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TMI Blog2019 (8) TMI 983X X X X Extracts X X X X X X X X Extracts X X X X ..... rwal [ 2011 (10) TMI 279 - PUNJAB AND HARYANA HIGH COURT] wherein it has been held. That the assessee is entitle to claim benefit u/s 54, if the investment was made in purchase of new assets or deposit in account before the expiry of one year from the end of the relevant assessment year or before the completion of the assessment whichever is earlier under sub-s. (4) of s. 139. Contention of the ld CIT-DR that the second proviso to section 54E is also relevant, But this is not a case of compulsory acquisition where second proviso to section 54E is applicable similarly the provisions of section 54 and 54B are pari materia, but the provision of section 54E / 54EC are not pari materia with 54B / 54F. We found that the case law cited by the learned AR in the case of Chanchal Kumar Sircar Vs ITO [ 2012 (2) TMI 363 - ITAT KOLKATA] is applicable because of the circumstances in that case it was held that the period of limitation for making deposit or investment in new assets should be reckoned from the date of actual receipt of the consideration- If period is reckoned from date of agreement and receipt of part payment at the first instance, then it would lead to an impossible situation by a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le. (ii) The Ld. CIT(A) failed to consider the genuine reasons which delayed the investment in the purchase of new asset and thereby erred in disallowing the deduction claimed by the assessee u/s 54B. (iii) The Ld. CIT(A) failed to consider that the agricultural land sold by assessee is not an asset u/s 2(14)(iii)(a) or (b) as these provisions stood then and therefore no capital gains are leviable. The agricultural land sold by the assessee is not urban but rural agricultural land. (iv) The Ld. CIT(A) failed to consider the fact that the agricultural land sold by the assessee is not an asset with reference to provisions of section 2(14)(iii)(a) or 2(14)(iii)(b) as these stood then and thus the provisions of capital gains are not attracted in the case in view of notification dated 06.01.1994. 3. Rival contentions have been heard and record perused. The brief facts of the case are that during the year under consideration, the assessee has shown her income from tuition and agriculture. Apart from it, the assessee has sold agricultural land for total consideration of ₹ 5,68,81,546/- and shown long term capital gain of ₹ 5,39,67,384/- and further claimed deduction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le consideration was received in the form of advance for an amount of ₹ 21,00,000/- i.e. ₹ 7,00,000/- for each land and balance consideration was received vide cheques dated 06/08/2014 and 05/08/2014 which were cleared and received in the accounts on 12/08/2014, 20/08/2014 and 19/08/2014 for different amounts. It was further mentioned that these cheques have been recorded in the sale deeds executed for these lands. Thus, it was submitted that the consideration has been received in August, 2014 and further the agricultural lands have been purchased on 28/08/2014 through registered sale deeds, hence the deduction was allowable. Further reliance was placed on the provisions of Section 54E proviso 2 and section 54H. The AO rejected these submissions and concluded that since the net consideration was neither deposited in capital gain account balance till the due date for filing the return u/s 139(1) and investments in agricultural land were made on 28/08/2014 i.e. subsequent to the date of filing the return, thus the deduction u/s 54B was not allowable. In the present proceedings, the submissions as made in the assessment proceedings were reiterated. It was submitted that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be the cost of the new asset: Provided that if the amount deposited under this sub-section is not utilised wholly or partly for the purchase of the new asset within the period specified in sub-section (1), then,- (i) the amount not so utilised shall be charged under section 45 as the income of the previous year in which the period of two 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." As is clear from the facts discussed earlier, the appellant has neither p deposited the amount in the capital gains scheme nor purchased the new asset, not only till the date for filing the return under section 139(1) but even the extended date under section 139(4). The agricultural lands are purchased only on 28.08.2014. The plea taken by the appellant that since the cheques mentioned in the sale deed were post dated and so the consideration has actually been received later and so these conditions could not be fulfilled and appellant has invested the amounts as soon as they were received, needs to be rejected. The AR has placed reliance on the case CST Vs J H Golt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... capital gain can be charged u/s 45 only on transfer of capital asset. We do not think that this kind of interpretation can be made while interpreting Section 45 r.w.s. 48 by invoking the rule that there cannot be any tax on notional receipt." In view of the facts as above and judicial decision the appellant has clearly not fulfilled the requirements of the provisions of 54B and the deduction disallowed by the AO is confirmed. Ground of appeal is dismissed." 5. Now the assessee is in further appeal before us. The ld AR of the assessee submitted that in this case the sale consideration was received at ₹ 7,00,000/- cash in each case on 09.02.2013, 11.02.2013 & 12.02.2013. Thus a sum of ₹ 21,00,000/- was received in February 2013. Balance amount was received through cheques and stands accounted for in the bank account of the assessee with Oriental Bank of Commerce in August-2014. Apparently, the sale conditions were such that post-dated cheques were received at the time of sale on 06.02.2013 and the amount of ₹ 5,47,81,456/- (56881546-2100000) was received in August 2014. Soon on receipt of this sale consideration of ₹ 5,47,81,456/- the assessee immediately ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cial features of the case the Learned Assessing Officer should have allowed deduction as claimed by the assessee. The Assessing Officer should have considered the fact that when the sales consideration itself has been received late, how could the assessee be expected to make investments prior to receipt of the sales consideration. It is only when the money is received in hands that assessee could make investments. In support of above proposition he relied upon the following case laws: (i) Chanchal Kumar Sircar vs. INCOME TAX OFFICER (KOLKATA TRIBUNAL) (2012) 16 ITR 0091, (2012) 50 SOT 0289 (ii) S. GOPAL REDDY vs. COMMISSIONER OF INCOME TAX (HIGH COURT OF ANDHRA PRADESH) (1990) 181 ITR 0378 (iii) COMMISSIONER OF INCOME TAX vs. CELLO PLAST HIGH COURT OF BOMBAY (2012) 76 DTR 0439) (iv) RAM AGARWAL vs. JOINT COMMISSIONER OF INCOME TAX (BOMBAY TRIBUNAL) (2002) 81 ITD 0163 (v) COMMISSIONER OF INCOME TAX vs. AKBAR ALI DHALA (HIGH COURT OF MADRAS) (2014) 89 CCH 0209 Chen HC/ 226 Taxman 254 (vi) ACIT vs. KAMLAKAR MOGHA (HIGH COURT OF BOMBAY) (2015) 125 DTR 0273 (Bom), 9. In the additional ground so raised at sl. No. (iii) and (iv) it was submitted in the written submissio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee more tax than that which is due and payable by the assessee. It is in aforesaid circumstances that as far back as in 11/04/1955 the Central Board of Direct Tax had issued a circular directing AO not to take advantage of assessee's ignorance and/or mistake. Therefore the Circular should always be borne in mind by the officers of the respondent- revenue while administering the said Act. (ii) STREAM INTERNATIONAL SERVICES PVT. LTD. vs. ASSISTANT DIRECTOR OF INCOME TAX (INTERNATIONAL TAXATION) (2013) 023 ITR 0070 Having heard the rival submissions and perused the relevant material on record, we find that the purpose of income tax assessment is to determine correct income of the assessee. As the Revenue cannot allow an assessee to depress his income, in the same manner, it is not permissible to the Revenue to take advantage of the ignorance or mistake of the assessee in offering more than due income. It is trite that no tax can be collected except as per law. Circular No. 14(XI-35) of 1955 dated 1.4.1955 cautions the Officers of the Department from taking advantage of ignorance of an assessee as to his rights. The Hon'ble Bombay High Court in court in the case of Nir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... im in the return before the Assessing Officer. (v) Anju Mittal v/s ACIT. (ITAT JP) - ITA 201/JP/2014 dt 30.04.15 (vi) Keshavji Ramji v/s CIT (SC) 183 ITR 1 (vii) J.P. Boder Co. v/s CBDT (SC) 223 ITR 271 (viii) CIT v/s Hero Cycles (SC) 228 ITR 463 (ix) CIT v/s National Thermal Power Co. Ltd. (SC) 157 CTR 249 (x) C.I.T v/s Ramco International 332 ITR 306 (P&H) (xi) C.I.T v/s Bhaskar Mitter (Cal) 73 TAXMAN 437 (xii) C.I.T v/s Rajasthan Fasteners Pvt. Ltd. (Raj) 100 DTR 152 (xiii) Wipro Vs. CIT 282 CTR 346 (xiv) CIT Vs. Prithvi Brokers and Share Holders Pvt. Ltd. (2012) 252 CTR 151 (Bom) 10. The ld AR has also drawn our attention towards the CBDT CIRCULAR No. 014 (XL-35) and submitted that the Circular no. 014 (XL-35) issued by the Board as back as 11th April 1955 wherein the Board has impressed upon the Officers of the Department that no advantage should be taken on assessee's ignorance to collect more than out of him than is legitimately due from him. It has been specifically mentioned in the circular that the mandatory relief about exemption from tax must be granted whether claimed or not. Thus the circular makes it clear that if the assessee has not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... : The benefit to be obtained by registration should be explained in appropriate cases. Where an application for registration presented by a firm is found defective, the officer should point out the defect to it and give it an opportunity to present a proper application. (e) Sec. 33A : Cases in which the ITO or the Asstt. Commissioner thinks that an assessment should be revised, must be brought to the notice of the CIT. (f) Sec. 35 : Mistakes should be rectified as soon as they are discovered without waiting for an assessee to point them out. (g) Sec. 60(2) : Cases where relief can properly be given under this sub-section should be reported to the Board." 11. The ld AR has also drawn our attention towards the provisions of section 2(14)(iii) and submitted that the provisions of section 2(14)(iii) as these stood for the relevant Assessment Year 2013-14 are quoted below:- Section 2(14)(iii)(a) and 2(14)(iii)(b) - [(iii) agricultural land46 in India, not being land situate- (a) in any area which is comprised within the jurisdiction of a municipality46 (whether known as a municipality, municipal corporation, notified area committee, town area committee, town committee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated not in the jurisdiction of a municipality cannot be treated as capital asset.". The claim of the assessee is that the land sold by him was agricultural land being not situate in the jurisdiction of a Municipality having population not less than 10000. The assessee submitted that the land sold by her was agricultural land being situate under the jurisdiction of Gram Panchayat Muhana which is not Municipality in any way and also have population less than 10000. These facts remained unconsidered by the Learned Assessing Officer. The above certificates very clearly states that the agricultural land was in the jurisdiction of Gram Panchayat Muhana. It has also been specifically mentioned in both the certificates that the agricultural land did not fall under the jurisdiction and administrative control of Municipality or Council. Thus the conditions of section 2(14)(iii)(a) are fulfilled that the agricultural land is not in the jurisdiction of a Municipality not to speak any population.. Thus the agricultural land is not an asset in view of the provisions of section 2(14)(iii)(a)). These certificates very clearly lay down that being not under the jurisdiction of any Municipal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ill be liable to income-tax for the asst. yr. 1970-71 and subsequent years. However, in view of the proposed amendment to s. 47 of the IT Act, under cl. 11 of the Bill, capital gains arising from transfers of such land effected prior to 1st March, 1970, will be excluded from taxation. Agricultural land which is situated outside such municipal or other urban areas or the notified adjoining areas will, however, continue to be excluded from the term 'capital asset' and no capital gains tax will be payable with reference to the transfer of such agricultural land, as hitherto." ((1970) 75 ITR (St) 69) (B) Further in the memorandum explaining the provision of this Finance Bill it was explained that - "Presently, capital gains arising from the transfer of a capital asset are chargeable to income-tax. The definition of 'capital asset' excludes from its scope, inter alia, agricultural land in India. Accordingly, no liability to tax arises on gains derived from transfer of agricultural land in India. This exemption of agricultural land from the scope of the levy of tax on capital gains has a historical origin and is not due to any bar in the Constitution on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Khurd falling under the Gram Panchayat of Sohela, Tehsil Peeplu, District Tonk The land was thus under the control of Gram Panchayat Act and not under the Administrative Control of Tonk Municipality. The Hon'ble ITAT has held as under: - "From a careful reading of the idea behind the amendment introduced by the Finance Act, 1970 one thing appears to be clear, namely, that the definition of 'capital asset' was enlarged so as to bring within its fold some lands, which are factually agricultural lands, because of the potentiality which such lands possessed in view of the urbanisation. It is well known that the cities in India are growing fast. Those lands which are adjacent to the city areas, which were essentially rural areas, are gradually getting urbanised with the result that the value of such proportion have been going up. It is also well known that the value of urban lands is much higher than the value of lands in the rural areas. The Parliament wanted to bring the surplus arising out of sale of agricultural lands also within the net of taxation under the capital gains, if essentially those lands partake the character of urban land. It is also very clear fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rban area. Municipality is nothing but a body for local self-government of an urban area. One cannot conceive of a municipality for a rural area. At the cost of repetition, we may state that the word 'municipality' occurring in s. 2(14) (iii) (a) must be related to the local self-government body for urban areas. Therefore, the area falling within the urban areas of the local self-governing body would be caught within the mischief of s. 2(14) (iii) (a). For an area where there is no municipality and there is only a Panchayat (local self-government for rural areas) s. 2(14) (iii) (a) is out of place."….. … . 16. For all the above reasons, we hold that the provisions of s. 2(14) (ii) (a) are not applicable to the rural areas of Union territory of Delhi and Nangal Dewat being a part of the rural area, the agricultural lands therein are outside the definition of capital asset. The capital gains, therefore, cannot be charged on the surplus arising out of the transfer of the lands in the village Nangal Dewat. The order of the CIT(A) is accordingly upheld." In view of the aforesaid decision the addition made deserves to be deleted. (D) Favourable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e controls falls within the jurisdiction of Phagwada municipality it cannot be considered within the 8 km of municipal limit of Jalandhar. Urbanisation of an area, then, falls within the exclusive domain of the concerned municipality exercising regulatory as well as administrative control over such area. It is such concerned municipality, id est, the parent municipality or jurisdictional municipality of the area, which has to carry out the urbanisation of the area. Areas situate within the local limits of a Gram Panchayat are govered bylaws applicable to such area and not by any other municipality. 2 K. Parameshwaran vs. Income Tax Officer 2 ITD 371 It is clear from what we have set out that the concept of municipalities relates to urban local self-government and the concept of panchayat to rural self-government. Both these concepts which are mutually exclusive were well-known and well-established by the time the amendment to s. 2(14)(iii) was made with effect from 1st April, 1970. Since the concepts were well-known it would follow that if the intention of Parliament was to include panchayats also in the term "municipality" it would have been so mentioned in the sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... drapradesh Municipality Act as such land cannot be treated as capital asset. 6 CIT vs. Charan Singh and Nafe Singh 101 ITR 46 (Del) The decision clearly laid down that although the land was situate in the overall jurisdiction of Delhi Municipality but was governed by Gaon Sabha Nagal Dewat having population less than 10000 and hence the same was not an asset. The village was under the Administrative Control of Gaon Sabha Nagal Dewat and hence it was rural agricultural land. The crux of the matter is that once the agricultural land is found to be rural agricultural the provisions of section 2(14)(iii) (a) or (b) are not applicable. In the case of the assessee the land sold was rural agricultural land. The learned A.O. erred in applying the provisions of section 2(14) (iii) (a) or (b) on the sale such rural agricultural land. The assessee's AR also erred in showing the agricultural land as capital asset and claiming deduction u/s 54B. However the discussion establishes beyond doubt that the agricultural land sold was rural agricultural land. 13. The ld AR has also drawn our attention towards the additional ground No. (iv) of the appeal and submitted that the land sold ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... km of the local limits of the municipality as notified by Central Govt. It is submitted that in this regard the Central Govt. issued notification on 06.01.1994 and thereafter there has been no notification on the issue. A copy of this notification dated 06.01.1994 is available on paper book cited supra. As per this notification explanation 2 the local limits of the municipality shall be reckoned as on the date of the unification i.e. 06.01.1994. In other words the lands situate within 8 km of the municipal limits as on 06.01.1994 shall be covered under the provisions of section 2(14)(iii)(b). It is submitted that as on 06.01.1994 the land of the assessee was not within the distance of 8 km. from the municipal limits. In view of this the provisions of section 2(14)(iii)(b) are also not applicable. It is submitted that the notification no. 9447 issued by the Central Govt dated 06.01.1994 lays down limit of 8 km. from the Municipal Limits as on 06.01.1994. It is submitted that the Municipal limits have been notified by State Govt in Gazette on 25.09.1994. Copy of Gazette Notification issued by State Govt dated 25.09.1994 is available on paper book page number 38 to 46. Strictly speaki ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orities below and contended that for claiming deduction u/s 54B, the new agriculture lands should have been purchased on or before 05.08.2013 i.e. the date of filing of ROI and if the sale consideration is not used for purchase of agriculture land, then the same should have been deposited in the capital gains deposit account scheme. It is an undisputed fact that no such deposits were made in that scheme by the assessee. 15. Reliance was placed by the ld. CIT-DR on the decision of the Hon'ble High Court of Bombay in the judgement dated 18.08.2016 in the case of Humayun Suleman Merchant Vs CCIT [2016] 73 taxmann.com 2 (Bombay) considered a number of decisions on the issue including the case of CIT vs. K. Ramachandra Rao [2015] 230 Taxman 334 (Kar.), CIT vs. Ravindra Kumar Arora [2012] 342 ITR 38 (Del.) and distinguished the decision of Hon'ble High Court of Gauhati in the case of CIT Vs Rajesh Kumar Jalan (Supra) as relied upon by the appellant and held as under: "As the instant case is for assessment year 1996-97, it is the amended provision which applies. Therefore, now section 54F(1) which grants exemption from Capital gain tax where a flat is purchased either with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 35 lakhs, the balance of the amounts subject to capital gains tax has not been utilized before date of furnishing of return of income, i.e., 4-11- 1996 under section 139.Therefore, on plain interpretation of section 54F, it appears that the impugned order of the Tribunal cannot be faulted. [Para 6(i)] The mandate of section 54F(4) is clear that amount which has not been utilized in construction and/or purchase of property before filing the return of income, must necessarily be deposited in an account duly notified by the Central Government, so as to be exempted. [Para 6(o)] Further, section 54F(4) specifically provides that the amounts which have not been invested either in purchase/construction of house have to be deposited in the specified accounts before the due date of filing of return of income under section 139(1). [Para 6(p)] (emphasis supplied) It is a settled position in law that no occasion to give a beneficial construction to a statute can arise when there is no ambiguity in the provision of law which is subject to interpretation. Thus, in the face of the clear words of the Statute the intent of parties and/or beneficial construction is irrelevant. In t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to exemption of amount which was invested in acquiring new residential property till date of filing of return of income - Held, yes [Para 9]. 17. Reliance was also placed on by the ld. CIT-DR the decision in the case of Shri Hariharan Ramasubramanian Vs ITO in I.T.A. No. 1616/Mum/2017 dated 29.08.2018, it has been held by the Hon'ble Mumbai Tribunal that: "6 ……We have considered rival contention and perused the material on record including cited case laws. The facts of the case are elaborately discussed by us in preceding para's of this order which are not repeated again. The dispute between rival parties is in narrow compass and the Hon'ble Bombay High Court in Humayun Suleman Merchant(supra) has held that even if the assessee has not invested in the notified bank account under capital gain scheme of the bank as mandated u/s 54 of the 1961 Act but still the benefit of deduction u/s 54 of the 1961 Act cannot be denied for investments made in new residential flat till the date of filing of return of income by the assessee with Revenue. Thus in our considered view keeping in view decision of Hon'ble jurisdictional High Court in the case of Humay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of new residential House) before the due date of filing of return of income. The assessee simultaneously claims that another ₹ 5 lakhs (50% of ₹ 10 lakhs similarly invested) has been invested in the residential property before the actual filing of the return on 25/08/2011 i.e. within the time limit provided under s.139(4) of the Act. 9.2 Section 54(2) enjoins that the capital gain is required to be appropriated by the assessee towards purchase of new asset before furnishing of return of income under s. 139 of the Act. Alternatively, in the event of non-utilization of capital gains towards purchase of new asset, the assessee is required to deposit the capital gains in specified bank account before the due date of filing of return of income under s. 139(1) of the Act. Any payment towards purchase subsequent to the furnishing of return of income (25/08/2011 - in the instant case) but before the last date available to file the return of income under s. 139(4) of the Act is irrelevant. Such subsequent payments after filing of return are required to be routed out of deposits made in capital gain account scheme. Thus, the plea of the assessee that utilization of capital ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vision of s.54(2) of the Act. The suggestion on behalf of the assessee on eligibility of payments subsequent to furnishing of return of income is not aligned with and militates against the plain provision of law certified in s.54(2) of the Act. 9.4 In the light of the mandate of section 54(2) as noted above, we shall now turn to the facts of the case. It is the case of the assessee that ₹ 40 lakhs in aggregate has been utilized towards purchase of new asset before furnishing the return of income under s.139(4) of the Act. The assessee claims to have invested ₹ 20 lakhs (being 1A of her share) for purchase of new asset. However, we notice that assessee appears to have shown a total investment ₹ 50 lakhs in aggregate i.e. 30 lakhs from personal account and ₹ 20 lakhs (A share) from joint account as against her obligation to the extent of ₹ 35 lakhs only. Also ambiguity exists on record as to whether the other joint owner (husband of the assessee) has availed claim of exemption, if any, upto ₹ 20 lakhs (being 1/2 of his share only) or entire ₹ 40 lakhs made through joint account towards purchase in his own right. In such circumstances, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Lai Puri Vs ITO [2013] 38 taxmann.com 7 (Chandigarh), which has been discussed by the Ld. CIT(A) on page 12 of her appellate order. 20. It was further contended by the ld CIT-DR that the Ld. AR has relied upon a number of judicial pronouncements, which are related to exemption u/s 54E/54EC, whereas in the instant case, exemption is claimed u/s 54B. It is to be noted that sections 54E/54EC and 54B operate in altogether different spheres. In section 54E/54EC, the investment in the bonds are to be made within 6 months from the date of transfer of capital asset, whereas u/s 54B, the agriculture land is to be purchased before filing of ROI. Further, there is no concept of deposit in capital gains deposit account scheme u/s 54E/54EC, whereas, u/s 54, 54B, 54F,if the amount of capital gains is not invested in the purchase of land before filing of ROI, then the same has to be deposited in capital gains deposit account scheme. 21. The ld. CIT-DR has further argued that as per 2nd proviso to section 54E, in the case of compulsory acquisition of capital asset under any law wherein the full amount of compensation awarded for such acquisition is not received by the assessee on the date of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AM Dhala and ACIT Vs. Kamlakar Mogha, the issues were relating to sec. 54EC and the investment in the bonds was allowed beyond the period of 6 months as the relevant bonds were not available in part of relevant period. 23. As per the ld CIT-DR, the issue is also covered by the decision of ITAT, Special Bench in the case of Jyotindra H Shodhan Vs ITO (2003) 87 ITD 312 (Ahd) wherein, it has been held by the Special Bench that: "The question to be decided is whether for the purpose of allowing deduction under section 54E, the period of six months is to be reckoned from the date of transfer or from the date of final receipt of sale consideration. Separate provisions have been made in the Act for both the situations. Where reckoning date is specifically provided as the date of receipt of the consideration, the period of six months is to be counted from the date of receipt. Conversingly, wherever it is not so specifically provided to be reckoned from the date of receipt it cannot be imported into the provision of section 54E(1), particularly when a contrary intention is expressed, namely, the period of six months is to be reckoned from the date of transfer in contrast to the dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of learned advocate for the appellant-assessee is misconceived inasmuch as the six months' period will have to be counted when sale-deed was executed i.e. from 07.08.1982. Therefore, we are of the opinion that the contention of learned advocate for the appellant-assessee is not acceptable. 7. Further, the Tribunal in paragraph No.17 of its order has observed as under:- "17. From the aforesaid discussion, it is very clear that an assessee who desired to avail benefit of section 54E must strictly satisfy all those conditions which are provided therein. One of the conditions of the section is that assessee is to deposit whole or any part of the net consideration in any specified assets within a period of six months after the date of transfer. There is no dispute about the facts that the transfer in the present case took place when sale deed was executed and registered on 07.08.1982 and the investment of ₹ 1,89,904/- is made by the assessee in National Rural Development Bonds on 20.02.1987 i.e. after the stipulated period of 6 months from the date of transfer. Further, this case does not falls under the provisions to Sec. 54E(1) whereof the period of six months is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . We have considered the rival contentions and carefully gone through the orders of the authorities below. We had also deliberated on the judicial pronouncements referred by the lower authorities in their respective orders as well as cited by the ld. AR and ld. DR during the course of hearing before us in the context of factual matrix of the case. From the record we found that during the year under consideration the assessee had sold agricultural land as under: - Particulars of lands Date of sale Value Details of consideration received Agricultural land at Munaha, Sanganer Khasra No. 1168 06.02.2013 20813808 1) ₹ 700000/- by cash on 09.02.2013. 2) ₹ 2,01,13,808/- by cheques in August-2014 Total ₹ 20813808/- Agricultural land at Munaha, Sanganer Khasra No. 1179 06.02.2013 16656282 1) ₹ 700000/- by cash on 11.02.2013. 2) ₹ 1,59,56,282/- by cheques in August-2014 Total ₹ 16656282/- Agricultural land at Munaha, Sanganer Khasra No. 1175 06.02.2013 19411456 1) ₹ 700000/- by cash on 12.02.2013. 2) ₹ 1,87,11,456/- by cheques in August-2014 Total ₹ 19411456/- Total 56881546 It is clear from the above table tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the purchase of new asset even in the extended date available u/s 139(4). The provisions of section 139(4) as these stood for the relevant period are quoted below: - "Section 139(4) - Any person who has not furnished a return within the time allowed61 to him under sub-section (1), or within the time allowed under a notice issued 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, whichever is earlier" The aforesaid provisions lay down that return can be filed at any time before the expiry of one year from the end of the relevant assessment year or before the completion of the assessment, whichever is earlier. In this case the Assessment Year involved is Assessment Year 2013-14, therefore time available for investing in the purchase of new asset was up to 31.03.2015. The assessee invested the funds in August 2014 well within the time available u/s 139(4). The Hon'ble Punjab & Haryana High Court in the case of CIT Vs. Ms. Jagriti Aggarwal 339 ITR 610 has held as under:- Capital gains-Exemption under s. 54-Time-li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urnished a return within the time allowed to him under sub-s. (1) of s. 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 whichever is earlier. Such being the situation, it is the case of the assessee that the assessee could fulfil the requirement under s. 54 for exemption of the capital gain from being charged to income-tax on the sale of property used for residence upto 30th March, 1998, inasmuch as the return of income-tax for the asst. yr. 1996-97 could be furnished before the expiry of one year from the end of the relevant assessment year or before the completion of the assessment whichever is earlier under sub-s. (4) of s. 139. In the facts and circumstances of the case, the assessee was entitled to claim benefit under s. 54 on the entire amount received by him on account of sale of his house property. (iii) Nipun Mehtotra vs. Assistant Commissioner of Income Tax (Banglore Tribunal) 113 TTJ 0223 Perusal of sub-s. (4) of s. 54 shows that the assessee has to utilize the amount for the purchase or construction of the new asset before the date of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n for the sale was made in installments-Consideration received by assessee on account of the sale was invested in NABARD Bonds which were beyond six months from the date of the transfer, though within six months from the date of receipt of the consideration- Assessee claimed an exemption under s. 54EC on Capital Gains-AO and CIT(A) held that for purpose of the exemption under s. 54EC, the period to be reckoned was from the date of the agreement and receipt of part payment at the first instance-Held, period of six months for making a deposit under s. 54EC should be reckoned from the date of actual receipt of the consideration-If period is reckoned from date of agreement and receipt of part payment at the first instance, then it would lead to an impossible situation by asking assessee to invest money in specified asset before actual receipt of the same-Assessee is eligible for an exemption under s 54EC of the Act on the part payment received after the completion of the transaction. (ii) S. GOPAL REDDY vs. COMMISSIONER OF INCOME TAX (HIGH COURT OF ANDHRA PRADESH) (1990) 181 ITR 0378 Capital gains-Exemption under s. 54E-Second proviso to s. 54E(1) inserted w.e.f. 1st April, 1984 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sept., 1995, was not made within the prescribed time i.e., by 31st Aug., 1995-Not justified-Merely on account of the fact that this was the first year in which the assessee earned commission would not alter the character of receipt from 'business' to 'other source'-Commission received by the assessee for arranging sale of goods for another party fell under the head 'business income'-Deposit could not be made on 31st Aug., 1995, due to a reason which was beyond the control of the assessee viz. strike in bank-Thus the assessee was not at fault in not depositing the amount before 31st Aug., 1995, and the deposit made on 1st Sept., 1995, satisfied the condition laid down in s. 54F-Therefore, assessee was entitled to exemption under s. 54F. (v) COMMISSIONER OF INCOME TAX vs. AKBAR ALI DHALA (HIGH COURT OF MADRAS) (2014) 89 CCH 0209 ChenHC/ 226 Taxman 254 Capital gains-Exemption to capital gains investment in certain bonds- Time limit of investment, when funds not available-Assessee claimed exemption from capital gains u/s 54EC on sale of his property on 22.11.2006 and investment was made in REC Bonds on 2.7.2007, which was well beyond period of six months stipulated in Section 54E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deduction of ₹ 22 lacs claimed u/s 54EC for investment in purchase of REC Bonds-Held substantive provision u/s 54EC(1) mandates investment within period of six months after date of transfer-National Highway Authority Bonds and bonds issued by Rural Electrification Corporation Limited were specified to be long term specified assets-Assessee transferred premises on 07.07.2006 and, therefore, was duty bound to invest within six months i.e. by 06.01.2007-Statutorily, Assessee had time of six months to make investment and the fact that he did not make this investment at any time during that period when bonds were available was, therefore, not relevant-Show cause notice dated 03.12.2009 was issued to Assessee in connection with investment in question and to it Assessee replied satisfactorily-Division Bench of Court at Bombay in Income tax Appeal No. 3731 of 2010 held that availability of bonds only for limited period during statutory period could not prejudice Assessee's right to exercise same up to last date-Option or discretion given by Parliament to Assessee needs to be honored-REC Bonds became available in VIA issue on 22.01.2007 and, therefore, investment made therein coul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sub-s. (4) of s. 139. 31. It was also the contention of the ld CIT-DR that the second proviso to section 54E is also relevant, But this is not a case of compulsory acquisition where second proviso to section 54E is applicable similarly the provisions of section 54 and 54B are pari materia, but the provision of section 54E / 54EC are not pari materia with 54B / 54F. We found that the case law cited by the learned AR in the case of Chanchal Kumar Sircar Vs ITO is applicable because of the circumstances in that case it was held that the period of limitation for making deposit or investment in new assets should be reckoned from the date of actual receipt of the consideration- If period is reckoned from date of agreement and receipt of part payment at the first instance, then it would lead to an impossible situation by asking assessee to invest money in specified asset before actual receipt of the same. Likewise in other cases it was held by the various authorities that the liberal interpretation should be considered in case of exemption. The case of Jyotindra H Shodhan Vs ITO (2003) 87 ITD 312 (AHD.) (SB), is also not applicable because the case is related to the provision of section ..... X X X X Extracts X X X X X X X X Extracts X X X X
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