along with sub section 1 of section 139 and the due date for furnishing the return of income u/s 139(1) is subject to the extended period provided u/s 139(4). Hence, extended period u/s 139(4) has to be considered for the purpose of utilisation of the capital gain amount. Assessee is entitled to claim deduction u/s 54F of the Act for utilisation of sale consideration for investment in new residential property within due date as stipulated u/s 139 of the Act. In the cited case, the assessee had sold original assets on 21.11.2008 for sale consideration of ₹ 70,00,000.00, the said assessee then went on to file his return of income on 25.09.2009, within due date as per sub section 4 of section 139, due date as per section 139(1) being 31.07.2009. The assessee purchased new asset on 15.10.2009, therefore capital gain for the purchase of property has been utilised before the extended due date of filing of return u/s 139(4). 12. We have heard counsels for both the parties at length and we have also perused the material placed on record, judgment cited by the parties as well as the orders passed by revenue authorities. Before we decide the mer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, or which is not utilised by him for the purchase or construction of the new asset before the due of furnishing of 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 assesseee 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 utilised 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 purpose of sub section 1 the amount is any already utilised 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. Thus there are two different dates specified for the investment u/s 54F of the Act. In the first situation where the utilisation of sale consideration are made for purchase/construction of property before the date of filing the return, it was mentioned as before the date of furnishing the return of income under section 139 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... charged under section 45 as the income of the previous year; and 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 nil; or ( ii) if the amount of the capital gain is equal to or less than the cost of the new asset, the capital gain shall not be charged under section 45; and 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 bv Mm before furnishing such return fsuch deposit being made in any case not later than t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a plain reading of Sub-section (2) of Section 54 of the Income-tax Act, 1961, it is clear that only Section 139 of the Income-tax Act, 1961, is mentioned in Section 54(2) in the context that the unutilised portion of the capital gain on the sale of property used for residence should be deposited before the date of furnishing the return of the Income-tax under Section 139 of the Income-tax Act. Section 139 of the Income-tax Act, 1961, cannot be meant only Section 139(1) but it means all sub-sections of Section 139 of the Income-tax Act, 1961. 5.7 The Hon'ble Mumbai Bench of ITAT in case of Anil Kumar Omkar Singh Aurora v/s ITO 12(3)(4), Mumbai held that section 139(4) has to be read along with sub section 1 of section 139 and the due date for furnishing the return of income u/s 139(1) is subject to the extended period provided u/s 139(4). Hence, extended period u/s 139(4) has to be considered for the purpose of utilisation of the capital gain amount. Assessee is entitled to claim deduction u/s 54F of the Act for utilisation of sale consideration for investment in new residential property within due date as stipulated u/s 139 of the Act. In the cited case, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... due date as stipulate u/s 139 of the Act. Hence, grounds of appeal taken by assessee are allowed by reversing the orders of authorities below. 5.8 The Hon'ble Mumbai Bench of Tribunal in the case of Kishore H.Galaiya V/s.ITO [2012] 24 taxmann.com 11 (Mum), wherein on identical facts and circumstances, the issue has been decided in favour of the assesse. The Hon'ble Mumbai bench of ITAT discussed at length the provisions of section 54 with respect to due dates mentioned in section 139(1) and 139(4) of the I.T.Act. Finally the Hon'ble Mumbai bench of the ITAT held that if investment in new asset is made within the date as stated u/s 139(4) of I.T.Act, then the exemption u/s 54 of I.T.Act should be extended to the assessee. Further, the similar view taken by the other Court and Tribunal in the case of Smt.Rita Chetan Naik in ITA No.3986/Mum/2012 (AY.2008-09) dated 10-7-2013, CIT V/s Rajesh Kumar Jain (2006) 286 ITR 274 (Gauhati), FathimaBai V/s ITO (2009) 32 DTR (Kar) 243, Trustees of Tulsidas Gopaji Charitable and Chaleshwar Temple Trust (1994) 207 ITR 368 (Bom), CIT V/s. Jagtar Singh Chawla (2013) 215 Taxman 154 and P.R.Kulkarni and Sons (HUF) V/s.Ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an file return before the expiry of one year from the end of the relevant assessment year. The sale of the asset having taken place on January 13, 2006, falling in the year 2006-2007, the return could be filed before the end of the relevant assessment year 2007-08, i.e., March 31, 2007. Thus, subsection (40 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 assesse under subsection (1) to tile 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 sub-section (1). Similar is the view taken by the Dvision Bench of the Karnataka and GauhatiHgih Courts in FaitmaBai (2009) 32 DTK 243 and Rajesh Kumar Jalan (2006) 266ITR 274 (Gauhati) respectively. In view of the above, we find that due date for famishing the return of income as per section 139(1) of the Act is subject to the extended period provided under subsection (4) of section 139 of the Act. Consequently, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ransfer of a residential flat, provided he/she invests within a period of one year before or two years after the date on which the transfer takes place to purchase or within a period of three years after that date to construct, one residential house in India. The appellant has duly acquired a new house property within 2 years from the date of the original transfer of flat and has accordingly rightly claimed deduction us/ 54 of the Act. Section 54 only provides that the assessee has to purchase a house property for the purpose of his own residence within a period of one year before or after the date on which the transfer of his property took place or he should have constructed a house property within a period of two years after the date of transfer. It was further held that entitlement of exemption under Section 54 relates to the cost of acquisition of a new estate in the nature of a house property for the purpose of his own residence within the specified period.. 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, I came to conclusio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; 85,60,916.00. The A.O. disallowed the claim of assessee u/s 54F of the IT Act by holding that the time limit for investment of sale proceeds towards purchase/construction of new assets was as provided u/s 139, whereas the time limit for deposit of sale consideration in capital gain scheme account was as provided u/s 139(1) of IT Act. 14. We are of the view that section 54F of the Act only talks about deposit within the prescribed time period. Even on the plain reading of Sub-section (2) of Section 54 of the Income-tax Act, 1961, it is clear that only Section 139 of the Income-tax Act, 1961, is mentioned in Section 54(2) in the context that the unutilised portion of the capital gain on the sale of property used for residence should be deposited before the date of furnishing the return of the Income-tax under Section 139 of the Income-tax Act. In our view, section 139 of the Income-tax Act, 1961, cannot be meant only Section 139(1), but it means all sub-sections of Section 139 of the Income-tax Act, 1961. The provisions of section 54 are beneficial provisions and are to be construed liberally as has been held by the Coordinate Bench of ITAT, Chennai in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sub-sections of section 139 of the Act. Thus, under su-section (4) of section 139 of the Income-tax Act any person who has not furnished a return within the time allowed to him under sub-section (1) of section 142 may furnish the return for any previous year at any time before the expiry of one year from the end of the relevant assessment year or before the completion of the assessment year whichever is earlier. Since the assessee has fulfilled the requirement under section 54 of the Income-tax Act for exemption of the capital gain, therefore the assessee is entitled for the same. 16. Even before us, no new facts or contrary judgments have been brought on record before us in order to controvert or rebut the findings so recorded by Ld. CIT(A). Therefore, we see no reasons to interfere into or deviate from the findings recorded by the Ld.CIT(A). Hence, we are of the considered view that the findings so recorded by the Ld. CIT (A) are judicious and are well reasoned. Resultantly, this ground raised by the revenue stands dismissed . 17. In view of our above findings, the appeal filed by the revenue stands dismissed. C.O ..... X X X X Extracts X X X X X X X X Extracts X X X X
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